Gautam Khaitan, former board member of a Chandigarh-based tech firm named in the Rs.3,700 crore AgustaWestland VVIP chopper deal case, is the first accused to be arrested by the Enforcement Directorate on Tuesday for his alleged role in routing funds for kickbacks.
The ED has sought Mr. Khaitan’s custodial interrogation as the agency believes that through him it can also blow the lid off a network of companies suspected to be involved in managing unaccounted money, particularly in the Lichtenstein-based LGT Bank trust accounts.
According to sources, the ED has found that some of Mr. Khaitan’s employees were directors in the companies associated with certain LGT bank accounts’ beneficiaries.
Searches yield Rs. 1 crore worth jewellery
Mr. Khaitan’s name had also cropped up in the list of 600 entities of Indian origin, disclosed in 2013 by the International Consortium of Investigative Journalists (ICIJ), who had through front companies or in their own names allegedly parked money in tax havens.
The ED, during searches at the premises of Mr. Khaitan on Monday, has seized jewellery worth over Rs.1 crore and documents purportedly pertaining to some transactions between AgustaWestland and another company IDS Tunisia.
Based on the investigations conducted by the Italian authorities and disclosures by alleged middleman Guido Ralph Haschke, who struck a plea bargain in the case there, an Italian court had earlier summoned Mr. Khaitan to join the proceedings. However, he did not turn up, following which the court issued a warrant against him.
ED probe, based on the papers received from Italy through the Defence Ministry, has revealed that around €60 million were purportedly paid by the chopper suppliers to clinch the deal. While British citizen Christian Michel received €30 million, Giuseppe Orsi of the parent Italian firm Finmeccanica got €12 million, the remaining went to Mr. Haschke and another middleman Carlo Gerosa for further transfer to India.
The probe agency has alleged that the then AgustaWestland (UK) CEO Bruno Spagnolini transferred funds to Mr. Haschke and Mr. Gerosa in the garb of multiple consultancy contracts with Gordian Services, a company they were associated with. Through a contract, the company also agreed to appoint Gordian Services as a consultant in the VVIP chopper deal.
Mr. Spagnolini along with Mr. Orsi subsequently entered into engineering contracts with two companies IDS Infotech and IDS Tunisia as a “subterfuge” to pay kickbacks to middlemen and public servants in India.
Both the ED and the Central Bureau of Investigation have accused Mr. Khaitan, who was earlier a legal advisor to IDS Infotech, of introducing the middlemen to the company chairman Satish Bagrodia and managing director Pratap K. Aggarwal. The firm is suspected of being used to route the kickbacks in the garb of engineering contracts.
The agencies have alleged that between November 2007 and April 2010, the company received €2.1 million from AgustaWestland, and then IDS Tunisia was floated as a 100 per cent subsidiary of IDS Infotech for the purpose.
Later IDS Tunisia was sold to Mr. Haschke and Mr. Gerosa, after which another Chandigarh-based company Aeromatrix was set up and the business of IDS Infotech was transferred to it. The kickback money was subsequently transferred via Aeromatrix on the pretext of purchase orders from IDS Tunisia in the form of “fictitious or over invoices”.
ED probe has revealed that 82 per cent of shares of Aeromatrix were held by another company Infotech Design System (IDS) Mauritius and 17 per cent by Mr. Khaitan. The agency has also found that he had links with Mauritius-based Interstellar Technologies, another “front” company.
Based on the CBI findings, the ED had on July 3 registered the money laundering case in the VVIP chopper deal against retired Air Chief Marshal S.P. Tyagi, his three cousins and 16 others. It has been alleged that Mr. Tyagi approved reduction in the required flying capability of helicopters from 6,000 to 4,500 metres, which allowed the supplier to bid for the contract.
According to the ED, Air Chief Marshal Tyagi’s cousins Julie, Dosca and Sandeep Tyagi -- who already knew Mr. Haschke and Mr. Gerosa, -- entered into a consultancy contract with Gordian Services (Tunisia) in 2004.
Under the contract, the Tyagi brothers allegedly received €1.26 lakh after May 2004 and €2 lakh after February 2005. Air Chief Marshal Tyagi was designated to be IAF chief in November 2004 and he took over in January 2005. His term ended in March 2007.