The CID wing of Karnataka police is gearing to file a chargesheet in the infamous BDA mutual fund scam against senior Indian Audit and Accounts Service (IAAS) officer and former senior Coffee Board officer Sharada Subramaniam and her husband Sandeep Dash, another IAAS officer who was formerly heading the finance wing of Bangalore Development Authority ( BDA) for their alleged involvement in the scam. The bureaucrat couple will be charged for embezzlement and diversion of government funds from Coffee Board to invest in private mutual funds and afer suffering losses diverting funds from BDA to cover up the deficit amount. The CID has also framed similar charges against eight others involved in the scam with a total of around Rs 2,200 crore involving five former BDA officials and two private bank managers.
According to the chargesheet to be filed in the case, Sharada Subramaniam was the Coffee Board’s director from 1998 to 2003 when her husband Sandeep Dash was heading the finance wing of BDA (1997 - 2005). The couple allegedly invested funds from the Coffee Board through brokers in the mutual fund market and also managed to earn good commission before the market tanked. The investigators have claimed that a sum of Rs 4.04 crore of government money was invested in mutual funds by Subramaniam after taking the money from BDA, and again another Rs 1 crore was routed to the Coffee Board account. The Rs 4.04 crore was given back to BDA, but to fill-up the losses suffered due to a dip in the market, she used the BDA money of Rs 1 crore.
According to the special audit, in two transactions, the husband-wife team allegedly connived to transfer out money from BDA’s accounts to Coffee Board’s accounts and then on to Zurich Mutual Funds. The modus-operandi was: Two current accounts were opened in the name of Coffee Board in Indian Overseas Bank, Kumarapark branch where BDA’s accounts were held in 2001 and 2002. The Coffee Board accounts were opened, operated and closed within two years in the same bank branch, with a clear intent to facilitate the circular transactions. Account number ****1541 was opened in November 2001 and closed in December 2002, while ****5068 was opened in November 2001 and closed in May 2003. In 2002, in two transactions, Rs 4.04 crore and Rs 1 crore were transferred from BDA’s accounts to account nos. 1541 and 5068 in the Kumarapark branch of IOB, allegedly on Dash’s instructions. Subsequently, the money was channelised into private equities; a banker’s cheque was issued by the bank in November 2002 in favour of Zurich Mutual Fund (which later got merged with HDFC). The returns on this investment were credited into the Coffee Board’s director finance account held by Subramaniam. Since these two accounts in IOB were fake, the returns apparently accrued to the couple.
Overall, with just these two illegal transfer of funds, BDA suffered a loss of interest and capital to a tune of Rs 3.6 crore. The CID sleuths who were investigating the BDA scam took up the issue and started the investigation. “We have arrested all connected to the scam other than Subramaniam,” a senior police officer from CID said.
Subramaniam has been booked under Indian Penal Code (IPC) sections 409 and 420, cheating and misappropriation which carry a maximum punishment of 7 years jail and also booked under Section 13 of The Prevention of Corruption Act.