rediff.com: ED files chargesheet against 6 former ITC officials

The Enforcement Directorate on Friday filed chargesheet against six former officials of tobacco major, ITC Limited, for alleged violation of Foreign Exchange Regulation Act, but discharged four others including former chairmen, J N Sapru and K L Chugh.

The chargesheet was filed before the chief metropolitan magistrate in Kolkata under Sections 8 and 9 of FERA for illegally acquiring and transferring foreign exchange without the permission of the Reserve Bank of India or any other competent authority of the Government of India.

The ED had originally named ten top officials of ITC Limited in the case, but chargesheeted only six on Friday, the last day for filing under FERA, which has been replaced by Foreign Exchange Management Act.

Former finance director Saurabh Mishra and another top official P K Talwar were also discharged.

A K Tewary, the special public prosecutor appearing on behalf of ED, said the chargesheet was filed against former directors G K P Reddy, R K Kutty and R P Agarwal and top officials E Ravindranathan, N Laxminarayanan and M B Rao.

The officials were liable to be prosecuted under Section 56 of FERA which provides for up to six years of imprisonment and fine of at least five times the amount violated.

Tewary said that the chargesheet was filed after sanction by the ED headquarters in New Delhi.

FERA was repealed in June 2000 following the introduction of FEMA, but the directorate was allowed to file chargesheets under the 'sunset clause' till May 31, 2002, for the offences committed before June 2000.

The FERA violation case against ITC amounting to over Rs 7 billion dates back to 1996 when the ED started an investigation into the export transactions between the ITC and the Chitalia Group of companies in the United States during 1990 to 1995.

The directorate carried out a massive countrywide search and seizure operation at all ITC establishments, including its headquarter in Kolkata, Virginia House.

Subsequently, several top officials of the company including Chugh and Sapru were put through severe grilling by ED officials and were subsequently arrested.

The chargesheet filed on Friday mainly pertains to the original allegation that the ITC's International Business Division or IBD had violated the provisions of FERA while dealing with the Chitalias.



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