BJP president Nitin Gadkari has denied that his business empire was propped up by ghost investors. But visits by income tax officials to many of these firms across Mumbai, Pune, Nagpur, Delhi and Kolkata signaled desperate attempts by them to assemble credibility. These visits are part of the income tax department's initial inquiry into the allegations against Mr Gadkari.
Sources say that at different locations in Mumbai, offices were being dressed up to resemble places of business. Carpenters were at work, putting together office furniture. 13 people - former or current directors of these firms - were questioned about their sources of funding.
These early inquiries, according to officials involved with today's exercise, suggest that many directors in the firms that bought stake in Mr Gadkari's Purti Power and Sugar Limited were security guards, labourers, astrologers - "men of no means" in the words of a source who does not want to be named.
Mr Gadkari spent the day in Nagpur consulting lawyers. He has said he wants to sue a section of the media for a "vilification campaign." He set up Purti in 2000 and resigned as its chairman last year. He now holds a negligible 200 shares in the company which declared a turnover of 300 crores last year.
Some of the 18 investor firms in Purti were founded with a paid-up capital of just Rs 2000-3000 but later, huge amounts were infused in these companies. The income tax department is investigating them for suspected tax evasion and for alleged money laundering. They will have to explain how they arranged their funds.
The government began verifying the credentials of the maze of firms that bought into Purti after NDTV reported earlier this month that many of them shared bogus addresses and directors, including the BJP president's driver.
His party has said it stands by Mr Gadkari and praised him for declaring that he is open to any inquiry. But privately, the party is reportedly worried about the damage that the allegations against its president could cause in elections scheduled over the next two months in Himachal Pradesh and Gujarat. Fortified with the recent series of financial scandals that have erupted in telecom and coal, the BJP has been attacking the government for insuperable corruption. Its stand is considerably undermined now because of the inquiry against Mr Gadkari.