New Delhi: The Central Reserve Police Force has taken note of allegations against one of its top Indian Police Service (IPS) officers for funneling Rs 10 crore through hawala channels using a shell company. CRPF Director General G.P. Singh confirmed to ThePrint that the complaint is “being handled in accordance with established procedures under the CVC (Central Vigilance Commission) guidelines”.
The officer in question, a 1996 batch IPS officer of the Telangana cadre, is an Inspector General-rank officer. The officer has previously served in, from the force’s perspective, the ‘all-important region of Jammu and Kashmir’.
The complaint, a copy of which is with ThePrint, was filed by one chartered accountant, who claimed to have managed income tax returns of the officer in the past.
“A complaint has been received. It is being handled in accordance with established procedures esp. the CVC guidelines. Further information may be collected about progress in due course,” the CRPF Chief told ThePrint.
The Commission is empowered to launch an inquiry by itself or by the chief vigilance officer of the organisation concerned or CBI or any other anti-corruption investigating agency under the Government of India on complaint of allegations against a public servant. At the same time, the CVC guidelines state that anonymous/pseudonymous complaints are not entertained
In the complaint, the officer is accused of accepting commissions from the suppliers preferred through a centralised procurement process during the officer’s tenure in Jammu and Kashmir. The complainant has also alleged that the officer carried out a hawala transaction of Rs 10 crore through a Singapore-based firm that invested in a shell company indirectly controlled by the officer through relatives. The complainant has attached snapshots of the audited annual financial statements of the firm, Device Earth, to drive home the point that Rs 10 crore was invested disguised as institutional funding, a major portion of which was later used for personal purposes by the officer and relatives.
ThePrint reached the officer, who refused to answer questions and instead sought a copy of the complaint and order of inquiry.
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Funding shell companies through hawala, use of mutual funds
In the 14-page complaint reviewed by ThePrint, the officer is primarily accused of introducing a centralised ration procurement system for all units under the Srinagar sector headquarters, allegedly favouring select suppliers in exchange for commissions in cash.
Additionally, the complainant has alleged that the officer first granted an interest-free loan of Rs 9 lakh to Bengaluru-based company Device Earth, which is controlled by the officer’s sisters and brother-in-law.
“Apparently, a Private Limited company can take deposit or loan only from its Directors and their relatives and not from any other person,” the complainant argued, further alleging that the company was rather a shell company devoid of any business operations.
According to the company’s financial documents, it was incorporated on 9 March, 2018, with three directors—all of whom are related to the officer.
The complainant alleged that the officer in question “controls the said shell company through” blood relatives. It goes on to add that the officer “floated this shell company in December, 2018” and made three relatives its directors “and invested the whole paid up capital of Rs 99,96,300/- in it” through them.
Furthermore, the firm Device Earth received its first institutional funding from Singapore-based firm Blue Ashva Capital, which the complainant alleged to be another shell company providing opportunity for recouping these illegal money and routing their money back into Indian firms as investment.
The complainant alleged that the officer routed these funds to Blue Ashva Capital in December 2020 through hawala channels which was further routed through an affiliate firm named Blue Ashva Sampada Fund at an exorbitant price.
Meanwhile, the firm also appointed one Paresh Nanubhai Trivedi as nominee director of the firm after receiving funding from Blue Ashva Capital, and further alleged that Trivedi has been directors of several other shell companies.
Attaching snapshots of the company’s financial statements, the complainant alleged that the firm, which had a negative balance in surplus and reserves for two consecutive years before receiving the funds in January 2021, reported a positive surplus of around Rs 8 crore by March 2021.
The company sold 21,819 preferential shares at premium of Rs 4,462.30 and 100 equity shares at the same price to Blue Ashva in exchange for approximately Rs 10 crore funding.
Equity shares provide partial ownership in any firm in which investments are made, along with voting rights. However, owning preferential shares limits the power to only profits and claims on the company’s assets.
Of the nearly Rs 9.78 crore received from a Singapore firm, Device Earth immediately invested Rs 8.50 crore into a mutual fund instead of using it for expansion, growth, and product development—the stated purpose of the funding.
However, the firm offloaded a major portion of the mutual funds making a profit of nearly Rs 17.86 lakh, the complainant alleged, adding that the amount generated by selling mutual funds were not added to the audited financial statements of the company and were rather used by the officer and family members for personal purposes.
“Thus, as is evident from above, the entire stated investment of Rs 10 crore has been used by the directors and relatives of the directors of the said shell company Device Earth Pvt Ltd, which is a family company…,” the complaint further alleged.
“The said M/s Device Earth Private Limited has been shown as regularly incurring operational loss in every year. As the dummy director Paresh Nanubhai Trivedi has already taken his cut money/commission, he has been shown as a nominee director just to avoid regulatory scrutiny and he has never signed any paper of the company till date. More surprisingly, Paresh Nanubhai Trivedi has not been paid any remuneration or salary by M/s Device Earth Private Limited till date which is also evidenced from its audited financial statements,” the complainant further submitted.
(Edited by Zinnia Ray Chaudhuri)
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This is just TROLLING to defame an honest officer.