The scandal-hit United Progressive Alliance government faced a fresh corruption-related challenge on Friday, with the surfacing of a document purporting to show that one of India’s largest steel firms made payoffs to senior officials in key ministries, and even the media.
The document, claimed to have been seized by the Income Tax Department during a December 1, 2010 raid on the New Delhi offices of the Pramod Mittal-controlled Ispat Industries, appears to record off-book cash transactions made by company staff from 2007.
The spreadsheet purports to show that payments of Rs. 27,74,535, Rs. 1,00,00,000 and Rs. 50 lakh were made to an individual identified as ‘VBS.’ In addition, payments of Rs.15 lakh were made to an individual “Min of Steel APS.” Transactions of Rs .1 crore to an individual identified as “AS for PC” are recorded for September 11 and 16, 2008.
In addition, the document appears to show Ispat officials routinely paid out cash to officials in the Ministry of Finance, Commerce, Company Affairs, Petroleum, Coal, Mines, Steel, Environment and Forests, Rural Development, Highways and Road Transport and the National Highways Authority of India.
The document also records a welter of relatively minor transactions: among them, over Rs.1 lakh for “entertaining” a Nigerian minister; a cash payment of $1,500 to an unidentified Korean diplomat, at a time when Ispat was reported to be negotiating rights to a steel mine in Busan; multiple Rs.10,000 payments to a journalist then working for a major business newspaper; bribes to lower-level officials in several states; and payments to major fashion designers on behalf of members of the Mittal family.
Mr. Mittal and Ispat did not respond to repeated efforts by The Hindu to contact them. However, in a statement to NDTV late on Friday night, he denied any knowledge of the purported transactions. Income-Tax official Prashant Khambra, who signed the seizure document, also did not return messages left at his home by The Hindu .
In 2010, Himachal Pradesh-based Congress leader Virbhadra Singh held office as Union Steel Minister. His Additional Personal Secretaries were S.R. Singh and P.S. Raghuvanshi, while P. Durga Prasad and N. Shankar held the same positions for Mr. Singh in his official capacity. Mr. Virbhadra Singh told NDTV that he had no knowledge of these payments and that the surfacing of the allegations was an attempt by the BJP and its leader Arun Jaitley to influence the outcome of the impending Himachal Assembly elections.
Congress spokesperson Manish Tewari said the document was not evidence of wrong-doing. “You will recall the Jain-Hawala case”, he told The Hindu , “where the initials of various political leaders were widely claimed to constitute evidence that they had engaged in corruption. The Supreme Court, however, later held that mere diary entries, which anyone can fabricate, do not in themselves have evidentiary value. It is easy to defame individuals.”
Income Tax officials were not immediately available for comment on what efforts they had made to corroborate the findings in the spreadsheet. BJP leader Ravishankar Prasad, however, alleged the department had refused to respond to queries on the issue from vigilance authorities.
Ispat Industries, which was jointly owned by multinational steel tycoon Lakshmi N Vittal’s brothers Pramod and Vinod Mittal, was targeted in search operations conducted at 50 locations by Income Tax Authorities on November 30, 2010.
Shortly thereafter, Virbhadra Singh was dropped from the Union Cabinet.
Pramod Mittal is the chairman of IIL while Vinod Mittal is the vice-chairman and managing director of the loss-making company. According to the company website, as on June 30, 2010, the company posted a loss of Rs 322.34 crore. The domestic steel maker posted losses of Rs 331 crore for the quarter ending September 30, 2010, compared to Rs 79 crore during the same period a year ago.
JSW Steel had acquired 41 per cent stake in the debt-ridden Ispat Industries in December 2010, soon after the raids, for about Rs 2,157 crore. Ispat Industries was subsequently named as JSW Ispat. JSW Steel later increased its stake to 46.75 per cent and remains the single-largest shareholder in JSW Ispat.
