Exclusive: Did Stalin know of the KTV money trail in 2G scam?

In what could be a new twist in the 2G spectrum scam, the needle of suspicion could point towards former deputy chief minister of Tamil Nadu, MK Stalin. The charge sheet filed by Enforcement Directorate has indicated that the DMK leader also knew of the inner workings of how the money trail was flowing.

Sanjeev Singh May 31, 2014 20:32:49 IST
Exclusive: Did Stalin know of the KTV money trail in 2G scam?

New Delhi: In what could be a new twist in the 2G spectrum scam, the needle of suspicion could point towards former deputy chief minister of Tamil Nadu, MK Stalin. The charge sheet filed by Enforcement Directorate has indicated that the DMK leader also knew of the inner workings of how the money trail was flowing into Kalaignar TV (KTV). DMK patriarch MK Karunanidhi’s daughter Kanimozhi and her step-mother Dayalu Ammal have 80 percent of the shares while family confidante Sharad Kumar has the remaining 20 percent stake in KTV.

The charge sheet was filed on 25 April, 2014 against 19 accused.  The list of accused also has names of Swan Telecom Pvt Ltd promoters Shahid Usman Balwa and Vinod Goenka along with the usual names of former Telecom Minister A Raja, Kanimozhi and Dayalu Ammal and Sharad Kumar, Managing Director of KTV.

On page 27 of the chargesheet, it talks about A Manohar Prasad, joint managing director of Gemini Group of companies, as saying that Sharad Kumar met him along with Raja Shankar, personal assistant of MK Stalin, and their auditor Siva Subramanian to express their desire to acquire SMIL (Sapphire Media & Infrastructure Limited). “It was agreed in principle to sell SMIL for a consideration of Rs 50 lakh but the payment was not made. They (Mr Prasad) insisted with Sharad Kumar to complete the formalities of takeover of the company at the earliest to enable their existing directors and shareholders to resign from the company. After having agreed to takeover the company, Shri Sharad Kumar arranged transfer of funds to SMIL which were further transferred to AFPL. The transfer of funds was made between 21 December, 2010, and 18 January, 2011,” it goes on to say.

Exclusive Did Stalin know of the KTV money trail in 2G scam

DMK's MK Stalin in this file photo. PTI

This is the first mention of Stalin in the chargesheet where a close associate of his has been identified as having a role in the takeover of companies used for transfer of funds. That Sharad Kumar was the main “go between” the companies and the funds flowing in is made clear by another statement. Number 3.14 in the charg sheet mentions of N Gopalakrishnan’s statement dated 03.01.2013 (authorised representative of SMIL), disclosing that the company (SMIL) had taken Inter Corporate Deposit (ICD) of Rs 83 crore which was passed to AFPL. “That in a discussion between Mr A Manohar Prasad, Director Gemini Group of Companies and Mr. Sharad Kumar, Managing Director of KTV, it was decided to take over the said SMIL for purpose best known to Mr. Sharad Kumar; That on having agreed to take over SMIL, Mr. Sharad Kumar arranged funds from various sources through ICD’s; that these funds were further transferred from SMIL to AFPL [Anjugam Films Private Limited].”

“The investigation revealed that an amount of Rs 200 crore was paid by promoters of STPL, using their group entity, Dynamix Realty, to KTV, through KFVPL and CFPL (Cineyug Films) in the garb of legitimate financial transaction that is as loan/share application money,” the ED has said in its chargesheet. The agency has also claimed that this transaction of Rs 200 crore, was allegedly paid into the account of KTV as a bribe for grant of telecom licences to DB Group of companies.

The incriminating evidence against Stalin comes in the statement of the late Sadhik Batcha recorded by ED on 28 January 2011 and 21 February 2011. Point 3.15 of the chargesheet mentions how Batcha knew of A Raja as he had worked for him in the 1996 general election. He also talked about meeting RK Chandolia in Delhi for transfer of some BSNL officials. He further stated that when he came to meet A Raja in the Environment Ministry office, he met Vinod Goenka and Shahid Usman Balwa of STPL. Batcha states “That around one year back (2010), Mr. Shahid Balwa came to Chennai and had a meeting with Mr. Stalin, Deputy CM at his residence and at that time, Mr. A Raja was present there.”

Even though the chargesheet may just mention Stalin's name in the passing, it's for the first time it has surfaced in the case. It also suggests that the top leadersip of the DMK was not unaware of what was going on. Unfortunately, Batcha "died" just a week after he allegedly confessed to this meeting. So far all the responsibility for this scam has been laid at the door of Raja and Kanimozhi possibly to keep the pressure off the top leadership. But these statements can give the investigating agencies a link between the 2G payoffs and DMK, as reflected in the CBI charge sheet.

The ED chargesheet is likely to set the cat amongst the pigeons as it draws a link beyond Raja to the top leadership of the DMK. As far as internal dynamics within the DMK is concerned, Stalin's rivals within the party and family like Azhagiri, Maran and Kanimozhi may not be unhappy about drawing these connections. It is believed that so far, Congress was not keen on bringing Stalin into the picture, but with both the Congress and DMK being wiped out in these elections, Stalin may now face the Heat both in Tamil Nadu politics and the 2G trail.

Tamil Nadu Chief Minister Jayalalithaa had made the 2G scam as one of her main issues during the 2014 general elections. Her party, the AIADMK went on to win 37 of the 39 seats in the state. Though names of Raja, Kanimozhi and Dayanidhi Maran have done the rounds in the past, but it’s perhaps the first time that DMK patriarch’s son Stalin has been mentioned in the statements recorded by ED.

Firstpost tried to contact Stalin, but no reaction was forthcoming. Though the Special Court on Friday, did fix 3 Junefor commencing arguments against the 17 accused of money laundering in a case linked to the 2G scam, the new links may widen the probe and focus on the final beneficiaries in the 2G scam.

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