Man in Naxal belt 'received' millions in Hong Kong through Bank of Baroda

The transfer of over Rs 6,000 crore to Hong Kong through a single Delhi-based branch of Bank of Baroda has benami actors not just in India, but spread across the globe. Documents accessed by dna show that the web of money spins from a naxal town of Jharkhand to the bylanes of Nangloi in West Delhi to South Korean passport holders operating out of Mexico city to Nepalese citizens and residents of Hong Kong itself.

The CBI had earlier found that the addresses of 59 companies – that have current account with the Bank of Baroda's Delhi branch and through which close to a billion dollars were transferred to Hong Kong-based companies – were fake. One of the companies to which money was sent was Star Exim Limited. The money, which ran into several thousands of dollars, was meant for the import of rice and cashew to India. These were in reality never imported nor any invoices generated that proved the conduct of any tangible trade.

Star Exim Limited has its address registered in one of the upscale suites in the famous Tsim Sha Tsui locality of Hong Kong's famous Kowloon urban area. This bustling commercial and residential area is one of Hong Kong's hottest tourist spots. But guess what? The owner of this company is a relatively obscure man who lives in the naxal-affected West Singhbhum district of Jharkhand.

Om Prakash Rungta, to whom millions of dollars were remitted in a space of a few months during 2014-15 mentions his address as Madhu Road in the mining town of Chaibasa in Jharkhand's West Singhbhum district. Rungta's address in records is the same as Fulchand Sanwarmall – a small coal trading company based in Chaibasa.

Far from the glitz, glamour and high finance of Hong Kong's Kowloon area, Chaibasa is a mining outpost in an Indian district notorious for its rogue miners and naxal violence. While Tsim Sha Tsui counts among the world's heavily populated and exorbitantly priced property markets, Chaibasa is a town synonymous with what the Justice MB Shah Commission on iron ore mining called the 'great Indian loot' – an area where some of India's biggest corporate houses have been accused of illegally extracting iron ore worth Rs 14,500 crore.

Star Exim itself was incorporated in Hong Kong on August 1, 2014. This coincides with the start of the dubious high-value money transfers from the Bank of Baroda branch. Bank of Baroda in its internal audit report mentions that most of the transactions, totaling over Rs 6,000 crore, started on the same date as Star Exim was incorporated in Hong Kong, and continued for another year till August 12, 2015. The company had no business transactions to show in its books and was incorporated with a paid-up capital of $HK 10,000 (equivalent to around Rs 85,000).

Before Chaibasa-based Rungta came to completely own Star Exim, to which millions of dollars were illegally transferred, another man by the name of Saurabh Modi was in charge. When the company was incorporated on August 1, 2014, Modi held all the 10,000 shares in the company. On August 14, 2014, Modi, mentioned as a West Bengal-based merchant in the documents, transferred all the shares in Rungta's name and quit the company. dna tried to trace Modi in Bardhaman but could not do so.

Meanwhile, there seems to be no doubt about the fact that Chaibasa-based Rungta was no more than a fake front – a benami in whose name a Hong Kong-based company was formed and millions of dollars transferred through the Delhi-based Bank of Baroda branch.

Given the swanky Hong Kong address, Star Exim had no business activity to show even as its stated business purpose at the time of incorporation was to trade in goods in services.

The plot further thickens when moving from the 'benami' Rungta in Jharkhand to his company Star Exim's address in Hong Kong. Sitting at Star Exim's Hong Kong address – Suite 1101, 11F, Supreme House, 2A Hart Avenue, Tsim Sha Tsui, Kowloon – is another Rungta. But this man's name is Ashok Kumar Rungta. At the address is Ashok Kumar Rungta's company, Krsna Group Limited. This company claims to be a 'one-stop shop' for providing services ranging from arranging trade finance, tax advisory and helping companies set up base in Hong Kong and other offshore jurisdictions.

Krsna Group Limited counts among others its business partners as various 'Indian and Chinese banks'. When contacted, Hong Kong-based Rungta did not clarify whether he was related in any way to Jharkhand-based Rungta. He said, "I am not involved in India in any way. I am a resident of Hong Kong and my business is completely based out of here.'

Bank of Baroda's internal audit found that none of the fake Delhi companies that remitted huge sums of money to Star Exim ever did any real business. Bank of Baroda has found that none of its officers ever obtained credit reports from Star Exim or other Hong Kong companies despite advance payments being routed for 'imports of rice and cashew'.

CBI investigators refused to comment on how they are likely to question persons in naxal-dominated areas, in whose name transactions have been done. With the money trail starting from the mining belt and naxal zones of India and ending in Hong Kong after passing through Delhi, CBI officers say their primary task is to not just probe the trail but also the persons or corporations to which the money sent to Hong Kong belonged.

The controversy has also acquired political colours with the BJP accusing the Congress of raking up the scam to deliberately malign Bank of Baroda. It feels the Congress is accenting on the bank's role rather than the businesspersons who sent the money abroad. The Congress, meanwhile, has claimed credit for bringing the bank's internal audit into focus. Congress leader Kapil Sibal said, "Even after the bank's audit unraveled the scam, the finance ministry slept over the episode and did not order an investigation. What connections do these accounts have to the BJP? Will Modi, Jaitley and Amit Shah explain?"