Outgoing finance secretary wrote to Arun Jaitley, ‘Revenue dept made blatant attempt to help scam accused’ Jignesh Shah


Central government had made a blatant attempt to help a scam accused, reveals a note written by the Union Home Secretary, Rajiv Mehrishi, who held the Finance Secretary post until recently.

Mehrishi, who refused an extension as finance secretary, wrote to his former boss, Arun Jaitley, reminding him how the Department of Revenue had launched a “blatant attempt” to help “Shri Jignesh Shah at the cost of the investors who have been cheated in the NSEL scam.”

According to a report in Indian Express, Mehrishi’s note showed that the “internal view” of DoR was not discussed in the coordination meeting.

“It will be extremely embarrassing for the Government, specially the FM (Jaitley), as what he is doing as Minister of Company Affairs is sought to be negated by his own department in the Ministry of Finance,” Mehrishi wrote.

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“Mr Jignesh Shah has been knocking the doors of various courts stopping/delaying this amalgamation. FM (Jaitley) is aware that the entire might of the Government has been put behind ensuring that Shri Jignesh Shah does not get any relief on this account from the courts — so much so that Government has even deputed Solicitor General once to fight the case,” Mehrishi wrote.

The Department of Revenue note could cause “serious damage” to the Government’s case, warned Mehrishi. For, there can be “little doubt,” he added, that Shah would procure a copy of it under the RTI Act and “will get a fillip to his case for not merging the entities on the ground that even the Ministry of Finance is opposing it.” Even the CBI could make it a part of its ongoing investigation, Mehrishi wrote.

In July 2013, the NSEL, where 99 percent stake is owned by Shah-owned Financial Technologies India Ltd (FTIL)defaulted on the payment of Rs 5,600 crore to investors. Shah and his associates claim they were unaware of the goings-on at NSEL. The scam is currently being investigated by the CBI.

The CBI, which launched its investigation in 2013, brought in the Prevention of Corruption Act, too, for alleged loss of Rs 220 crore and Rs 120 crore respectively to the government through PSUs Metals and Mineral Trading Corporation and Project and Equipment Company.

It also investigated alleged oversight and lapses of officials in market regulator Securities and Exchange Board of India (SEBI) and the Forward Markets Commission, the chief regulator of commodity futures. Late last month, SEBI and FMC merged.

Mehrishi’s note, dated August 26, 2015, referred to a Department of Revenue (DoR) note to the Department of Company Affairs advising against the merger. That note, approved by then Revenue Secretary Shaktikant Das, argued that Enforcement Directorate was of the view that the merger would help Jignesh Shah, hence DCA should not press ahead with the merger. The note also mentioned that the matter was sub judice in Bombay High Court.

It was almost a year ago, on October 21, 2014, that the Ministry of Company Affairs — under Jaitley — had proposed to forcibly amalgamate NSEL and FTIL after it defaulted on contract obligations worth Rs 5,600 crore in July 2013.

Jaitley and Mehrishi have yet to comment on this new revelation.


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