By contrast, when news of the alleged FERA violations of the ITC group broke out which were eventually believed to be around $170 million the ministry and the enforcement directorate (ED) went into over-drive and arrested top executives such as K L Chugh and J N Sapru.

The RBI, in fact, told the ministry a few months ago, that while the Taj had said that it was having difficulties in repatriating the funds, they (the RBI) did not have the ability to ascertain whether these reasons were genuine. This, the RBI said, could be done only by an investigative agency.

The RBI's reply is part of a ten-month old on-going correspondence with the Central Economic Intelligence Bureau on thesubject. The CEIB is part of the ministry of finance. The deals, and the forex involved, pertain to several overseas ventures of the group, particularly those relating to setting up of hotel projects, and subsidiaries set up for this purpose. It is alleged that, in several cases, the Taj took the RBI's permission to repatriate funds for investments abroad, but did not either bring this back, or pay dividends on the same.

The RBI was also asked whether it was aware of the fact that Indian Hotels had a subsidiary called Shamiana Foods. Shamiana Foods in the US is the company that has been receiving the management fee for the George Town Marbury Hotel that is run by the Taj. Normally, it would be expected that the management fee would have accrued to the Taj International which is the company through which the Taj operates abroad. The RBI was also asked to provide information on the Jana Corporation through which a large part of Taj's international operations are controlled. The Jana Corporation, in fact, hasbeen paying the interest on bank loans taken from the Syndicate Bank by the St James Court Hotel in London which is run by the Taj. Interestingly, the issue of FERA violations was also brought up by group chairman Ratan Tata in August, in a letter to the then chief of the Taj, A.B. Kerkar. Tata had even alleged that Kerkar had taken advance-rent deposits from two airlines for office space at the Taj in Mumbai and had not brought this back into the country. A GDR issue by group company Oriental Hotels was another area in which Tata alleged that there were FERA violations.

Despite the well-publicised slanging by the two sides in which various details came to light, however, no investigating agency has thought it worth their while to take matters to their logical conclusion. By contrast, it took just a few newspaper reports about irregularities found in ITC's accounts by its auditors' Coopers and Lybrand towards the end of 1995, to get the investigative agencies to act.