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Maharashtra: CVC writes to state over retired bureaucrat’s ‘unusual’ transactions; CM orders probe

Just as Fadnavis, who also heads the Home department, remained unavailable for comment, a senior official confirmed, "The CM has sought an inquiry on the issue. The CS has been asked to personally look into the matter." (Source: File)

Chief Minister Devendra Fadnavis has asked state's Chief Secretary Dinesh Kumar Jain to investigate the contents of a Central Vigilance Commission's (CVC) report, which has raised the red flag against certain high-value transactions carried out by Maharashtra's former Additional Chief Secretary (Home) K P Bakshi, post demonetisation on November 16, 2016.

Acting on the basis of a classified report by the Union Finance Ministry's Financial Intelligence Unit (FIU), the CVC has objected to the spike in the volume of transactions carried out through an account linked to Bakshi's personal account number (PAN) as "unusual" and "suspicious".

Last December, in a report to the state government, the CVC had reportedly demanded an investigation into the matter. Citing a few high-value transactions carried out post demonetisation, it has stated, "The said unusual transactions have emerged as a pattern from the PAN belonging to K P Bakshi and appear highly suspicious in nature, demanding an immediate investigation by the state government." Just as Fadnavis, who also heads the Home department, remained unavailable for comment, a senior official confirmed, "The CM has sought an inquiry on the issue. The CS has been asked to personally look into the matter."

Meanwhile, Bakshi, who is a 1982-batch IAS officer, when contacted, claimed that the transactions being referred to were all "legitimate" and "bonafide" transactions, which had been carried out either through cheque or the National Electronic Funds Transfer (NEFT).

"My wife, Neelima, and son, Shivesh, are partners in a Limited Liability Partnership company – ORACON LLP. The Maharashtra government has this information on the records of the General Administration Department (GAD). The company had applied for the opening up of a demat account for purchasing some infrastructure tax free (ITF) bonds as a tax saving tool. As the process of opening this account was getting unduly delayed, my wife and son had requested me to buy the bonds through my existing demat account, for which the LLP had transferred the required amount to my bank account," contended Bakshi, adding that he had already written to Chief Secretary Dinesh Kumar Jain, on January 23, 2019, explaining his stance.

Jain, when contacted, confirmed that his office had received Bakshi's letter. "But I am yet to go through it. I won't be able to comment on it further, till I go through the contents of the letter."

As per records under the Registrar of Companies (RoC), ORACON LLP was incorporated on May 28, 2016, while Bakshi was still in service. Its total obligation is Rs 1 lakh. Bakshi retired from service on November 30, 2016, and is presently the Chairman of the Maharashtra Water Resources Regulatory Authority. Bakshi, when asked, insisted that he had informed the state government about the LLP's incorporation, whilst in service. He further defended that "all the transactions being referred to were carried out after his retirement from service."

"My son's LLP had obtained a loan for financing the redevelopment work of a housing society in Thane. Additionally, the company had also utilised an overdraft facility of a bank for the same purpose. But on account of delay in taking up the redevelopment work, the company's chartered accountant had suggested that the loan amount should be parked in a fixed deposit or tax free infrastructure bonds. Somewhere in October, 2016, the company decided to invest in the latter, and initiated the process of opening up a demat account. But the process was opening this account got unduly delayed, which is when they requested me to buy the bonds through my existing account," said Bakshi. He added, "The transactions (being referred) to were carried out between February, 2017 and April, 2017. The company's demat account was finally opened on October 12, 2017, following which, the ITF bonds were transferred by me to the company's newly opened demat account."

While Bakshi said that the transactions had no relation whatsoever with his stint in government service, sources confirmed that the CMO has also sought information on the source of the funds and the LLPs' activities.