Over the past two months, the central as well as state investigating agencies have made major cash recoveries in West Bengal.
Picture this.
· On July 23, the Enforcement Directorate (ED) seized Rs 21.2 crore in cash from one of the apartments of Arpita Mukherjee, a close aide of discredited Trinamool Congress (TMC) leader Partha Chatterjee, from her upscale Diamond City apartment near Tollygunge in South Kolkata, while probing the School Service Commission (SSC) recruitment irregularities in Bengal.
· On July 29, the ED recovered Rs 27.9 crore in cash and 6 kg gold from another apartment owned by Arpita Mukherjee from the Club Town Heights condominium in Belgharia in the northern fringes of Kolkata, while probing the same case.
· On September 4, the Bengal Crime Investigation Department (CID) raided the residence of a fish vendor, Jayprakash Saha, in Gazole, Malda and recovered Rs 1.4 crore in cash.
· On September 10, the ED carried out search operations at the house of Amir Khan, son of businessman Nesar Ahmed Khan, in the Garden Reach area of south-west Kolkata, in connection with a case of online gaming fraud and recovered Rs 17.32 crore.
So the question is why the sudden cash hauls?
NOT SO SUDDEN
Historically speaking, Kolkata is no stranger to money laundering and shell company operations. In fact, Independent India’s first major financial scam took place in this very city back in 1957, when Haridas Mundhra, a city-based industrialist and stocks speculator, got the government-owned Life Insurance Corporation (LIC) to invest a sum of about Rs 1.27 crore in shares of six of his troubled companies.
Since then, the city has been home to a well-evolved eco-system to bring back black money into the company books by means of shell company conduits, dummy directors and their operators, spurious current accounts in banks and a maze of transaction layers which render tax sleuths an uphill task of following the money and identifying their ultimate beneficiaries.
CRACKDOWN ON THE ‘SHELL’ GAME
In the past few years, the Income Tax (IT) department has identified as many as 35,000 shell companies based out of Kolkata and launched prosecution against close to a hundred operators running illegal cash movement.
The well-established money laundering system in the city ensured that cash never had to be stocked. But fresh roadblocks and hindrances put up by government agencies over the past few years seem to have given a setback to laundering operations.
“Cash hoarding is a new phenomenon in Kolkata. Earlier, there was no need to hoard cash. Black money used to get pumped back into the system through the established system of shell company network. All these companies required was a trade licence from the Kolkata Municipal Corporation which enabled them to open current accounts in multiple banks and deposit cash in small amounts in those accounts. A maze of money transfer layers was then put into action by means of which the cash got transferred back into the account of the beneficiary,” explained a senior IT department officer, on condition of anonymity.
“The identification of shell companies and their operators since 2015-16 by the IT department, along with the Serious Fraud Investigation Office (SFIO) and Registrars of Companies (ROC), has resulted in a temporary setback to these operators and the established money laundering network. The turnaround time for the money to get pumped back into the system is now taking longer than what it used to take previously. That’s why we are witnessing so many cash hauls which are taking place somewhere in an interim phase of a fledgling laundering operation where cash cannot be easily pumped back,” the officer said.
“That, coupled with certain stringent amendments in the IT Act and court verdicts in favour of the IT department have put up difficult hindrances before the shell company operations,” he added.
Another officer, however, said, “While demonetisation was a good move, launderers used the three-month buffer period for note conversion to get large amounts of cash in Rs 2,000 denominations.”
HAWALA ROUTE
The other option is to move the cash by hawala, but it requires logistical arrangements for cash transit. As hawala operations happen mostly out of Mumbai, the cash has to be physically transported in smaller tranches by means of rail or roadways network, which is time-consuming.
“The cash recovered from the properties of Partha Chatterjee’s aide was supposed to be smuggled out of the country through hawala. That was evident from the way it was being packeted and getting ready to be couriered. The fact that so much cash was recovered by the ED was because the operators took time to get the job done,” the officer said.
THE MEDIA ANGLE
Now sample these headlines from leading Bangla dailies on their page ones while covering the incidents stated above: Partha Ke Prashna, ‘Ghanishta’-Ghare 20 Koti (Partha Questioned, 20 Crore At ‘aide’s’ Room: Anandabazar Patrika, July 23); ED-r Tallashite Millo 20 Koti (20 crore Recovered from ED Raid: Ei Samay, July 23); Takar Bandile Thasha Ghar Theke Shouchalay (Loads of Cash Bundles Stashed in Rooms and Toilets: Anandabazar Patrika, July 29); Arpitar Nityanatun Sampatti Dikey Dikey (Newer Assets of Arpita Unearthed from All Directions: Sangbad Pratidin, July 29); Bathroomer Nakal Dewale Toka Martei Bandil (Bundles Pour Out After a Knock on the False Walls of Bathroom: Ei Samay, July 29); Byabshayir Ghore Khat Khultei Note Er Paharh, 17 Kotir beshi Uddhar (Mountain of Cash Found Stashed Inside Bed at Busineman’s Room, Over 17 crore recovered: Anandabazar Patrika, September 11).
Bombarded with real-life pictures of cash hills inside homes, a phenomenon thus far only witnessed on silver screens (reel-life) and intricate details how the cash was hidden, how it was found and even the number of trunks brought in by agencies to carry the seized cash, the economic sensibilities of the average Bengali take a hit.
However, this isn’t the first time that agencies are recovering cash from spurious entities. Why then are visuals of cash haul, recorded at the time of search operations, almost immediately making way to the mass media, when earlier the media had little or almost no access to such closed-door operations?
THE INTEREST
“Judging from the conversations on social media and public spaces, people are keener to find the connection of political netas behind the money instead of the immediate suspect,” said an officer of a central agency on condition of anonymity.
“While in SSC scam case, immediate connections were allegedly established between Arpita and Partha, in the latest case of Garden Reach cash haul, more people seem to be talking about local MLA and Trinamool leader Firhad Hakim than the original suspect, Amir Khan, who is absconding,” the officer said.
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