In a case that can have wide security and economic ramifications, the CBI has booked Arvind Mayaram, former secretary at Department of Economic Affairs in the Union Finance Ministry, for alleged corruption and irregularities in currency printing in 2004. The allegations involve granting of tender for supply of exclusive colour shift security thread for printing Indian currency notes without mandatory security clearance from the Union Home Ministry and also causing loss to the government exchequer.
The FIR has been filed against Mayaram, unknown officials of UK-based De La Rue International Ltd and unknown officials of the Ministry of Finance and the RBI under the Prevention of Corruption Act and various sections of the Indian Penal Code on January 10.
The CBI had sought approval of the Department of Economic Affairs to act against the former finance secretary as per the laid down procedure. Once the sanction for prosecution was granted, the agency swooped down on the top official and conducted raids across Delhi and Jaipur.
The CBI probe is based on a complaint filed by Raj Kumar, a joint secretary and the chief vigilance officer in Department of Economic Affairs on February 14, 2017. Based on the complaint, the CBI ordered a preliminary inquiry which revealed that the government had entered into an agreement with the UK-based company for supply of exclusive colour shift security thread for Indian bank notes in 2004 for a period of five years. The contract agreement was subsequently extended four times till December 31, 2015.
The CBI enquiry revealed that the then finance minister in July 2004 had authorised the RBI for entering into an exclusivity agreement with the suppliers of exclusive security feature on behalf of the Centre. After that, a sub-committee headed by P.K. Biswas, executive director, RBI was constituted to go through all aspects of exclusivity of three security features firmed up for Indian bank note papers and also to go into the details of prices. The exclusivity agreement was signed by the RBI with De La Rue on September 2004.
However, the enquiry revealed that De La Rue made false claims of holding patent and that they did not have any patent for their colour shift thread at the time of presentation in 2002 and their selection in 2004, according to CBI sources.
In April 2006, both the RBI and the SPMCIL (Security Printing and Minting Corporation of India) submitted their reports regarding non-possession of patent by De La Rue for their colour shift thread, but it is alleged that Mayaram did not apprise the same to the finance minister, as per the FIR. Senior Congress leader P. Chidambaram was finance minister during this period.
The FIR further says that despite non-possession of patent by De La Rue, the contract agreement was extended time to time till December 2012. The contract agreement did not have any termination clause, said a CBI official.
According to the probe agency, Mayaram was not oblivious to the intricacies of the agreement. When it was brought to his notice that the contract agreement with De La Rue had expired on December 2012 and an extension cannot be granted legally, he allegedly approved another three years extension of the expired contract overruling the fact that extension cannot be granted without obtaining mandatory security clearance from the Ministry of Home Affairs, said the CBI.
The agency has accused Mayaram of acting in his personal capacity without taking approval from the finance minister. The CBI is further looking at how the signatory of the contract agreement on behalf of De La Rue had received Rs. 8.2 crore from offshore entities apart from the remuneration paid by the company in 2011.
The CBI enquiry has prima face revealed that a criminal conspiracy was hatched by the accused to provide undue advantage to the company causing wrongful loss to the government exchequer.
