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The agency also searches the former finance secretary’s premises in Delhi, Rajasthan
The Central Bureau of Investigation (CBI) registered a case against former Union Finance secretary Arvind Mayaram for allegedly giving undue favour to UK-based De La Rue by way of granting an illegal extension for the supply of exclusive colour shift security thread for Indian banknotes.
The central agency said that Mayaram’s decision resulted in “wrongful gain” to the company and a corresponding wrongful loss to the government exchequer.
Besides Mayaram, the CBI has named unknown officials from De La Rue, the Union Finance Ministry and the Reserve Bank of India (RBI).
The CBI also carried out searches at Mayaram’s premises in Delhi and Rajasthan. A CBI source related to the probe told The New Indian, “The CBI is carrying out searches at the premises of Mayaram in Delhi and Rajasthan in connection with the case.”
The source said that the agency registered a case against the former Secretary and others after it carried out a preliminary inquiry in 2017 on the complaint of Raj Kumar, Joint Secretary & CVO, Department of Economic Affairs, Ministry of Finance, on February 14, 2017.
The CBI registered a case after its investigation revealed that the Indian government entered into an agreement with De La Rue International Ltd., now De La Rue, for the supply of exclusive colour shift security thread for Indian banknotes in 2004 for five years.
The contract agreement was subsequently extended four times till December 31, 2015.
CBI enquiry further revealed that the then Finance Minister (P Chidambaram) on July 17, 2004, authorised the Reserve Bank of India (RBI) for entering into Exclusivity Agreement with the suppliers of exclusive security features on behalf of the Government of India.
“Thereafter, a subcommittee headed by PK Biswas, Executive Director of the RBI, was constituted to go through all aspects of the exclusivity of the three security features firmed up for Indian Banknote Papers and also to go into the details of prices,” CBI said.
“Enquiry has further revealed that the Exclusivity Agreement was signed by the RBI with De La Rue on September 4, 2004. It was stated in the agreement that “Whereas De La Rue has developed an exclusive India Specific Green to Blue colour shift clear text MRT machine-readable security thread for use in Indian banknote paper and for which De La Rue holds exclusive manufacturing rights”,” CBI said.
“Enquiry further revealed that De La Rue made false claims of holding patents, and they did not have any patents for their colour shift thread at the time of presentation in 2002 and their selection in 2004,” the agency said.
“Enquiry has also revealed that De La Rue applied for a patent in India in the name of “a method of manufacturing substrate” having colour shift effect only on June 28, 2004. The date of publication of this patent was March 13, 2009, and the date of grant of the patent was June 17, 2011,” CBI added.
“Enquiry revealed that the Exclusivity Agreement was signed by Biswas without verification of the patent claim of De La Rue. The inquiry has also revealed that the contract agreement did not have any termination clause,” the CBI said.
The agency further said that its inquiry further found that both RBI and SPMCIL, on April 17, 2006, and September 20, 2007, respectively, submitted their reports regarding the non-possession of the patent by De La Rue for their colour shift thread, but Mayaram never apprised the then Finance Minister (P Chidambaram) of the same.
The CBI claimed that its investigation revealed that, despite De La Rue’s non-possession of the patent, De La Rue’s contract agreement was periodically extended until December 31, 2012.
“Enquiry further revealed that on May 10, 2013, the matter was brought to the notice of Mayaram, as Secretary, Economic Affairs, that the contract agreement with De La Rue had expired on December 31, 2012, therefore, an extension cannot be granted legally,” it said, adding that Mayaram, Secretary, DEA, on June 23, 2013, approved another three years extension of an expired contract to De La Rue.
Mayaram also overruled the fact that an extension cannot be granted without obtaining mandatory security clearance from the Ministry of Home Affairs.
“Arvind Mayaram also did not seek approval from the then Finance Minister for this instance, whereas previous three extensions, i.e., from September 4, 2008, to June 30, 2011, from July 1, 2011, to December 31, 2011, and from January 1, 2012, to December 31, 2012, were approved by the then Finance Minister,” the CBI said.
“Enquiry has also revealed that Anil Raghbeer, signatory of Contract Agreement from De La Rue has received ₹8.2 crores from offshore entities apart from the remuneration paid by De La Rue in 2011. Therefore, an inquiry has prima facie revealed that a criminal conspiracy was hatched among De La Rue International Ltd., UK; Mayaram, the then Secretary; unknown officials of the Union Ministry of Finance; unknown officials of the RBI and unknown others,” the CBI had noted.
“In furtherance of said criminal conspiracy, Mayaram had provided an undue favour to De La Rue by way of granting an illegal extension, which resulted in an undue or wrongful gain to De La Rue International Ltd., UK and corresponding wrongful loss to the government exchequer,” the CBI said.
