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CRIME: INDIAN BANK SCAM
Unsafe Account
The Central Bureau of Investigation is preparing to seek
the extradition of M.V. Raja, an NRI businessman who cheated Indian Bank
of Rs 468 crore
By Sayantan Chakravarty
At 61, Louis Jalu, exporter at large, was looking
forward to retiring with his riches in the Parisian suburbs. His 40-year-old
cashew business, spanning almost every continent, had been worth the while;
Jalu had been able to stash away millions in banks across the world. But
they hadn't just come from the cashews; through the late 1980s and 1990s
the "Frenchman" had funnelled away Rs 468 crore from the Indian
Bank at Chennai that had extended huge bogus loans to his sundry firms
in India and Singapore.
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SCAMSTER DUO: Gopalakrishnan
(right) circumvented all RBI guidelines to sanction loans to Raja
(left) |
On the morning of July 5, Jalu's retirement plans
received a jolt. There was a gentle knock on the door of his Nanterre
residence. A stiff French policeman in plainclothes asked Jalu to accompany
him to the police station. As the police, acting on a Red Corner Notice
from Interpol (headquartered at Lyons, France), produced him before a
local magistrate at Nanterre, the mask was ripped from Jalu's face. And
M.V. Raja, fugitive on the run who had been outsmarting law enforcers
in several countries for the last four years, stood exposed. Says CBI
Director P.C. Sharma who has supervised the case over the past two years:
"The arrest of Raja is a significant development in the bank scam
cases. It is also a remarkable example of international cooperation in
policing matters."
Raja's is the story of a man who left no stone
unturned to evade the law since fleeing Singapore in 1997, shortly after
authorities in that country struck down an Indian request to examine his
bank documents. The evader kept assuming several fake identities but in
the end they weren't good enough. While on the run, he flitted in and
out of destinations like Singapore-where he is a permanent resident-Indonesia,
Vietnam, Thailand, Malaysia, Nigeria, Holland, USA, UK, Costa Rica, Hong
Kong, Japan, Sweden and Switzerland. He carried several passports, including
those of Ivory Coast and Holland. That the French police caught up with
him is quite admirable considering that neither Raja's fingerprints nor
any of his recent photographs were available anywhere.
Last week, armed with papers documenting Raja's
alleged felony, a CBI team left for Paris to negotiate his return to India
and put him on trial in the 13 cases that his 16 firms are involved in.
Even though there is no extradition treaty between France and India, CBI
investigators are hopeful that they have enough evidence to convince the
French to seek his deportation. The fact that Raja was staying under a
fake name in France and carrying a bogus passport should be crucial in
this regard.
Raja, born Muthukrishna Varatharajaloo in Thiruvarur,
Tamil Nadu, had chosen Paris as his final port of call because his wife
Chandralekha is a French national from Pondicherry. The charges against
him in the CBI's fir of November 19, 1995 are those of criminal conspiracy
(to defraud the Indian Bank), abetment of corruption and breach of trust.
Between them, his companies (see chart) in India siphoned off about Rs
333 crore, and the balance through its front companies in Singapore-Mountamount,
Nagova Exim Pvt Ltd and Sadeco Sarl Pvt Ltd.
Mountamount was the Singapore front company
that MVR Exports-and Raja-used to purchase raw cashewnuts, primarily from
Nigeria, for "export" to India. To do so, however, they needed
to be financed against invoices by the bank. The CBI has repeatedly pointed
out in its chargesheets that there was large-scale overinvoicing by the
banks. Besides, the financing came only too easy: the Mountamount loan
requests were processed rapidly and recommended by M.B.N. Rao, the bank's
then deputy general manager at its Singapore branch, and sanctioned by
its then chairman M. Gopalakrishnan, who was later arrested in the Rs
1,336-crore bank scam. The loans never met the RBI's strict guidelines.
Often, loan limits were raised with impunity. As it turns out, almost
30 per cent of the money sanctioned to MVR has now been written off as
non-performing asset.
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