New Delhi:
When Income Tax officials raided a steel company's office in Ashoka Hotel in Delhi in December 2010, they found documents that noted the company's payments, all in cash, to officials in the steel ministry and some state-run firms.
The firm that was raided was ISPAT Industries Limited (IIL). At the time, it was owned and run by Pramod and Vinod Mittal, the brothers of steel tycoon and multi-billionaire Lakshmi Mittal.
The entries of the payments suggested kickbacks so the Income Tax department followed up, asking for responses from the government departments listed in the company's records as the intended beneficiaries of the money. But the investigations did not go any further.
One of the intended beneficiaries is listed as "VBS" - four payments adding up to 2.8 crores were made to "VBS" from October 2009 to October 2010.
At the time, the Steel Minister was Virbhadra Singh. He had taken charge of the ministry in May 2009. He was shifted from the ministry a few months after the raids.
In Himachal Pradesh, which votes in November for its next government, Virbhadra Singh, was furious when asked about the alleged kickbacks. "I completely deny this. I am not 'VBS'. Somebody is trying to frame me," he said.
When asked who that might be, he took the names of BJP leaders Arun Jaitely and Anurag Thakur and said the attempt to malign him comes as he is campaigning for his party, the Congress. Virbhadra Singh has in the past served as chief minister of Himachal Pradesh.
BJP's Arun Jaitley dismissed Mr Singh's charges and said, "I think prima facie these documents give you a strong reason to suspect a crime has been committed. (This should be) a stepping stone for commencement of investigation, not by the CBI but by a Special Investigation Team."
When asked about the documents found by Income Tax officials, Pramod Mittal, who used to run ISPAT said, "We totally deny making any such payment. We follow best corporate practices... we always work as per the law of the land."
In 2009, three instalments adding up to 1.2 crores were paid to State Trading Corporation or STC, an autonomous public sector company. In 2010, four separate payments totalling nearly 10 crores were paid to a state-run firm MSTC. In 2009, ISPAT had defaulted on almost 700 crores on lines of credit to these two firms.
The company's diaries also show payouts to officials in the Coal Ministry and the External Affairs Ministry.
After the raids, ISPAT paid 125 crores as penalty for tax evasion.
Refuting the opposition's demand for an inquiry, Congress spokesperson, Manish Tewari said "a diary entry is a non-sequitur, it is not evidence that is admissible in court... there's a difference between investigation and fishing expedition."
Notices were sent by Income Tax officials to Central Vigilance Officers, appointed to check graft, in the different government departments that received payments from ISPAT. The Steel Ministry has yet to respond.
In December 2010, JSW Steel acquired majority stake in ISPAT. In a statement to NDTV, a company spokesperson said on Friday, "The period referred in your email is prior to acquisition by JSW Steel. The previous management can only clarify on this issue."
Many experts and analysts say that in this case lies more evidence of the need for transparency in corporate governance, and an overhauling of a system that remains susceptible to graft.
On Wednesday, the Prime Minister had said anti-graft laws would soon cover the private Sector. "Big-ticket corruption is mostly related to operations by large commercial entities. It is therefore also proposed to include corporate failure to prevent bribery as a new offence on the supply side," Dr Manmohan Singh said.