Power-broking Inc.

Raids and revelations linked to V. Balasubramaniam add new dimensions to the probe into Romesh Sharma's career in crime, sleaze and power-broking.

PRAVEEN SWAMI
in New Delhi

HE was said to have arranged to get Dawood Ibrahim's mother a passport to enable her to leave India in the wake of the Mumbai serial blasts of 1993. He allegedly promised to have Dawood Ibrahim's key rival Babloo Shrivastava eliminated by the Uttar Pradesh police. He held parties where much of Delhi's political class organised the deals that keep them in power. And now, officials investigating Romesh Sharma's career in crime, sleaze and power-broking say, he was a key figure in negotiating a deal between V. Balasubramaniam of the Reliance industrial empire and an underworld group. Raids on Balasubramaniam in New Delhi have revealed a whole can of worms.

On October 20, officials of the Delhi Police's South Range who had no knowledge of an ongoing Crime Branch-Intelligence Bureau surveillance operation linked to the matter, raided Sharma's premises. At that stage, Delhi Police Crime Branch officials who were monitoring Sharma's telephones felt that the raid had scuppered their prospects of ever prosecuting Balasubramaniam. Although discussions between Sharma and Balasubramaniam on a deal had been tapped, the contents of the tapes were too vague for meaningful use in a court of law. Amid the acrimony between the Crime Branch and the South Range police, the investigation almost came to an abrupt end.

V.S. RAMANATHAN
Romesh Sharma.

But sustained interrogation of Sharma yielded evidence needed to facilitate the issue of a warrant to search Balasubramaniam's home and office. Late on October 28, the Reliance Industries Limited (RIL) office at Delhi's Connaught Place, and Balasubramaniam's home were raided. Police officials are still wading through the documents they recovered, but believe that they already have enough material to proceed on. Joint Commissioner of Police Amod Kanth told Frontline: "The documents illustrate the use of Dubai by Sharma and Balasubramaniam to secure movement of funds, but the specific nature of those transactions is still being investigated," Amod Kanth refused to discuss the content of the investigation. "I have made clear earlier that the investigation does not concern the activities of Reliance as a corporate entity, but it does concern the group," he said.

Subsequently, on November 14, RIL offices at Maker Chambers IV at Mumbai's Nariman Point were raided in the course of the investigation.

Even more curious than the transactions were other documents recovered from Balasubramaniam. On November 6, a First Information Report (496/98) was filed against him for violation of the Official Secrets Act. Central Bureau of Investigation (CBI) officials handling the case have remained silent on the classified documents in question, but indicated that their import was extremely serious. The documents include copies of Cabinet notes on India's financial plans, including proposed floor prices for public sector units disinvestment. Other papers recovered from Balasubramaniam, informed sources told Frontline, contain details of official assessments about the future of the petroleum sector. Such documents have, self-evidently, enormous value. The use to which the documents were put and the sources of their leak to Balasubramaniam are being investigated.

The Delhi Police's charge that Balasubramaniam was negotiating on behalf of Reliance has, not surprisingly, been denied by all those they are investigating. Reliance denied earlier reports that Balasubramaniam was dealing with the Dawood Ibrahim group on its behalf, while the official's counsel issued a similar disclaimer. The disclaimer also said that no documents were recovered from him in the first place.

Meanwhile, Rajendra Banthia, a Mumbai stock-broker, when contacted by Frontline, denied that he knew either Balasubramaniam or Sharma. When he was told about certain revelations regarding a deal involving the three persons that Delhi Police officials had told Frontline Sharma's interrogation had thrown up, Banthia said: "No, no, no! It's all nonsense!"

The high-profile stockbroker has reason to worry, for the latest Balasubramaniam-linked scandal is not the only crisis he is confronted with. On November 9, Banthia resigned as vice-president of the Bombay Stock Exchange (BSE) after Harvest Deal Securities, a stockbroking firm he controls, was held responsible by the Securities and Exchange Board of India (SEBI) for share price manipulation. Harvest Deal was among 18 firms whose operations SEBI halted through an October 30 order for manipulating the share prices of BPL, Videocon International and Sterlite Industries. The SEBI report records prima facie evidence that Harshad Mehta, infamous for his role in the 1992 securities scandal, was behind the price manipulation. Mehta, SEBI claims, engineered the price-rigging through seven companies of which two of his brothers-in-law, neither having any real experience in matters financial, were directors.

Banthia, however, denies having bought any BPL, Videocon or Sterlite shares for Harshad Mehta. Harvest Deal and two of the 17 other stockbroking firms involved approached the Bombay High Court and secured a stay of the SEBI order. The stay was subsequently vacated, but the court ruled that the three firms should be barred from operations only in the case of BPL, Videocon, Sterlite and Nedungadi Bank shares.

