ED's evidence mounts against DK Shivakumar in money-laundering case, even as Congress leader cries 'political vendetta'

  • Shivakumar, who belongs to the higher political echelons of the Karnataka Congress, first came under the scanner of Income Tax Department in August 2017

  • It was then that his residence and offices in Delhi and Bengaluru had been raided, with over Rs eight crore in unaccounted cash recovered

  • The Income Tax investigation wing had alleged that Shivakumar not only evaded taxes but also filed a false statement with the authorities

New Delhi: The arrest of the Congress' troubleshooter in Karnataka DK Shivakumar was in the offing for some time. During the past four days of grilling, Enforcement Directorate (ED) officials had complaint that the senior Congress leader was not cooperating with the investigation in the alleged money-laundering case and his custodial interrogation was the only option available in order to unearth the entire conspiracy of alleged money-laundering.

This, the second high-profile arrest by Central probe agencies after former finance minister P Chidambaram, has rattled the Grand Old Party that called the arrest of Shivakumar 'vendetta politics'. It is pertinent to mention that Shivakumar did not walk into the ED office willingly. He tried to spike the summons issued against him by the ED last month by moving a plea in the Karnataka High Court. He joined the probe only after the petition was dismissed by the high court that refused to quash the summons that issued under the Prevention of Money Laundering Act.

 EDs evidence mounts against DK Shivakumar in money-laundering case, even as Congress leader cries political vendetta

File image of DK Shivakumar. Twitter @withDKS

Shivakumar, who belongs to the higher political echelons of the Karnataka Congress, first came under the scanner of Income Tax Department in August 2017. It was then that his residence and offices in Delhi and Bengaluru had been raided, with over Rs eight crore in unaccounted cash recovered. The Income Tax investigation wing had alleged that Shivakumar not only evaded taxes but also filed a false statement with the authorities. His four flats in Safdarjung Enclave, New Delhi and four close aides — SK Sharma, Sachin Narayan, A Hanumanthaiah and Rajendra — were at the centre of the entire case probed by the department. A diary was found at Rajendra's residence with transaction details in code.

The ED case was filed on the basis of reports from Income Tax authorities who have alleged that Shivakumar and his four associates were involved in the alleged laundering of money and the four flats (from which cash was recovered) were used as hideouts to stash black money. The Income Tax Department had recorded the statements of some of the persons and Shivakumar had allegedly claimed that only around Rs 40 lakh of the total recovered belonged to him and that the sum was basically proceeds from his agriculture income. Although Shivakumar had no evidence to back his claims, Income Tax authorities had suspected that illegal cash was used for investment in the real estate business in the state.

It was alleged by the Income Tax Department that a well-oiled 'hawala network' was being operated with the help of his close aides including SK Sharma, owner of Sharma Transport. In his statement before the Income Tax authorities, Hanumanthaiah had admitted that one of the four flats in the National Capital purchased by Sharma's brother was frequently used to stash cash belonging to Shivakumar. Sharma's transport business facilitated the movement of cash from Bengaluru and other places in the country to the Safdarjung flat and subsequent distribution to individuals on the directions of Shivakumar.

There was also an allegation that money was laundered abroad and invested in businesses in Singapore and Dubai. The Income Tax Department also suspected Shivakumar had links with top Congress leaders who might have received cash amounts through his close aides and that some cash was also allegedly sent to Congress headquarters through a cash mule. The code words used by Shivakumar and associates, the I-T Department has indicated, clearly establishes the fact that hawala operations had been underway for years and Shivakumar's assertions — that documents unearthed during the raids were not in his handwriting and places from where the money was seized don't belong to him — were not a tenable defence in the case.

The allegations by the tax authorities that prompted the ED to start further investigation under the PMLA also include the operation of certain benami bank accounts that were opened for a brief period to launder the money. Another diary that was recovered by I-T officials from Shivakumar during the search of a resort in the outskirts of Bengaluru had a list of payoffs to certain individuals although it only used code words. The diary had listed that Rs 35 crore in cash was delivered to a person in Bengaluru and another page had details of Rs five crore being sent to some high-profile person in Delhi. Despite the scathing admission by his associates, Shivakumar has been adamant in his claims that the Central agencies' probe is nothing but a political witch hunt.

The Great Diwali Discount!
Unlock 75% more savings this festive season. Get Moneycontrol Pro for a year for Rs 289 only.
Coupon code: DIWALI. Offer valid till 10th November, 2019 .

Updated Date: Sep 04, 2019 07:36:11 IST