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Is India serious about investigating Tatragate?

By T V R Shenoy
May 10, 2012 19:15 IST
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Did an Indian agency place a 'mole' within the Tatra subsidiary in Britain? Did powerful forces in India snuff out a life before anything emerged?

T V R Shenoy asks some uncomfortable questions about the Tatra case.

Are India's sleuths serious about investigating the purchase of Tatra Trucks? "No!" say the British.

I cannot offer names and places in what follows, but I learned the above fact from a very senior person in the British security establishment. One of the benefits of being in journalism for decades is that the friends on the other side of the fence, government or non-government, rise in rank. And it was from one such person that I heard that the British -- a section of them anyhow -- had known about the Tatra mess for quite some time.

The British started routinely monitoring large, unexplained transfers of money once terrorism became a fact of life. (This is a highly sensible precaution, one that I devoutly hope our own agencies are taking.) At some point they found that precisely such transfers were taking place, from a branch of the Canara Bank of India to more than one bank in Switzerland and in Liechtenstein.

It was the latter country that raised red flags. Switzerland regularly makes the headlines all over the world for its famously secretive banks, but it is Liechtenstein which draws attention from actual investigators worldwide.

In 1989, the G-7 Group -- the leading economies in the world -- established a Financial Action Task Force on Money Laundering; Liechtenstein was one of the fifteen countries classified as 'Uncooperative' when this task force drew up its first such list.

As late as 2008, when it launched its largest investigation against tax evaders, Germany's primary target was banks in Liechtenstein, particularly one owned by the royal family of Liechtenstein.

In a recent interview, Ravi Rishi, one of the key players being interrogated in the Tatra case, reportedly said, 'The Vectra group is owned by trusts in Liechtenstein which is in the public domain and is permissible by law as per British rules, unlike in India where it is seen to be suspicious. This is a perfectly legal structure of tax and succession planning in the developed financial world, and is not seen as suspicious or secretive.'

Actually, it was precisely the suspicion that Liechtenstein-based trusts were being used to launder money that provoked Germany's anger in 2008. Or isn't Germany, Europe's largest economy, part of the 'developed financial world'? How about the G-7 Group?

Be that as it may, the British were moved to wonder why money was moving from the Canara Bank branch to Liechtenstein. They were relieved to find that there was no terrorist group behind the money flow, and that it was 'only' a case of 'personal gratification'. (There is nobody like the British when it comes to coining polite euphemisms!)

Transparency International lists 178 countries on a scale of zero to ten, with 10 being 'very clean' and zero being 'highly corrupt'. India's score was just 3.1 in 2011. (Pakistan is worse off, with a score of 2.5, and China is marginally better off with 3.6.)

The long and short of it is that nobody in Britain bothered to inform anyone in India, probably because, let us face it, what was the point anyhow?

The parting kick from my friend came as he was leaving. Almost as an afterthought, he informed me that nobody in India -- despite the investigation ordered by the defence minister -- had as yet bothered to ask the Canara Bank branch for details of the money transfers!

Why are these bank archives important?

First, they record both the price at which equipment was brought from the Slovak manufacturer and also the price at which this equipment was sold to the Indian Army. That difference is the profit, and it would be the prime cause for the alleged scam.

Second, the records would show beyond doubt that the Indian Army was buying equipment from a middleman, which is a clear violation of the rules governing such purchases.

There are laws in Britain itself that prevent any bank -- even if it is a branch of an Indian bank -- from volunteering information about customers. But the British would be, generally speaking, happy to cooperate with waivers if they are approached through the right channels.

Come to that, if my friend's information is correct, even the Swiss authorities are no longer as hidebound as they used to be about maintaining customer secrecy. Even they, so I was told, would reveal details, as long as there is a certain attempt to be discreet about it.

The point is that the first move must be from the Indian side. And yet my friend insisted that nobody from India had taken even the preliminary step of speaking to the British about looking into the money transfers from London, which would be the key fact in talking to Liechtenstein and to Switzerland.

Does this not raise a familiar stink?

Just weeks ago Sven Lindstrom, the former head of Sweden's National Bureau of Investigation, said that Indian investigators did not seem interested in pursuing the Bofors case. Twenty-five years later, almost to the day, it does not seem as if Indian investigators are all that interested into pursuing the Tatra Trucks case either.

Or is that there are forces in India which are deliberately reining in the investigation, forces powerful enough perhaps to ignore a probe ordered by the defence minister himself into a case of alleged wrongdoings where at least one of the whistleblowers is no less than the chief of the army staff?

One month ago I had written that A K Antony gave the green signal to prosecute in the Tatra case as far back as February 2012, five weeks before General V K Singh's famous interview to The Hindu. The second probe was ordered by the defence minister after the chief of the army staff went public with his accusations, in March.

But there were also two more such investigations that received the defence minister's approval. One of these was approved on April 4, and the other on April 9. Neither of these last two had anything to do with the allegations made by General V K Singh.

But just how far back were some Indian agencies looking into the Tatragate mess?

I ask because of a peculiar story related by my friend. A former employee of an Indian bank, who was later working with the Tatra subsidiary in London. This person died while undergoing plastic surgery in India.

Working in an intelligence agency can make a person ever so slightly paranoid. My British interlocutor was moved to wonder whether the death was accidental. He raised the question of some Indian agency having placed this person as a 'mole' within the Tatra subsidiary in Britain, but with some powerful forces in India choosing to snuff out a life before anything emerged.

Personally, I would have thought it farfetched, something straight out of pulp fiction. On the other hand, there have been at least six mysterious deaths in the Uttar Pradesh National Rural Health Mission scam, so who knows?

I do not believe there is any point in investigating that death on the operating table. For one thing, who is or are the accused? 'Person or persons unknown' in India?

The money transfers from London to Switzerland and to Liechtenstein are another matter. The electronic trail exists, the records of the prices paid exist, and these can be obtained by applying to the relevant authorities. But it seems like this 'investigation' is an exercise in futility if the Indian side has not even applied to its British counterpart.

Twenty-five years from today will somebody in Britain be echoing Sven Lindstrom, saying that 'Indian investigators did not seem interested in pursuing the case'?

You can read more columns by Mr T V R Shenoy here.

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