$700m sent out of India through 'legal hawala'
MUMBAI: The Enforcement Directorate (ED) recently seized Rs 83 lakh from
a bank locker in south Mumbai. It is one of three cases the agency is
investigating for suspected hawala-type transactions using the country's
banking system. It believes that money running into thousands of crores
is illegally sent abroad either as advance remittance for import of
goods or by using forged import documents submitted to banks. As a
result, the country suffers substantial loss of foreign currency.
In the three cases under investigation, a total of $700 million (about Rs 4,400 crore) was sent out of the country, mainly to trading hubs like Dubai and Hong Kong, in the last six months. The ED suspects the actual amount could be three times that detected.
A source said the accused took advantage of lacuna in the banking system to commit the fraud and there is no strong law to deal with the matter. Calling it a sophisticated hawala-like operation, he said money, most often obtained illegally, is being sent abroad through normal banking channels.
READ ALSO:
Drug-hawala ring busted in 4-nation raid
Siliguri scam took hawala route
He said fake companies are registered and accounts opened in leading banks and co-operative banks. Cash is first deposited in the co-operative banks and transferred from account to account several times to obscure its source. After it reaches a big bank, of course, through an online transaction, payments are made towards advance remittances for imports. Also, fake import documents are produced. The source said it is obvious that the racket cannot be carried out without the connivance of some bank officials. "Without their involvement, such an elaborate fraud cannot be carried out."
READ ALSO: ED files second complaint in hawala scam against 10
He said the money is received abroad by the racketeers' foreign partners, who withdraw the sums in foreign currency. "Thus, without importing anything, we are making payments in dollars. This is a loss for the country, a loss for India's banks," said the source.
READ ALSO: CBI alleges suspended Syndicate Bank CMD got bribe through hawala
He said that the registered companies vanish after a certain number of transactions are made and the perpetrators establish new fake companies.
In the three cases under investigation, a total of $700 million (about Rs 4,400 crore) was sent out of the country, mainly to trading hubs like Dubai and Hong Kong, in the last six months. The ED suspects the actual amount could be three times that detected.
A source said the accused took advantage of lacuna in the banking system to commit the fraud and there is no strong law to deal with the matter. Calling it a sophisticated hawala-like operation, he said money, most often obtained illegally, is being sent abroad through normal banking channels.
READ ALSO:
Drug-hawala ring busted in 4-nation raid
Siliguri scam took hawala route
He said fake companies are registered and accounts opened in leading banks and co-operative banks. Cash is first deposited in the co-operative banks and transferred from account to account several times to obscure its source. After it reaches a big bank, of course, through an online transaction, payments are made towards advance remittances for imports. Also, fake import documents are produced. The source said it is obvious that the racket cannot be carried out without the connivance of some bank officials. "Without their involvement, such an elaborate fraud cannot be carried out."
READ ALSO: ED files second complaint in hawala scam against 10
He said the money is received abroad by the racketeers' foreign partners, who withdraw the sums in foreign currency. "Thus, without importing anything, we are making payments in dollars. This is a loss for the country, a loss for India's banks," said the source.
READ ALSO: CBI alleges suspended Syndicate Bank CMD got bribe through hawala
He said that the registered companies vanish after a certain number of transactions are made and the perpetrators establish new fake companies.
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Kejriwal tried to split Congress reveals 'sting'
12th Mar, 2015
NEW DELHI: AAP was stung on Wednesday when an audio tape surfaced in
which party chief Arvind Kejriwal is heard encouraging ex AAP MLA Rajesh
Garg to break six Congress MLAs away and get them to support an AAP
government for the second time in Delhi. The conversation, between
Kejriwal and Garg, allegedly took place before the assembly was
dissolved and at a time when AAP was publicly demanding fresh polls, but
privately the sting would suggest was seeking to make the government
by engineering defections from the Congress.READ MORE: AAP says nothing 'illegal in contacting Cong MLAs'
AAP leaders, Kumar Vishwas and Ashutosh, questioned the authenticity of the tape (TOI too can't vouch for its authenticity). However, another leader Ashis Khetan called the conversation "political realignment", while Kumar Vishwas admitted that the same tape was sent to him by Garg some months ago, allegedly as part of the latter's tactic to blackmail the party leadership for an election ticket in the last election which was denied to him.
The sting comes at a time when Kejriwal's leadership is under attack from party's senior members, Prashant Bhushan and Yogendra Yadav. Apart from showing up Kejriwal as a practitioner of realpolitik, like leaders of other parties, the sting also shows him implicating his deputy Manish Sisodia by saying that he and others were in touch with Congress but had been unsuccessful in striking a deal.
Even as the taped conversation had AAP rivals, BJP and Congress, at the party's throat, its Maharashtra functionary Anjali Damania, prone to frequent resignations, put in her papers on twitter. Damania's outburst that she had not joined the part for ''this nonsense'' appeared to have captured the sentiment among many party members and volunteers.
Coming back to the sting, Kejriwal is heard telling Garg on the phone: "We are ready to form the government, but Congress is not ready to support us. Manish (Sisodia) is in touch with the Congress. Do one thing, split the Congress and ask their six MLAs to float a new party and support us." For AAP, that went hammer and tongs after BJP last year, accusing it of trying to buy out its MLAs, the tape has created quite an embarrassment.
The conversation starts with Kejriwal telling Garg that while AAP is ready (to take support from Congress), Congress was not agreeing and that Manish (Sisodia) etc were in touch with them. Garg responds: "The eight MLAs are ready but Ajay Maken, one Surjewala and some others are creating hurdles saying that this will finish off Congress in Haryana." Kejriwal goes on to say that AAP shouldn't portray things like it is desperate for Congress' support but that Congress approached it and AAP has agreed.
After a short discussion, Kejriwal is heard saying, "Now you start the process of breaking away these six MLAs (excluding Lovely and Yusuf). They can form their party and give outside support to AAP. They were going to BJP but did not because three of them are Muslims. They might as well support us from outside."
After the controversy broke over the clip, Garg feigned ignorance on how the clip became public saying he had e-mailed it to party leader Kumar Vishwas. "I was hurt when these people said break the six (Congress) MLAs. Then I thought how will these people change politics," Garg claimed.
In response AAP's Ashish Khaitan questioned the authenticity of the recording, but also said that Congress lawmakers were in touch with his party then. "Even if we were to construe that the recording is genuine, horse-trading is a very strong term. We did not trade seats... political realignments are a reality and we need to accept that." He called Rajesh Garg a "disgruntled element" and a man with an axe to grind because the party did not give him a ticket for the Delhi elections.
Interestingly, AAP leader Prashant Bhushan had also talked about the desperation to form government in his note to the national executive on February 26. He said that when the NE had taken a decision not to seek Congress support, attempts were being made to seek their support as late as November. This was the same time when Kejriwal was facing pressure within the organisation and MLAs not to go for polls and form the government.
"Not only a letter was sent to the LG asking him to postpone the dissolution of assembly in June but as late as November, attempts were being surreptitiously made to seek Congress support to form the government again in Delhi without having to contest elections," Bhushan had said in the letter.
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