Demonetisation: Last fortnight, over 30 times surge in Jan Dhan deposits; maximum from Bengal and Karnataka

 The Indian Express 24 November 2016

Pradhan Mantri Jan Dhan Yojana accounts have seen deposits surge almost 30 times by around Rs 21,000 crore in just 14 days since the government’s November 8 announcement on the withdrawal of high-denomination currency notes, government sources said on Wednesday.

According to these estimates, the average weekly deposits in these accounts rose by 3,200 per cent in the two weeks since November 9. Between March 31 and November 9 this year, the weekly deposit average in Jan Dhan accounts was Rs 311 crore, which increased to Rs 10,500 crore in the past two weeks. In effect, it should have taken roughly a year for banks to get the amount of deposits that came in during the past fortnight.

While the amount of deposits that came into accounts in West Bengal and Karnataka — two states, government sources said, have shown a record surge — over the last 14 days was not known, according to latest data updated until November 9, West Bengal had the second highest amount of deposits of Rs 6286.65 crore in Jan Dhan accounts.

Uttar Pradesh topped the deposit list with Rs 7493.50 crore of funds in these accounts and 22.87 per cent zero balance accounts. Karnataka had deposits of Rs 1456.96 crore in Jan Dhan accounts as on November 9. State-wise details beyond November 9 are awaited.

Since the launch of Jan Dhan in August 2014, total deposits into these accounts were Rs 45,636.61 crore as on November 9, 2016 — the day the government’s currency withdrawal decision kicked in. Total deposits in Jan Dhan accounts jumped to Rs 66,636 crore as on November 22.

With less than 10 per cent share in the Jan Dhan network — 2.44 crore out of 25.51 crore accounts — West Bengal already accounted for nearly 14 per cent of the scheme’s total deposits. The average balance in Jan Dhan accounts in West Bengal at Rs 2577.83 was also the third highest among the major states after Punjab (Rs 3400.88) and Haryana (Rs 3084). 

The Finance Ministry, officials said, is monitoring the sudden surge into these accounts with some officials saying black money operators could be using these accounts to convert their funds. Jan Dhan accounts have a deposit cap of Rs 50,000 per account. As of November 9, the national average balance in a Jan Dhan account was Rs 1788.85 and the percentage and 23.27% of these accounts were zero-balance accounts.

The Reserve Bank of India had in May warned that these accounts are vulnerable to fraud and identity theft with miscreants using others’ accounts to convert their illegal wealth. Sources said the finance ministry has advised banks to ensure that the Jan Dhan accounts strictly comply with the KYC (know your customer) norms.

Finance Minister Arun Jaitley said last week that the government was looking into sudden “popping up” of money into zero-balance Jan Dhan accounts. “We are getting some complaints that suddenly monies have popped up in the Jan Dhan accounts, so there is a misuse and that is why the rationing in initial days takes place,” he had said.

Panama Papers: Top arms dealer and son linked to offshore firms in Panama, BVI, Seychelles

The Indian Express 14 October 2016 

London-based arms agent Sudhir Choudhrie and his family members are beneficiaries of a Panamanian foundation set up in 2004. Records of Mossack Fonseca — the law firm whose data was mined for the Panama Papers investigation — show that Choudhrie’s elder son Bhanu is director in two British Virgin Islands (BVI) companies since 2002. He is also named as director and shareholder of two Seychelles companies formed in 2007.

In 2006, Sudhir Choudhrie shifted base from Delhi to London after his name figured in CBI probes into the contract to upgrade 130-mm field guns and the Barak missile deal. In 2002, Bhanu Choudhrie set up C&C Alpha Group, a family-owned private equity firm, in UK. Subsequently, both Sudhir and Bhanu became UK citizens.

According to MF records, Bhanu Choudhrie and his younger brother Dhairya are equal beneficiaries of Stellar International Art Foundation (Panama). In their absence, their respective families — wife and children — and parents Sudhir and Anita Choudhrie are named as equal beneficiaries, failing which the assets would go to Path2Success, the Choudhrie family charity in UK.

The Panamanian foundation was set up in August 2004 as Stellar International Foundation and renamed Stellar International Art Foundation in February 2008.

To help the foundation open a bank account in 2014, MF’s Geneva office conducted an investigation at the Panamanian courts as the foundation’s resident agent and certified that there was no move to wind it up.

According to media releases, Stellar International Art Foundation owns over 600 rare works of renowned artists including M F Husain, Paresh Maity, Anish Kapoor, Pablo Picasso, Pierre-Auguste Renoir and Andy Warhol.

In December 2002, MF records show, Bhanu Choudhrie became director of Noversa Limited and Anterna Limited, two companies incorporated in BVI in October 2002. He was also appointed director in Cottage Consultants Limited on January 5, 2007, the day the company was incorporated in Seychelles, and held shares of Carter Consultants Inc, another Seychelles company set up in January 2007.

Noversa Limited was renamed Belinea Services Ltd in April 2007 and Dubai-based businessman Aman Chopra joined Bhanu in the board of directors in May 2010. Hollister Consulting Inc, a company registered in Seychelles in August 2008, is the sole shareholder of Belinea Services. In 2009, Aman Chopra held the shares of Hollister Consulting Inc.

Sumant Kapur, executive director of C&C Alpha Group, was appointed director of Anterna Limited in October 2006. Kapur was replaced by Aman Chopra in May 2010 but internal documents of MF recorded Sumant Kapur as the holder of the company’s bearer shares in 2011. Sumant Kapur is the son of Sudhir Choudhrie’s uncle B K Kapur, who retired as chairman of Hindustan Aeronautics Limited (HAL), a public sector undertaking.

In 2010, Aman Chopra and wife Ayesha hosted M F Husain and his limited edition imprint exhibition at Dubai’s Capital Club.

Chopra, show MF records, was also director and shareholder of four Seychelles companies — Caprol SA, Cottage Consultants Ltd, Frith Properties Ltd and Prototype Services Inc. While Prototype Services and Cottage Consultants were set up in January 2007, Caprol and Frith Properties came up in August 2008. All four companies were struck off on December 31, 2012.

Multiple emails and phone calls to Sudhir and Bhanu Choudhrie did not elicit any response. Aman Chopra refused to comment.

In 2011, after the CBI gave a “clean chit’’ to Sudhir Choudhrie in the Rs 208-crore deal between Israeli firm Soltam and the Ministry of Defence, the Enforcement Directorate commenced a probe into financial transactions of the deal but did not find any evidence of FEMA violation. The CBI closed the case in the Barak missile deal in 2013.

In 2014, both Sudhir and Bhanu Choudhrie were arrested as part of a Serious Fraud Office probe in London for allegedly helping Rolls-Royce pay bribe to secure contracts in China and Indonesia but the case against them was subsequently dropped.

The Ministry of Defence also ordered a CBI inquiry into the purchase of aero engines by HAL from Rolls-Royce. In 2015, Choudhries’ C&C Alpha Group sold its hospital chain Alpha Hospitals to Cygnet Health Care for about Rs 970 crore as part of a move to focus on India where Bhanu Choudhrie is emerging as a major player in the health care and hospitality sectors.