IT seizures reveal payment of Rs. 2,400 crore in kickbacks

The Income Tax Department has unearthed documents that expose an alleged nexus between a major supplier of food items for Tamil Nadu’s flagship noon meal scheme and politicians, bureaucrats and their associates.

Analysis of electronic storage devices and documents seized from the premises of Tiruchengode-based Christy Friedgram Industry, its employees and others in July has revealed payment of kickbacks to the tune of Rs. 2,400 crore to top politicians, senior bureaucrats and their family members in recent years.

Highly placed sources told The Hindu on Thursday that the investigating wing of the Income Tax Department had started issuing summons to the suspected beneficiaries. Christy Friedgram Industry is a supplier of items like weaning food, pulses and palm oil for the noon meal programme and other welfare schemes of the Social Welfare Department.

“The documents that we have seized include the book of accounts for many years that show payments made to politicians, bureaucrats and others, mostly in code, over a period of time. In a few cases, the names of the family members of bureaucrats who held key posts figured in the list of beneficiaries. Payments to the tune of a few crores of rupees were made to each beneficiary through online bank transfers. The rough estimate of the kickbacks works out to Rs. 2,400 crore,” a top investigator, who preferred not to be named, said.

Suspects summoned

After an offence was prima facie established, the IT department began issuing summons to suspects. The reason why the firm made payments to the politicians and bureaucrats is under investigation. However, preliminary enquiries revealed that the bureaucrats concerned were either in charge of placing orders or sanctioning bills. The investigating wing will soon write to the Tamil Nadu government and other Central agencies, sharing details of the scam, for appropriate action at their end, the official added.

Besides alleged tax evasion to the tune of a few hundreds of crores of rupees, investigators claimed that the company allegedly suppressed actual revenues while filing tax returns, with the intention of evading tax. It also furnished contradictory documents while seeking loans from a nationalised bank in Namakkal, the sources said.

“Searches conducted at the residence of an IAS officer whose involvement in the scam was suspected has also yielded incriminating documents. Some of the files seized during the raids were classified documents of the Tamil Nadu government, which could not have leaked without the connivance of senior bureaucrats,” the official said and added that the contractor had been blacklisted in Karnataka, and a case initiated against the firm by the Lok Ayukta was pending before the Supreme Court.