A game of numbers

A game of numbers
Kota Neelima

It's a scam whose numbers run into crores and whose key players have managed to stay one step ahead of investigating authorities. KOTA NEELIMA digs into the case files of the Mesco scamThe afternoon was balmy in Tis Hazari. It threatened to get hotter with the case of the managing director of Mesco group Rita Singh listed with the Chief Metropolitan Magistrate (CMM). A scam that is unofficially estimated to run into at least Rs 300 crore, the Mesco case has managed to stay in the reckoning with every step of progress by the CBI.

While there are other accused in the case, the limelight is usually hogged by Rita Singh, who had also made a foray into politics by contesting for the Lok Sabha from Ghaziabad, Uttar Pradesh, on a Congress party ticket. She has always added colour to the pictures of the patiently waiting photographers. She did so even on Wednesday, in a deep pink saree and toned down make-up.

Singh looked calm, composed but preoccupied. Her defense counsel explained why. ``What is the CBI going to do? Why have they denied her basic amenities like a fan? This is almost torture, especially in this weather,'' senior advocate Harish Gulati told the court.

The CBI special prosecutor U.S. Prasad pointed out, ``We want to interrogate her in view of some new facts that we have uncovered.''

The CMM has extended Singh's police custody till July 7. It is interesting that the investigation, which has been going on for two years, has not given the CBI enough evidence to chargesheet the accused.

The FIR was filed by CBI on August 10, 1998 against the chairman of the company J.K. Singh, managing director and his wife, Rita Singh and his nephew and financial controller, Deepak Singh. They were accused of cheating banks, insurance companies, financial institutions as well as shareholders of several crores of rupees.

The FIR alleges that ``during the period 1992 to 1997 J.K. Singh and other accused persons were parties to a criminal conspiracy with an object to cheat insurance company/banks, financial institutions, share holders and others by misrepresentation of facts, forgery, falsification of accounts to obtain huge benefits for themselves/others...''

Rita, J.K and Deepak have all been arrested and remanded to police custody in May. The CBI has also alleged in the FIR filed in August 10, 1998, that J.K. Singh's company Mideast India Limited had submitted a false no-objection certificate to United India Insurance Company while filing for a claim amounting to Rs 12 crore.

The CBI has accused Mideast India Limited of not only issuing over 27 lakh fake share certificates, but also pledging them as security at Banque Nationale de Paris, Bank of Baroda, Federal Bank, Small Industries Development Bank of India and Bank of Madura for availing the loans.

J.K. Singh and Deepak were arrested, according to the CBI counsel, to be quizzed in connection with a company called Mesco Mauritius Limited. The CBI counsel told the court that the agency wanted to verify the incriminating documents seized from the accused and identify the printer of the fake share certificates.

Besides this case, the CBI had also registered a criminal case against six persons, including J.K. Singh and Rita Singh, who allegedly conspired with three senior officials of the National Airports Authority (now the Airports Authority of India) to get prime land and hanger space at the Juhu airport in Mumbai at a throwaway price in 1992-93.

The land was leased out to Mesco Airlines in 1992-93 for constructing a hanger and workshop at just about one-third of the prevailing market prices, thereby causing a substantial loss to the authority. In addition, the three officers have been accused of violating the established norms by leasing out land without prior clearance from the management.

Earlier an internal inquiry by the chief vigilance officer pointed to the ``serious irregularities and undue favours'' had put the loss at nearly Rs 4 crore. In its FIR (number RC.11(A)/97), the investigating agency has said that the hanger space at Juhu Airport was given to Mesco Airlines when it requested the NAA chairman on September 30, 1993, ``for space to house its two helicopters''. Responding the very same day, the airport authority agreed to give nearly 300 square metres of land to Mesco on an ad hoc basis for a month for Rs 50,000.

The company was told to vacate the hanger space after a month, failing which the authority would double the charges. ``However, the airline failed to vacate the hanger after the stipulated one month period and continued to occupy it illegally,'' says the report.

Instead of doubling the charges, the accused issued instructions to revise the monthly licence fee from Rs 50,000 to Rs 24,200 from April 1993. The airline continues to occupy the hanger space even today.

Mesco Airlines Limited has a fleet comprising Hillers, Dauphins and Russian Mi-172 helicopters which are used for contract work for state governments and PSUs.

Probing other allegations, in February this year, raids were conducted by the Income Tax department on the Mesco group of companies, which includes Mideast India, Mesco Airlines, Mesco Kalinga Stell and Mesco Pharmaceuticals. Raids were conducted on the company's offices in Noida, Ghaziabad, Chennai, Bangalore, Bhubaneshwar and Hyderabad.

Residence and farmhouse of J.K. Singh and Rita Singh were also raided.

The Mesco group had raised a huge amount of money through public issues, but several of their projects are languishing. The groups' flagship company, Mideast (India), has been in default for payments of dividends, loans, lease rentals and fixed deposits. Mideast (India) is also into the manufacture of leather footwear, leather garments and other products, and makes the Mesco brand of shoes.

Earlier, the Mesco group put on hold Mesco Kalinga Steel's Rs 3,000 crore steel project which was set up in Orissa.

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