Conspiracy cries fill air as CBI, I-T men fight over Moin Qureshi link

NEW DELHI: CBI director Ranjit Sinha calls it a witch hunt. Behind this unusual public statement by the head of a probe agency – Sinha was referring to an ongoing probe into the affairs of a hitherto obscure meat exporter called Moin Qureshi – is a tangled tale of two departments seemingly working at cross purposes, two unrelated investigations and a controversial phone tapping.
ET spoke to almost a dozen people in the government to piece together a strange story of how a seemingly anodyne probe into tax evasion is threatening to blow up into another, as one official put it, ‘Radia tapes’ case. Most officials declined to speak on record given the sensitivity of the issues involved.
But first the background. The Central Bureau of Investigation (CBI) has had to deal with a controversy of sorts over the past few weeks relating to the association of two of its chiefs, former head AP Singh and current boss Ranjit Sinha, with Qureshi - who is being investigated by the income tax department for alleged tax evasion.

Qureshi’s phones were placed under surveillance, likely late last year by the tax authorities and details of the investigation, as well as well as the content of some of intercepts have come into the public domain. Qureshi is a family friend of Singh and is also an acquaintance of Sinha. “Making the investigation into a high-profile matter instead of treating it like any other tax evasion case is being done deliberately to put pressure on the agency for its investigations into certain cases,” says a senior CBI official.

The CBI official alleged that the investigations into the StockGuru scam, where the role of several IT officers is being probed, and Aircel-Maxis deal has led to inter-departmental friction. The official also alleged the leaks on the Qureshi matter originated in the I-T department. “We had written to the IT department almost a month back seeking details of criminality by public servants but there has been no response. We sent them a reminder also,” Sinha told ET late last week. He declined to speak on allegations that the Qureshi matter was being used to settle political and other scores.

The income tax department strongly denies any leak by its officers. “Sorry, I cannot respond to any issues on matters under investigation. I can only deny the allegation of leak from the IT department,” says KV Chaudhery, member Investigation, Central Board of Direct Taxes. Other officials of the department probing the case claim that the case against Qureshi is a strong one involving tax evasion of over Rs200 cr.

The IT officials say that the details of the investigation have been made public by persons close to Qureshi to deflect attention from the alleged tax evasion, which the officials say, is one of the largest in recent times. These IT officials also strongly deny that their probe is motivated by any extraneous consideration.

A response to the CBI’s letters on the matter has been approved by Finance Minister Arun Jaitley, I-T officials said, and will be sent soon. IT officials also said that at this stage the agency is unlikely to share phone intercepts with other agencies. Jaitley declined to comment.



The AP Singh Files

Qureshi, prominent in Delhi’s social circles till recently, is familiar with several politicians from Uttar Pradesh including some in the BJP. “Last year, around the Muzzafarnagar riots, a leader of a secular party and a prominent BJP politician had met in Qureshi’s farm house in Delhi. Qureshi is on good terms with several politicians and the intercepts could embarrass many people like the Radia tapes,” says an official of an investigative agency, who was giving an example of the range of Qureshi’s contacts. He also predicted that as in the Radia affair, eventually, no act of criminality would be unearthed but reputations could be destroyed.

One of the IT officials cited earlier claimed that the intercepts “reveal some interest” of Singh in the Qureshi matter and the matter has been brought to the notice of the new government. The BJP’s unease with Singh was evident when the party had opposed a move to induct him in the National Human Rights Commission. Singh is now a member of the Union Public Service Commission.

“His is a constitutional post and the government has to decide which is the competent authority that can recommend action against him,” says the IT official. The alleged “interest” refers to some text messages exchanged between Singh and Qureshi “which have to be read in proper context,” says the official.

The IT official said notices had been issued to Singh, his mother and his wife. “This is enough to get Singh to resign if the new government so desires,” says the official. However, a person close to Singh pointed out that the notices are “general” in nature and don’t refer to any transaction. “This is nothing but pure harassment since the IT department has not raised any specific query related to the inquiry but has instead asked for income details since 2006.” CBI officials say that the investigation is nothing but hot air and is a case of “classic tit for tat”.