Curiously, Banthia had attracted media scrutiny in November 1995 as well, that time for a bear hammering of Reliance Industries Limited stocks. In a November 29, 1995 letter written to the BSE, Reliance charged Banthia and BSE director M.G. Damania with being "inimical to our company" because of their connections with some of the group's business rivals.

What Banthia has or has not been doing this time around will presumably be settled by the investigation; that is, if the investigation proceeds as it ought to - for those in big business were not Sharma's sole friends.

THERE is considerable evidence that political patronage was instrumental in ensuring for Delhi's most high profile fixer immunity from prosecution in the past. This patronage is not the subject of any of the 14 cases filed against him so far. None of the dozens of political figures named in Sharma's diaries has so far been formally questioned. Former Chief Election Commissioner T.N. Seshan's Deshbhakta Trust, which operated reportedly free of rent from one of Sharma's premises in New Delhi, has also come in for scrutiny in this context. The list of suspects has the names of police officials also, including one former Commissioner of Police who allegedly received expensive gifts from Sharma.

Sharma's pervasive influence is best illustrated by his 1991 Punjab adventure as part of the entourage of former Union Minister of State for Home Subodh Kant Sahay during his election campaign. When the controversial former Punjab Minister Malkiat Singh Birmi complained of threats from the Abu Salem group, surveillance operations were launched against Sharma. Birmi, at the time allegedly both a source of information for M.S. Bhullar, now Additional Director-General of Police, and with alleged links to smuggling operations, had come to know Sharma in 1991 through Sahay's Officer on Special Duty, Y.K. Ranjan.

Ranjan, now a somewhat shadowy political figure in New Delhi, was among Sharma's closest associates, running his National Campaign Against Corruption from the now-notorious Mayfair Gardens homes. The two subsequently fell out, and Ranjan played a key role in the recovery by the CBI of smuggled silver from Sharma's home in 1992; for reasons known only to itself, the CBI did not pursue this matter.

What is perhaps most interesting regarding this period is that Amod Kanth, though then formally in charge of jails, was in Punjab along with Ranjan, assisting the former Union Home Minister through his Punjab intervention. The two other officials attached to Amod Kanth in Punjab were the controversial Intelligence Bureau official Moloy Dhar and bureaucrat Kishore Kunal. Amod Kanth's official contact with Ranjan makes it more than likely that he would have known Sharma, who was then at the height of his affiliation with Ranjan. In response to a question, however, Amod Kanth told Frontline that he had no memory of Sharma from this period. "There were large numbers of people hanging around the campaign," he said, "so I could have met dozens of people and not remembered it." "My job with Sahay wasn't political, it concerned security issues."

While this statement by Amod Kanth, who has a reputation for financial probity, may well be true, the linkages raise several issues. Sahay's election campaign helped Sharma to engineer police security for himself briefly in 1991-1992, and to build a network of political affiliations which he was later to deploy.

Such influence often operated in myriad ways. Reliable sources told Frontline that Ranjan had at one point contacted local police officials in Ferozepur to ensure the victory of a particular faction in a local transport union election.

According to a recent report in The Hindustan Times, Parminder Singh 'Pinky', one of the leaders of this faction, runs an influence peddling racket centred on the Governor of Punjab, B.K.N. Chibber. While no one would accuse Chibber of associating himself with criminals, Sharma's use of Sahay's election apparatus illustrates just how easily criminals have been able to gain access to political legitimacy.

If Amod Kanth's possible association with Sharma was innocuous, the associations of many former Prime Ministers and Chief Ministers who subsequently patronised the master of the connections industry were most certainly not. Crime Branch Additional Commissioner of Police Harmeet Singh, too, maintained contact with Sharma even as his department was engaged in tapping his phones. Officials who stood up to Sharma, notably Income Tax Additional Commissioner Vishv Bandhu Gupta who raided his homes in September, were dealt with harshly. On November 2, Gupta formally petitioned Chief Election Commissioner M.S. Gill against his summary transfer, claiming that Delhi Chief Minister Sushma Swaraj acted against him because she needed Sharma's assistance in her election campaign.

It is a matter of speculation what might have happened to the Crime Branch-Intelligence Bureau investigation if Amod Kanth had not jumped the gun. The CBI, which will handle some of the most serious cases against Sharma, has a less than illustrious record of pursuing crimes committed by those with powerful patrons. Despite the alarming mass of evidence arrayed against Sharma, it is far from clear whether the CBI and the Delhi Police have the will or the conviction to go where their investigation will take them. And the failure to build up cases that will stand the test of a legal trial could well mean Dawood Ibrahim's man in Delhi is out of the net sooner than most people would like to think was possible.

With inputs from R. Padmanabhan in Mumbai.

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