Rs 70 crore scam in book imports unearthed

Imported books at a pavement stall: major fraudThe imported volumes bear impressive titles:Golden Claims, Foreign Exchange in BritainandEurope 1987. Ostensibly, they are educational and scientific publications which can be easily imported under open general licence. But in reality these books are rejected volumes bought at throwaway prices abroad, simplyraddi(waste).Many importers of such books in India quote the cover price less trade discount and get the equivalent in foreign exchange released after paying rupees in cash here. The companies exporting such books are owned by relatives of these importers, so valuable foreign exchange is siphoned out of the country.Since September last year, a series of scams involving a staggering sum exceeding Rs 70 crore have been unearthed by the Enforcement Directorate and the Directorate of Revenue Intelligence. To put this figure in perspective, legitimate imports of books are valued at around Rs 60 crore a year. Hansraj Madhavji Thakkar and Pushpa K. Sitlani, both Bombay-based importers, allegedly masterminded two of the biggest scams, each costing the exchequer about Rs 22 crore.Thakkar floated a proprietorship concern in Singapore in September 1986 and a year later, transferred its ownership to his daughter-in-law Yasmin Mohammed Yunus Walibhoy alias Rupal. This firm used to buy the books and sell them to Thakkar's own firm in Bombay.After Thakkar was arrested on September 7,1988 - he could not explain to whom he had sold imported books worth Rs 22 crore - he was detained under COFEPOSA. On April 20 this year, the Bombay High Court ordered that he be released on bail of a record Rs 50 lakh but later reduced it to Rs 25 lakh on condition that he surrender his passport. Thakkar, however, remained in jail custody. On May 18 he was removed to Breach Candy Hospital where he is now. Sitlani, described in official records as a "high profile socialite", and her relatives control many firms in India and abroad including one in UK called Title Zoom. Following her arrest under COFEPOSA she managed to get a bail in Bombay for Rs 10,000 with the help of lawyer Mahesh Jethmalani. On April 17, Sitlani obtained an interim stay order from Justice Paritosh Kumar Mukherjee of the Calcutta High Court - she falsely claimed she was a resident of Andaman and Nicobar islands so that the case could be heard in Calcutta - restraining the Government from detaining her under COFEPOSA. Books bought from abroad at throwaway prices are over invoiced by quoting the cover price resulting in a major drain of foreign exchange.Satisfied about the "extreme urgency" of the case, the judge waived the requirement of the court having to serve notice on the detaining authorities before issuing the stay order. The stay order was finally vacated by a division bench of the court on July 31. But before that date Sitlani had fled the country violating court directives. Early last month, the Bombay High Court proclaimed Sitlani an absconder.Among other cases which have been detected is that of P.V. Subramaniam and Virendra Mehta of Image Agencies, Madras. The firm imported books which had an invoice value of Rs 3 crore but were sold in India for Rs 4 lakh. Both Subramaniam and Mehta have obtained anticipatory bail.Another case is that of J.S. Manchanda of Bombay. Between 1986-89 Manchanda's firms had imported 87 consignments of books with a declared value of over Rs 19 crore. Records show that the imported books were sold to shops which turned out to be non-existent. In fact much of such imports are sold by weight as waste. Manchanda did not stop at such frauds. In one case, he went one step further and got foreign exchange released after producing documents purporting to show that a consignment of books had been shipped to India. The consignment never arrived.With such cases of major fraud being detected the question now is whether the rule on book imports should be changed. Says C.M. Chawla, managing director of UBS Publishers (one of the largest book importers): "We want all book importers to be registered with the Department of Education.'' Chawla who also heads the import committee of the Federation of Publishers and Booksellers Associations in India feels that, among other things, all importers should be asked to furnish documents under the Income Tax Act.The Government is yet to act on many such suggestions but there are indications that the book import policy may be changed next year. Judging by the extent of the current frauds, however, it will obviously be a long time before this particular chapter is closed.Published By: AtMigration Published On: Oct 31, 1989 00:00 IST--- ENDS ---

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Rs 70 crore scam in book imports unearthed

Rs 70 crore scam in book imports unearthed.

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