“Moin is a good friend of mine and there have been no financial dealings between us except for renting out my family basement to him after retiring from the CBI. There have been no conversations with him on any ongoing CBI case when I was the CBI director,” AP Singh told ET. People close to Singh also point out that Qureshi is not an accused in a criminal case.

“The Qureshi affair also suits the new government because the CBI under AP Singh was instrumental in filing cases against BJP general secretary Amit Shah in the Tusiram Prajapati fake encounter case,” says an official of another investigative agency who is also familiar with the intricacies of the case.

But the people close to Singh said charges had been filed against Amit Shah during Singh’s tenure, as the entire hierarchy of the CBI had recommended such a course of action. Qureshi could not be reached for this story.



Who Ordered Tapping?

Beyond the specifics of this case is the larger issue of telephone tapping and violation of privacy. Officials in several investigating agencies say it is not clear if the IT department has powers to intercept phones to detect tax evasion. They say it is not at all clear why Qureshi’s phones were put under surveillance.

“The Supreme Court has laid guidelines for tapping phones in limited circumstances for exceptional reasons. Our case was that even if govt agencies tapped phones, the transcript was to be kept secret and obliged to be used only for investigation. Any conversation between two individuals no matter how prominent and irrespective if whether they were speaking on public and private matters are deemed to be private,” says Raian Karanjwala, a prominent lawyer who has represented Ratan Tata, who has filed a case in the Supreme Court asking to lay down guidelines that the government should destroy intercepts or prevent them from leaking.

Shortly after conversations of corporate lobbyist Niira Radia were leaked out, a circular issued by the cabinet secretary in April 2011, clearly stated that the law “does not permit use of telephone tapping and monitoring of conversations to merely detect tax evasion. There are specific laws and rules that contain provisions for detection of unaccounted wealth and evasion of taxes, and interception of phones without public emergency or public safety being at stake is not in accordance with the law, as exhaustively interpreted by the Hon’ble Supreme Court.”

But IT officials say three months after the circular from the cabinet secretary, the department’s power to intercept phones on grounds of tax evasion were restored. “The only difference this time was that the Revenue secretary had to personally approve the request,” says the official.



Two Other Probes

Lurking somewhere in the background of this murky affair, say a number of officials at investigative agencies, are probes into two other cases by the CBI that seems to have upset the tax department. One of two probes in which the paths of the two agencies have crossed is the Stockguru scam. In 2012, one Ullas Prabhakar Khaire and his wife Raksha were arrested by the Delhi police for allegedly duping almost two lakh investors of Rs493 cr by promising them high returns on investments in the stock markets through their firm Stockguru. Before the arrests, Khaire’s premises were raided by the Income Tax officials in January 2011. It has been alleged by the Delhi police that certain IT officers investigating the case “misappropriated” Rs44 crores and demanded another Rs30 crore to weaken the case.

Last December, CBI arrested a 2006 batch IRS officer Yogender Mittal, an income tax deputy commissioner in the matter. Delhi Police’s correspondence with CBI also names other high profile IT officers. The CBI is also probing alleged involvement of other senior IT officers besides the ones named by the Delhi police, officials in the agency said.

The other investigation that CBI officials say led to unease between the agency and the finance ministry was the Aircel Maxis deal. The CBI has filed a FIR against several persons including former telecom minister Dayanidhi Maran, his brother Kalanithi, chairman of the Maxis group T Ananda Krishna among others. Maran has been accused of forcing Chennai based entrepreneur C Sivasankaran to sell his stake to the Malaysian Maxis group when he was the telecom minister.

BJP leader Subramanian Swamy has also alleged that firms controlled by former finance minister P Chidambaran’s son Karti had financial dealings with Sivasankaran’s firms. Karti Chidambaram has strongly denied all allegations of impropriety. Sinha confirmed the CBI is examining the allegation against Karti but declined to elucidate further.