Lalit Modi Row: Tweeting trouble

As details of the extent of Lalit Modi’s network continue to arise, few seem safe from being found followers or friends

Sadiq Naqvi Delhi 

Barely a month after Narendra Modi’s BJP government flagged off its celebration of ‘one year of corruption-free governance,’ the London-based Sunday Times blew the lid off its first major scandal.

In a flurry of secret exchanges, Foreign Minister Sushma Swaraj had sought to intervene with the British authorities to assist fugitive businessman Lalit Modi, whose Indian passport had been revoked, to travel from London to Portugal. The pretext for the request was that the fugitive’s ailing wife was in hospital there. With the former chairman of the Indian Premier League (IPL) and vice president of the Board of Control for Cricket in India (BCCI) battling corruption charges, however, Swaraj’s advocacy on his behalf was viewed as inappropriate.

The scandal has certainly undermined the BJP’s efforts to present a squeaky clean image, but the fact that the story broke in the UK, rather than the Indian press, with even the Congress party seemingly surprised by some of the details, suggests the trigger for the revelations may have less to do with India’s domestic political scene than with Britain’s internal wrangling and the deteriorating state of New Delhi’s relationship with London. 

The London paper broke the story as Keith Vaz—a senior Labour party politician of Indian origin—was contesting for a consecutive term as Chairman of the Select Committee on Home Affairs, a powerful parliamentary oversight body. It alleged that Vaz was mediating between British Immigration authorities and Modi’s sympathisers in the Indian Government.

“The British investigators were after Keith Vaz for a while,” an Indian Finance Ministry official told this reporter. “They had been seeking details of his financial dealings here.” The finance ministry investigator believes that Swaraj was just collateral damage in that investigation.

The report and subsequent allegations also came at a low point in India’s relationship with the United Kingdom. Indian agencies recently accused British intelligence agency MI6 of leaking details concerning India’s Research and Analysis Wing’s (R&AW) financial support of Pakistan’s Muttahida Qaumi Movement (MQM)—information which has deepened misgivings between the two nuclear-armed neighbors. Former R&AW Chief AS Dulat bluntly retaliated to these leaks by saying that M16 organised MQM in London, so they should know who is funding this group. 

The Indian and the British governments have also been at loggerheads over London’s efforts to push a deal between Afghanistan’s National Directorate of Security (NDS) and Pakistan’s Inter-Services Intelligence (ISI). Delhi believes that such a deal will nullify all India’s efforts to build strong ties with the Afghan government; Indian officials reportedly informed their British counterparts that such mediations might prompt Prime Minister Modi to cancel his planned visit to the UK. While an intelligence agency scheme to destablise Modi’s government by using Lalit Modi from London may sound far-fetched, in a world where major events are triggered by Twitter and Facebook, nothing can be ruled out.

Since the story first broke, more skeletons have tumbled out from number 117, Sloane Street Mansion in London, where Modi has been living, as his application for permanent residency in the UK is under consideration. A letter written by Rajasthan Chief Minister Vasundhara Raje asking the courts to allow Lalit Modi to travel made its way to India media houses. Raje had asked the British authorities to ensure that it be kept a secret. By what means that letter ended up with the Indian media is yet to be ascertained, however, journalists on the story say that a lot of information is being plugged through veiled channels by Lalit Modi himself.

Meanwhile, Raje was not the only one: Lalit Modi took to Twitter to counter allegations made against him in the Indian media. He alleged that he was being unfairly targeted. Former BCCI Chief and Chennai-based businessman N Srinivasan, and Finance Minister Arun Jaitley, who has also had a long association with the BCCI, were party to the very same IPL deal that had gotten him in trouble, Modi claimed.

The case pertains to a broadcast deal worth $ 1.02 billion with Sony MSM. It is alleged that the money entered India without prior approval from the RBI, which is mandatory for such transactions. Modi is also under investigation for FEMA violation in another bid by Emerging Media, to the tune of `20 crore. The Enforcement Directorate also suspects forex-related discrepancies in remittances made by the BCCI to International Management Group, UK, Ltd, towards consultancy fees for IPL, from 2008 to 2010.

The Enforcement Directorate, responsible for investigating money laundering on behalf of the finance ministry, registered a FIR way back in 2010. The agency also issued as many as 15 summonses to Modi to come and join the probe. The case didn’t have any criminal charges of money laundering, however; it was just confined to FEMA violations, so Modi was not forced to return to the country, despite the FIR. A request for extradition during the UPA government was in fact turned down by the British authorities, if a finance ministry official is to be believed. It is not known whether a lack of evidence, or pressure from influential persons, or both, forced the ED not to lodge criminal charges. The FIR was lodged by N Srinivasan in Chennai, in which he alleged that Modi indulged in cheating and criminal conspiracy.

