NEW DELHI: The Central Bureau of Investigation on Friday arrested a U.S. national of Indian origin here in the case of wheat import from Australia by the public sector State Trading Corporation (STC) in 1998.
The agency reopened the case on July 7 this year, conducted searches at several places and arrested the then STC Chairman-cum-Managing Director and a Delhi-based person who had allegedly acted as a middleman.
The case was registered on September 11, 2001 following an allegation that two million tonnes of wheat was imported from the Australian Wheat Board (AWB) though the procurement and stocks were quite comfortable in 1998, a CBI release said here.
It was alleged that various bidders were rejected on frivolous grounds and the contract was awarded to the AWB at exorbitant prices.
As the Letter Rogatory then sent to Australia remained unexecuted and no proper material was revealed to substantiate the allegations, the case was closed in January 2004.
But it was reopened on receipt of certain documents from Australia including on payments of commissions to the tune of $2.5 million.
The former STC chief and the middleman, who were arrested on July 8 and have been in CBI custody, have disclosed that companies were floated on the Cayman Islands and in the Bahamas for laundering the commissions received from the AWB with the involvement of the U.S. national of Indian origin based in Los Angeles, according to the CBI.
Arrest at station
Subsequent investigations revealed that the U.S. national was staying in India at present. Acting on the tip-off, a CBI team arrested him at the New Delhi railway station when he arrived from Mumbai by the Rajdhani Express. The CBI is also conducting searches at his address in Mumbai.
The CBI said he had actively colluded with the other accused in channelling the commissions received from AWB.