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A Governor's exit

Print edition : Feb 16, 2002 T+T-

Prabhat Kumar is forced to resign as the Governor of Jharkhand following certain revelations by an accused in a bribery case.

JHARKHAND Governor Prabhat Kumar resigned on January 31, after a prolonged phase of suspense. The action was a consequence of Flex Industries chairman and managing director Ashok Chaturvedi's confession to the Central Bureau of Investigation (CBI) that he had paid for three parties hosted at the official residence of Kumar in New Delhi between March 1999 and July 2000 when he was Cabinet Secretary.

The CBI arrested Chaturvedi, his employee John and the Chief Commissioner of Central Excise (Delhi Zone), Someshwar Mishra, on November 7 last, following a tip-off. Mishra was caught allegedly accepting Rs.5 lakhs. The CBI seized another Rs.5 lakhs from a vehicle registered in the name of Flex Industries, parked at Mishra's office premises. The CBI then searched Mishra's home and seized Rs.2.12 lakhs in cash and receipts of fixed deposits worth Rs.6.5 lakhs. It also found that Mishra used a car registered in the name of Chaturvedi. Chaturvedi was alleged to have acted as a middleman between Mishra and the manufacturers of a leading brand of pan masala, for whom Flex Industries supplied pouches.

CBI sources alleged that it was at the behest of Chaturvedi that Mishra decided to remove the Preventive Wing teams that had been posted in several divisions to check excise duty evasion and the free movement of goods. It is alleged that the pan masala industry, which stood to benefit from this decision, paid large sums of money to Mishra and Chaturvedi. Also, at Chaturvedi's intervention, Mishra allegedly dropped an appeal against a tobacco company for under-assessment of excise duty.

Chaturvedi, John and Mishra are now out on bail. Flex Industries, with a turnover of about Rs.700 crores and an asset base of Rs.850 crores, has its corporate office in NOIDA (Uttar Pradesh) and has a unit in Palanpur in Bhind district of Madhya Pradesh. With a staff strength of about 1,800, the Flex Group, of which Chaturvedi is a promoter, once had on its board of directors Samajwadi Party leader and Rajya Sabha member Amar Singh and Rajya Sabha member and former journalist Rajeev Shukla. The company, engaged in flexible packaging, was a private limited company in the early 1980s and became a public limited company in 1989-90.

A diary seized from Chaturvedi's home, according to CBI sources, contained names and contact numbers of some politically influential persons. "The diary can in no way be compared to what we secured during the hawala investigations, which revealed substantial payments to certain politicians by the accused brothers," a CBI source said. Yet, it appears that it could point to significant leads.

THE CBI has not sought the permission of the government or the President to interrogate Prabhat Kumar although it had selectively leaked Chaturvedi's confession to the media. In his statement, Chaturvedi said that he had paid about Rs.44,000 by cheque from Flex Industries' bank account to a catering firm which organised the party on March 5, 1999, and Rs.79,218 for another party, held on February 27, 2000. The bill for the high tea hosted on July 10, 2000 amounted to Rs.10,368. Chaturvedi also reportedly threw a party in honour of Prabhat Kumar on June 14, 2001, when he was Governor of Jharkhand, at a luxury hotel in New Delhi and paid the bill amount of Rs.37,219.

While demitting office, Prabhat Kumar did not deny any of these allegations but claimed that some of the parties that media reports had referred to were not hosted by him, while the payment for the rest was made by him personally. Observers say that an explanation from Prabhat Kumar as to why these parties were held at his official residence could have helped clear the misgivings.

The allegations of a Prabhat Kumar-Chaturvedi nexus would still require substantiation. In order to make out a case under the Prevention of Corruption Act, the CBI may have to come up with more credible evidence on Chaturvedi's motives in paying for Prabhat Kumar's parties although it is not necessary to establish that he returned Chaturvedi's favours by taking certain actions as Cabinet Secretary.

But there can be little doubt that Prabhat Kumar violated one of the salient provisions of the Central Civil Services (Conduct) Rules. Note 2 under Rule 13(1) makes it clear that a government servant shall avoid accepting lavish hospitality or frequent hospitality from any individual, industrial or commercial firms, organisations, and so on, that have official dealings with him. If Prabhat Kumar's defence is that Chaturvedi was his personal friend and he had no official dealings with him, he may not probably be guilty of violating the Conduct Rules. But this needs to be established. It is naive to believe that a businessman like Chaturvedi would have paid from his company's account for a friend's personal party thrice without expecting any favours in return, particularly when that friend happened to be a top bureaucrat.

This is not the first time that Prabhat Kumar has found himself mired in a controversy. He was Principal Secretary (Home) in Uttar Pradesh on December 6, 1992 when the Babri Masjid was demolished. The Liberhan Commission, which has already examined him, is inquiring into his alleged negligence of duty. In fact the government had overruled objections from responsible quarters to his elevation as Governor in view of the dubious role he played during the demolition. Even after the CBI's revelations about the bureaucrat-politician-businessman nexus, the Centre allowed him to continue as Governor for nearly a month, until a wedding in his family was over.

The Central government's lack of commitment to fight corruption in the bureaucracy became clear when it decided to transfer Kailash Sethi, Deputy Director-General, Central Economic Intelligence Bureau (CEIB), as Director (Audit), Customs and Central Excise. Sethi, who tapped the telephone conversations of Chaturvedi, promptly shared the information with the CBI. This led to the arrest of Chaturvedi and Mishra. Sethi's transfer came close on the heels of the arrests.