Since then, the ED has recently added new charges of criminal forex violations under the Prevention of Money Laundering Act so that its requests for information, letters rogatory et al. are taken seriously. Informed sources in the ED say that as many as 16 FEMA violations have been added to the charges. Investigators say this will lead to a tough chargesheet against Modi. 

The ED is also probing his links with a slew of companies formed in tax havens that also own stakes in several IPL franchises. Sleuths suspect a Modi link in at least three IPL franchises, including the Rajasthan Royals, the Kings XI Punjab and the Kolkata Knight Riders.The flamboyant tycoon is accused of violating FEMA in another broadcast deal, worth `450 crore, clinched in Mauritius.

There are also allegations that Modi made IPL pay a facilitation fee of $80 million to World Sports Group to withdraw from global IPL TV rights. Mauritius-based WSG won a 10-year contract in 2008 for $918 million, but the agreement was annulled, and a fresh contract was signed with Sony-MSM. Officials at ED suspect that Modi could be one of the beneficiaries of the `125 crore deal between these two entities. All of these allegations, however, are still in the realm of speculation, for the ED is yet to investigate the matter thoroughly on its own; the agency relied on information provided by the BCCI, which performed an initial enquiry into the murky deals. So why didn’t the UPA government investigate properly, if they had such misgivings about Modi’s financial misdeeds? In some ways his hasty exile bore similarities to that of Bofors-accused Ottavio Quattrocchi—as though the government thought it would be prudent not to have him around to answer too many questions.

Interestingly, the investigations have been expedited only since Arun Jaitley took over as finance minister. Jaitley has also been a constant target since Lalit Modi took to Twitter to launch attacks on his perceived foes; as the disciplinary head of the BCCI, Jaitley banned Modi from the body
in 2013. 

President of Delhi District Cricket Association, Arun Jaitley has been in the centre of a power struggle in the BCCI: he apparently succeeded in unseating Modi as the IPL commissioner. Srinivasan supposedly had his blessings until his son in law, Gurunath Meiyappan, was found to be mixed up with the bookies trying to fix the result of the IPL matches, making money in the process. Jaitley, too, has been facing allegations of misconduct in the DDCA, from his own party colleague, Kirti Azad. Sources say that a PIL might find its way to the Supreme Court soon calling for investigations soon into the role of the finance minister.

This power struggle is said to be at the heart of what started Lalit Modi’s war. It is said that Modi recorded every meeting and went to the extent of taking the help of a foreign firm to hack into Srinivasan’s email account.

This is not the first time that the cricket honchos have taken to such cheap tactics. Back in 2013, Parliament was brought to a standstill when Jaitley, then the leader of the opposition in the Rajya Sabha, complained that his call detail records had been illegally accessed. Investigations revealed that Jaitley was not the only victim; others’ call logs had also been accessed: Lalit Modi; BJP leaders Sudhanshu Mittal, Nitin Gadkari and Vijay Goel; and a couple of businessmen, including Nitin Shah and Vivek Nagpal.

Delhi Police zeroed in on one Anurag Singh as the culprit behind this espionage. Strangely, Singh is said to be close to Nagpal, who Lalit Modi recently accused of being a hawala operator close to President Pranab Mukherjee’s Secretary Omita Paul. Modi also uploaded documents which allegedly show Nagpal’s many offshore accounts.

Meanwhile, the BCCI, which works like a secret society and routinely faces allegations of massive corruption, remains largely untouched by the scandal.

Lalit Modi is well-known to anyone in Jaipur who dealt with the government during Vasundhara’s stint as chief minister. Insiders say the tycoon operated from a suite in the Rambagh Palace hotel, working closely with the Maharani, as Raje is known in political circles.

He was so close to the Rajasthan Chief Minister that he voluntarily picked up an 8 per cent stake for 7.8 crore and lent another 3.8 crore to Niyant Heritage Hotels, a company owned by Dushyant Singh, a Jhalawar MP and Raje’s son. According to the Congress, this was not a business deal but payback for money Modi had collected in lieu of contracts. Congress Party Leader Sachin Pilot also alleged that Modi received another `20 crore through Mauritius. The finance ministry is investigating this allegation, even as the opposition continues to bay for Vasundhara’s blood, asking the BJP to sack her. The Congress has also alleged that Dholpur Palace, one of the properties run by Niyant heritage as a hotel, is owned by the government, and that it is illegally occupied by Dushyant and Modi’s company.

Interestingly, the tweets by an audacious Modi have set off an internal war within the BJP. While Prime Minister Narendra Modi may be happy that Swaraj and Raje, two of his detractors within the BJP, have been badly hurt, he may find it difficult to explain their conduct once parliament convenes for the monsoon session.