ED to recast itself, fast-track cases

ED to recast itself, fast-track cases

Mumbai: India’s Enforcement Directorate (ED), which probes foreign exchange violations and money laundering, plans an organizational recast to increase efficiency and speed up some of its high-profile investigations.

This was decided at the directorate’s annual meeting in Delhi last week, two ED officials said, without elaborating. They requested anonymity, given the sensitivity of the matter.

“ED has drafted a new strategy to clear many important cases on a priority basis," one of them said.

The agency is stuck with at least 1,200 cases, but has no time to clear the backlog as it has been busy with key cases—alleged wrongdoing in second-generation (2G) spectrum allocation and an $8 billion money laundering case against Pune realty consultant Hasan Ali Khan.

Apart from this, in the past two years, ED has been handling several important cases involving the Indian Premier League cricket tournament, the Delhi 2010 Commonwealth Games, a 400 crore fraud at Citibank and an alleged money laundering case against Madhu Koda, former chief minister of Jharkhand.

It has not been able to make much progress on these as the bulk of its time has been spent on the 2G and Khan cases, the second of which involves investigations in countries in different continents.

A sudden spurt in foreign exchange violation cases and a staff shortage have meant the agency has not been able to conclude investigations in most of its cases, accordingto one of the officials cited above.

In other cases, investigations have been completed but await government clearance to be taken to conclusion as certain sensitive policy matters are involved.

Hundreds of cases have been lying unattended both in Delhi as well as Mumbai, he said.

“Who has the time to look at other issues? Most of the officials in Delhi are travelling abroad in connection with the 2G scam, while all Mumbai officers are busy with the Hasan Ali case," the second ED official said.

Faced with a shortage in investigating staff, the agency early this year sent a proposal to the finance ministry to increase its workforce three to four times.

Headquartered in New Delhi, the directorate has some 3,000 people spread over 10 zones.

The government has cleared the proposal, but it will take at least a year to recruit new people.

“The recruitment process is complex and time consuming. Most of the investigating staff come to ED on deputation from other government departments such as customs and service tax because the department does not have direct recruitment," one of the officials said.

The directorate has faced severe criticism from the Supreme Court for failing to make a conclusive case against Khan even after four years of investigations.

Khan, a Pune-based stud farm owner and real estate consultant, is the main accused in a case involving alleged money laundering of $8.04 billion.

The apex court is hearing a petition filed by lawyer Ram Jethmalani and some former bureaucrats, seeking its direction to the government to bring back black money stashed by Indian nationals in foreign banks, said to be around $1 trillion.

Almost the entire Mumbai office of the directorate—four assistant directors, a special director and half a dozen officers—has been working on the Khan case, travelling across India to Delhi, Patna, Kolkata, Hyderabad and Puducherry to interrogate Khan’s associates and alleged accomplices.

The agency in May filed a 900-page chargesheet against Khan under the Prevention of Money Laundering Act (PMLA). The apex court reprimanded the agency for not informing the court about the filing of the chargesheet. Following the court’s directive, the government appointed a 10-member panel to oversee the case.

Khan was arrested in March under PMLA after prolonged searches at his premises in Pune and sustained interrogation. He is alleged to have stashed over $8 billion in Swiss banks, besides having links to international arms dealer Adnan Khashoggi.

Khan is also facing charges of tax evasion of over 40,000 crore. He has been under the scanner of ED and the income-tax department since 2007.

ED had issued a show-cause notice to Khan in 2008 for alleged foreign exchange violations and keeping $8.04 billion in a UBS AG account.

UBS has denied any business relationship with Khan.

Along with ED, the Central Bureau of Investigation (CBI), too, is probing the 2G scam. The investigating agency has charged a former minister,executives of Anil Ambani-controlled Reliance Group and the Indian joint venture partners of Telenor and Etisalat in a multibillion dollar telecom licensing corruption scandal that has rocked the government and business establishments.

CBI has filed an 80,000-page chargesheet before a special court set up exclusively for the 2G trial, which is presided over by judge O.P. Saini. ED is yet to file its chargesheet.