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Anti-black money dept left toothless



As reported by Pradeep Thakur in timesofindia.indiatimes.com on 29 April 2013:

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Anti-black money dept left toothless


Govt Winds Up Directorate Of Criminal Investigation; Last Raid Was In 2012


New Delhi: A year after the UPA presented a white paper on black money in the Parliament, spelling out a strategy to curb generation of illicit money and preventing its offshore flight, one of the most potent weapons created to tackle the menace and bring offenders to book — the income tax department’s directorate of criminal investigation (DCI) — stands dismantled and powerless.


The last search-and-survey operation, better known as I-T raids, conducted by the DCI was on March 30, 2012 — almost two months before then finance minister Pranab Mukherjee presented the white paper and assured Parliament that the government had set up requisite institutions to weed out black money.


The DCI’s last raid, carried out against United Stock Exchange, a privately-held company allegedly engaged in money laundering activities, had unearthed fictitious transactions of more than Rs 400 crore.


Earlier, there was another probe into Indians holding accounts in HSBC Bank, Geneva, in which the DCI had questioned some industrialists and put on notice some Cabinet ministers and other politicians after their linkages came to light during the course of investigation, though the government later denied in the Parliament that the DCI had unearthed any transactions related to MPs. The probe had started against these high-profile individuals after information about Indians’ deposits in HSBC Bank, Geneva, was shared by France.


Soon, the HSBC investigation was taken away from the DCI and distributed to different directors-general of I-T investigation units in different cities with no single directorate aware of all the cases. The probe, thereafter, was directly supervised by finance ministry officials.


Within two months of the UPA’s assurance to the Lok Sabha, the government had started dismantling the DCI by first shifting out its director-general, a woman IRS officer M Sailo, who was given additional charge of I-T Intelligence and the freedom to bring in officers of her choice to shape the agency as per its mandate.


As per the charter, besides investigative units placed at different locations, the DCI was mandated to raise a fullyarmed unit equipped with trained manpower and weapons and infrastructure to deal with white-collar criminals and terrorists on land, sea and in air.


But within months of the DG’s transfer in June 2012, all her team members, directors and additional directors were given marching orders, and by the year-end, DCI had a completely new set-up. Sailo was shifted as chief commissioner to look into manpower issues of the I-T department, while some of her juniors were shunted to the audit section and in I-T appellate tribunals.


With a new DG in place, the government took away the DCI’s exclusive mandate to investigate foreign bank accounts of Indians and the agency was no longer responsible for carrying out searchand-survey operations. The probe against account-holders of HSBC Bank, Geneva, was also taken away from the agency and it was asked not to meddle with other probes. There was no formal communication to this effect though.


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