New Delhi: M. Nageshwar Rao, additional director, Central Bureau of Investigation (CBI), who was shunted out of the premier probe agency Friday night and appointed as General (DG) Fire Services, Civil Defence & Home Guard, has had a controversial career path with several complaints of financial irregularities, influencing investigations and scuttling probes against him.
Rao, a 1986-batch IPS officer, was appointed as the interim CBI chief amid a spat between then Director General Alok Verma and Special Director Rakesh Asthana last year. Rao is said to be close to Central Vigilance Commissioner K.V. Chaudhary, who is the nodal authority for the induction and repatriation of officers in the CBI.
Rao has been accused of financial irregularities right from his time as the chief of fire service directorate in Bhubaneshwar, Odisha. Some of the complaints against him include scuttling and influencing investigations within the CBI, misappropriation of funds while in office and his wife’s involvement in a shell company.
While Rao was heading the CBI’s Chennai zone, he was transferred by director Alok Verma.
ThePrint has accessed two complaints that were written to then CBI Joint Director A.K. Singh in 2018, raising serious doubts about Rao’s integrity.
Rao had ‘closed inquiries against over 70 IRS officers’
According to a complaint to then Joint Director Singh on 20 February 2018, a copy of which has been accessed by ThePrint, Rao, in connivance with another senior official in Delhi, had closed inquiries against more than 70 Indian Revenue Services (IRS) officers, whose name figured in the Sanjay Bhandari diaries.
Bhandari, a chartered accountant, was arrested for alleged corruption along with the then Joint Commissioner of Income Tax Sallong Yaden in January 2015.
“The subsequent search and seizures from Sanjay Bhandari revealed details of several Income Tax officers in the pay roll of Bhandari. But, Rao, had chosen to close down the enquiries against these officers,” the complaint said.
According to the complaint, it was on 28 December 2016, the Chennai CBI had registered a case against VGN developers, but Rao failed to instruct the investigating officer to conduct any search operations in connection with the case.
“Due to this serious lapse, some serious evidence of bribery by the VGN Developers to various state and central government officials was lost,” the complaint stated.
The complaint also alleged that Rao was strongly connected with the Telugu government officers in Tamil Nadu and used to pass on several sensitive information to them.
“One such officer who is regularly in touch with Shri.Nageswara Rao, is former Chief Secretary of Tamil Nadu, Ram Mohana Rao,” the complaint said.
Rao’s wife is accused of running shell companies
Another complaint, also sent to A.K. Singh, a copy of which is with ThePrint, stated that when Rao was the Inspector General in CRPF, his wife, Sandhya, had purchased a land at Pedapalakaluru village in Guntur district, Andhra Pradesh, for Rs 20 lakh. The financial source of this purchase was shown as loan from a firm named Angela Mercantiles Private Limited, Kolkata, which is a shell company.
“There are several group of shell companies belonging to the same set of accused functioning out of two small rooms,” the complaint said.
It added: “It appears Sandhya has invested money to the extent of more than 60 lakhs in Angela Mercantiles and obtained Rs.25 lakhs as loan, which is a clear case of money laundering.”
“100 shares of the shell company M/s. Angela Mercantiles Pvt Ltd, held by Mannem Sandhya was used for the purpose of laundering and converting huge stash of tainted money and to make belief as if the holdings were legal earnings through a modus operandi well known as ‘penny stock scam’. The said shares were purchased for a meager Rs.1000/- and was sold to accused persons later for a huge amount without any basis,” the complaint read.
The complaint also stated Rao, in 2011, had purchased a government land from a woman using forged documents at Khurda, Odisha.
According to a source in the CBI, Rao’s transfer comes after the BJP government came to know that he had allegedly slowed down the investigation into the Saradha chit-fund scam just to save his wife’s properties that were under the scanner of West Bengal Police.
Rao had ‘misappropriated’ funds as fire chief
Rao, as the chief of fire service directorate in Bhubaneshwar, was accused of financial irregularities in 2016.
As the Director General of Fire services, Rao had ordered the purchase of uniforms and dungarees worth Rs 3 crore without following the tender procedures or the approval of Technical Committee, the complaint stated.
His successor, Binay Behara, had sent a report in this regard to the Odisha government over which an internal audit was also ordered.
Rao had even violated Supreme Court orders
As the interim CBI chief, Rao is accused of taking decisions related to registering of FIRs, ordering transfers of officials without following proper procedure and despite Supreme Court’s orders to not take any policy decision.
On January 18 this year, Rao had reshuffled and transferred over 20 CBI officers, including Joint Director Arun Kumar Sharma, who had been supervising the probe into a sexual abuse case at a shelter home in Bihar’s Muzaffarpur, an investigation that was being closely monitored by the Supreme Court.
Sharma was sent to the CRPF despite two earlier SC orders — one on October 31 last year and the other on November 28 last year — restraining the officer’s transfer without approval from the top court.
On February 7 this year, taking note of Sharma’s transfer without its approval, the Supreme Court started contempt proceedings against Rao.
He transferred officers from Alok Verma camp
Soon after taking over as the interim CBI chief on 23 October last year, Rao had ordered the transfer of 13 CBI officers, who were known to be from the Alok Verma camp.
While the CBI had called them “routine transfers”, these came despite the Supreme Court asking Rao to not take any policy decision until a new chief is appointed.
These transfers were, however, revoked just after two months by Alok Verma, on the day he was reinstated as CBI director on 8 January this year.
Verma was, however, removed again just after two days and his orders were then nullified by Rao on 11 January, who was again appointed as the CBI’s interim chief.
On 21 January, Rao had again transferred 20 officers, including superintendents of police (SPs)-rank officers and 7 additional SPs (ASPs) and called it a “cleaning drive” within the investigating agency.