Vijay Joshi, owner of Vini Iron and Steel Udyog Ltd and now one of the prime accused in coal blocks allocation (Coalgate) scam, is none other than the shadow of former Jharkhand Chief Minister Madhu Koda, now in jail.
Vijay Joshi is the ‘paper’ or dummy owner of the company. Madhu Koda had actually acquired Vini and had later recommended the allocation of coal blocks to his own company and had managed to get the centre’s nod for it.
Firstpost has several `key’ statements, including Koda’s, made before the Central Bureau of Investigation (CBI), the Enforcement Directorate (ED) and the tax authorities in the Koda case. These statements show that Koda’s close aide Binod Sinha had introduced Vijay Joshi to the former CM and since then he has been part of the core `Madhu Koda’ team which plundered the state’s wealth.
The CBI’s case is that Koda had acquired or floated 18 companies, including Vini Iron and Steel Udyog. The `tainted’ money involved is Rs 1,347.07 crore and US $ 1.21 million invested in India, Dubai, Sweden, Indonesia, Thailand and Liberia.
“Vijay Joshi is the key person in the circulation of suspected funds collected by Madhu Koda, Binod Sinha and others,’’ the CBI writes in its Madhu Koda chargesheet. Koda has been in jail for over two years now.
The only new thing in Vini’s case is that the CBI has now discovered that Koda helped allot captive coal blocks in North Rajhara in Jharkhand on 20 November 2008 to his own company by making false claims that Vini was part of a consortium, etc.
Not only this. Madhu Koda is set to steal more limelight in Coalgate, as he had also favoured Rungta Mines, Sunflag Iron and Steel Ltd and Electrosteel Castings. Madhu Koda’s personal secretary Arun Kumar Srivastava, in his statement before the income-tax authorities on 5 November 2009, said that his boss had allotted lease agreements to these companies, and “Binod Sinha had played a major role of a mediator between Shri Koda and the above companies.”
Srivastava is understood to have stated: “Madhu Koda as CM of Jharkhand state was also holding the charge of mining ministry since March 2005 till August 2008, that Shri Binod Sinha was very close to Shri Madhu Koda and used to talk to the concerned leasing companies at his residence Panchwati, Ranchi, for negotiation for illegal money/bribe/gratification for giving mines on lease to the concerned companies on behalf of Shri Madhu Koda, that he knew the name of some person/companies and they were Rungta Mines, Sunflag and Electrosteel, that all these companies had been allotted lease agreement…”.
Interestingly, the Comptroller and Auditor General (CAG), in its report on the coal blocks issue, has prominently flagged all three companies – Rungta Mines, Electrosteel Castings and Sunflag Iron and Steel Ltd – in the list of 57 private companies benefited by the allocation of captive mines.
Rungta Mines’ proprietor RS Rungta has also corroborated Srivastava’s statement by stating that he had “met Madhu Koda thrice; that purpose of meeting was to request him (to) expedite allotment of Param Baljori iron ore mine through cabinet as it was pending before the Jharkhand government since long, that after his meeting with Madhu Koda, it was cleared by the cabinet.’’ Subsequently, he was also allotted the captive coal mines.
Rungta also acknowledges the presence of Vijay Joshi in Madhu Koda’s group. “In 1997, he (RS Rungta) had purchased a cement plant from HMP group of Kolkata by transfer of shares; that the cement plant M/s Lemos Cement Limited was closed in 2001 and was under lockout up to 2006; that some time in July 2006 one Vijay Joshi approached him and wanted to become partner in Lemos Cement Ltd,’’ the Rungta statement read.
And Vijay Joshi was also one of the directors of Lemos Cement. In fact, the tax authorities had raided his premises at Ranchi and Kolkata on 31 October 2009. And Vijay Joshi, in his statement dated 1 November 2009, had admitted that he met Binod Sinha in January 2007 with RS Rungta for the rehabilitation of Lemos Cement plant. He was allegedly the conduit for the investment of “tainted” money that Binod Sinha, with the help of Madhu Koda, collected through bribes.
“Shri Vijay Joshi, a close associate of Binod Sinha, had admitted in his statement that, inter-alia, under the Income-Tax Act that Shri Binod Sinha had invested Rs 10,57,78,350 in M/s Smridhi Sponge (P) Ltd. as 50 percent share. Shri Joshi had also confirmed the accommodation entries provided through M/s Lackyprject Pvt Ltd.”
Thus Vijay Joshi never invested any money, but accommodation entries were arranged for share allotment to him in several companies, including Vini Iron and Steel Udyog.
Dwelling on the modus operandi, Binod Sinha’s brother Vikas Sinha, in his statement to the Enforcement Directorate (ED), said that his brother Binod Sinha used to handle Madhu Koda’s money by floating several companies and by giving cash through a chartered accountant for the accommodation entries and arrangement through cheques.
According to the ED, Koda opened two companies in Dubai – Camtech Manufacturing LLC and Blue Techno – in the name of Vijay Joshi and another associate Sanjay Choudhary in 2007. Vijay too corroborated this by giving a statement to ED that with the help of local persons in Dubai he had opened Camtech and invested huge amounts in it.
The ED, in its investigation report, says: “These companies exist only on paper and no business activity is carried on by them. Whenever a business concern wants accommodation entries arranged in their books of accounts in the form of share capital/unsecured loan, these chartered accountants/entry operators are approached. Cash is given by the business concern/beneficiary to these CA/entry operators and in return they issue cheques/DDs in the name of the beneficiary from one such paper/investment companies. The cash received by these chartered accountants/entry operators are generally routed in their paper/investment companies through banking channels. They used to charge two to four percent per entry.”
Koda, through Vijay Joshi and Binod Sinha, the ED alleged, had spent Rs 40 crore on fees to these chartered accountants and entry operators for `accommodation’ entries.
Koda and Sinha’s chartered accountant SK Naredi deposed before the ED that he had provided accommodation entries in lieu of cash by issuing cheques, exhibiting the purpose as share application money, unsecured loan or trading transactions. This had been done in the case of Vini Iron.
Is the CBI then flogging a dead horse, that is, Madhu Koda?