How is my story connected to the 2G Telecom scam that hit the UPA government so hard that it got thrown out of power? Well, only indirectly. I am penning whatever I know, just to show how deep the rot is and why there are more than one reasons for Deloitte to bury this matter.
As I mentioned in the first post on this blog, Deloitte acquired the tax practice of BMR in 2017. Mr. Mukesh Butani was one of the founding partners of BMR — he was the ‘M’ of BMR. He is a stalwart in the tax fraternity in India and globally. He is a rock star with immense influence in the Finance Ministry. He has always been very close to the finance ministers P. Chidambaram and Arun Jaitley. So much so that Chidambaram and Jaitley have regularly consulted with him on various policies when they were FMs and he has been able to influence the country’s tax policy. Chidambaram and Jaitley have also extended many personal favours to him and many tax officers and officers in agencies like DRI, SFIO and ED also know how influential he is.
Around 2010 or so there were several damaging allegations by a shareholder of NDTV Mr. Sanjay Dutt and a tax officer Mr. S. K. Srivastava against NDTV and Mr. Prannoy Roy for tax evasion and money laundering in an investment deal with GE. The crux of this scandal was that the GE’s had made a substantial investment in NDTV through a web of shell companies in Netherlands, UK and Mauritius, and this investment was made at an abnormally high valuation. After a year or so, GE wrote off this investment. The allegation was that this investment was a sham transaction and was done to pay kickbacks to Mr. P. Chidambaram in the 2G scam.
Initially this matter was being handled by PwC, with its partner Mr. Vivek Mehra (Actress Neena Gupta’s husband) leading this engagement. However, PwC messed up and its communication with NDTV was also leaked, causing much more damage.
After the fiasco done by PwC and Mr. Vivek Mehra in handling the NDTV matter, Mr. Prannoy Roy approached Mr. Mukesh Butani around 2012 or so to help him manage the situation. Another reason for Mr. Roy to approach Mr. Butani was that he had also helped Mr. Raghav Bahl of TV18 create a complex structure to evade tax and mover illicit funds.
Initially Mr. Butani worked on setting the house on order qua the GE’s investment in NDTV, and this became a very intense engagement in 2014 when Mr. Roy feared that things could get nasty for him after the change of the government. This was a super confidential project at BMR and not many employees were involved. Mr. Roy specifically asked Mr. Butani to mostly use female associates for this project as he possibly believes that women can get a lot done in the tax office, and also because it was their strategy to implicate the tax officer Mr. S. K. Srivastava in sexual harassment cases, if the need ever arose. Mr. Butani deputed Parul Jain, who was in her mid thirties at that time and had recently been promoted to partnership, for this project. Another reason for this was that Parul was a very close and long time friend of Ms. Charu Katyal who then was heading the Anti Money Laundering (AML) team at GE Dubai, and who was the GE point of contact in this exercise.
There was a massive cleanup exercise done in 2015 which included liasoning with certain tax officers. This whole exercise was a very big project and Mr. Butani deployed many sophisticated tricks including creative and sham cross border transactions in tax havens. This was done to hide/legitimize the GE-NDTV transactions done earlier. I am sure that if the investigators do an honest investigation then the paper trail will reveal that an attempt has been made to cover up. But most investigation agencies are always reluctant to rub Mr. Butani the wrong way.
Whatever I have narrated above is based on what I was told by Parul after she joined Deloitte in 2017 (she bragged that Prannoy Roy had invited her to his Cape Town home) and from what has been published in the media about the NDTV scam (there is excellent book NDTV Frauds). To the best of my knowledge the NDTV engagement did not continue after BMR merged with Deloitte, but I may be wrong. In any case, Deloitte can not escape the liability in this matter as the BMR partnership is now part of Deloitte partnership.
Meanwhile, Ms. Charu Katyal who was in GE Dubai (a close friend of Parul) later on quit GE and joined Nissan Motors in Dubai in its compliance department. Around December 2021,when Nissan became aware of her involvement in this scam, it asked her to leave. She subsequently was hired by another well know player in the telecom sector — Nokia, as its compliance officer.