Cash transaction reports on 2G issue under scrutiny

Investigating agencies probing alleged financial irregularities in the 2G spectrum allocation have now ordered scrutiny of all "cash transaction reports" related to the funding of payments by telecom players.

Last Updated: Dec 30, 2010, 18:26 PM IST

New Delhi: Investigating agencies probing
alleged financial irregularities in the 2G spectrum allocation
have now ordered scrutiny of all "cash transaction reports"
related to the funding of payments by telecom players, banks
and individuals involved in the grant of licenses.

The probe monitored by the Supreme Court is being
undertaken by the CBI, ED and the Income Tax department and
according to sources, the agencies have asked for Cash
Transaction Reports (CTRs) from various financial intelligence
units under the Finance Ministry.

The agencies have sought two kinds of CTRs-- "all
cash transactions of the value of more than rupees ten lakhs
or its equivalent in foreign currency and all series of cash
transactions integrally connected to each other which have
been valued below rupees ten lakhs or its equivalent in
foreign currency", to specifically probe charges and instances
of corruption, tax evasion and money laundering, sources said.

The reports pertain to the period of 2007-08, while
some of them may date back to earlier years as the apex court
had widened the probe of the telecom policy from 2001 to 2008
covering both the NDA and the UPA regimes.

In view of the deadline of February 10 next year, the
date by when the apex court has asked the agencies to submit a
status report, the probe agencies have asked for all such
CTRs to expedite their probe.

According to sources, the Financial Intelligence Unit
(FIU) and the intelligence unit of the Income Tax department
are in possession of such cash reports, in the form of CTRs
and Annual Information Returns (AIRs) respectively which they
receive from various banks, financial institutions and
filing of tax returns.

"The scrunity and analysis of CTRs will help agencies
establish the money trail to and from the country and about
funds routed through tax havens abroad," sources said.

All the three agencies involved in the 2G probe have
signed a Memorandum of Understanding with the FIU recently to
obtain a "seamless and real time" data of CTRs and also
Suspicious Transaction Reports (STRs) to probe cases in their
domains.

Sources involved in the probe said that since India
recently became a full member of the global anti-money
laundering and counter terror financing body-- the Financial
Action Task Force (FATF)-- the essential recommendation of
maintaining and using the CTRs database "to support the fight
against corruption" is being followed in spirit in the 2G case
as it involved a huge flow of money.

The Supreme Court had said the investigation should
also cover huge loans given by public sector banks. If DoT
officials were signatory to the licence agreements, the CTRs
in this regard will also be scrutinised, sources said.

"The issue raised in the case is not limited to only
Rs 1.76 lakh crore but has a much wider compass. We would not
like to prejudice the probe. But what happened in 2001 needs
to be looked into. It is for the CBI to investigate and find
out," the Supreme Court bench had observed on December 16.

Former Telecom Minister A Raja`s counsel T R
Andhyarujina, in his arguments, had maintained that his client
had only been following up the 2001 policy initiated by his
predecessors.

The court had also expressed surprise over public
sector banks providing loans to the tune of Rs 10,000 crores
to the 2G spectrum licensees on the basis of hypothecation of
their respective licenses.

PTI