An Assistant in the Department of Economic Affairs (DEA) and a partner in a Mumbai-based legal firm were arrested by the Central Bureau of Investigation late on Friday evening for their alleged involvement in corporate espionage. Five persons, including three government officials, have been arrested in the case so far.
Ram Niwas, the accused Assistant with the DEA, was arrested for selling classified documents from the Foreign Investment Promotion Board (FIPB) section. “Paresh Chimanlal Buddhadev, partner in Chitale & Associates, has been arrested for obtaining classified documents and destroying evidence. He was trying to destroy two sacks stuffed with papers, some of which have been seized,” said a CBI official.
The official said several mid-ranking officials in the Finance and the Commerce Ministries have come under scanner for alleged theft and sale of classified foreign investment policy papers to middlemen for further supply to over a dozen private firms.
“Preliminary findings indicate that the first and second level of decision making in both ministries were compromised. Some more officials are likely to get arrested. The suspects were sending the documents through email and courier,” said a CBI official.
At the instance of Mumbai-based accused Chartered Accountant Khemchand Gandhi, to whom the classified papers were allegedly being supplied, the agency had on Friday conducted searches on the premises of the legal firm and another chartered accountancy firm in Mumbai.
“Chitale and Associates and the office of Chartered Accountant Mitesh J. Majithia were allegedly receiving documents through Mr. Gandhi. Copies of several classified papers were seized during searches,” said the official, adding that four more private firms that bought policy papers through middlemen have been identified.
The private banks allegedly named by Mr. Gandhi during CBI interrogation have issued strong denials. “We have read with utter dismay the media reports and allegations made therein. We are shocked at our name being mentioned in them. We categorically deny having known or heard of, let alone interacted with, the individual named in these news reports,” said an HDFC Bank statement.
“Any suggestion that we may have indulged in any wrongdoing is completely baseless and untrue. We state that these allegations, apart from being baseless and untrue, are defamatory and an attempt to malign the reputation of HDFC Bank. We have always adhered to the highest standards of integrity...will continue to do so in the future,” it added.
IndusInd Bank also said: “We strongly deny that this episode has anything to do with IndusInd Bank. Our bank maintains the highest standards of compliance, integrity and corporate governance.”
However, despite several attempts, Glenmark Pharmaceuticals did not respond to clarify its stance, while officials at the NovaLead Pharma’s Pune office were not available for comment. Real estate Analysts in Mumbai expressed ignorance about the realty firms purportedly named by Mr. Gandhi as beneficiaries.
Earlier on Friday, the CBI obtained three days' transit remand of Mr. Gandhi, whereas Ashok Kumar Singh, Under Secretary in the Department of Disinvestment; and Lala Ram Sharma, Section Officer in the Department of Economic Affairs, were remanded to its five days' custody.
Meanwhile, HDFC Bank and IndusInd Bank stocks came under volatility throughout the day, closing lower on the stock exchange on Friday. HDFC bank closed at 1043, down 1.15 per cent, and IndusInd Bank closed at 875, down 1.84, on the BSE on a day when the broader BSE Sensex closed with a loss of 1.48 per cent. Glenmark Pharmaceutical closed with a gain of 0.48 per cent at Rs.842.
