New Delhi, Feb. 16: More muck is rising to the surface as investigating agencies worldwide probe the deals negotiated by the Rastogi brothers — Virender, Ravindra, Narendra and Subhash.
In India, the quartet had tapped into almost every financial scheme the Centre offered to promote exports while allegedly defrauding the government of nearly Rs 43.66 crore.
The CBI has found that they indulged in largescale money laundering in 1995 when they owned companies exporting bicycle parts to Russia — and Hong Kong — to exploit the collapse of the rupee-rouble trade after the USSR disintegrated.
Non-bailable arrest warrants are pending in India against Virender and Ravindra for their alleged involvement in the bicycle-export scam. The Interpol apparently has been asked to issue a red-corner notice against them.
Ravindra, who was deported to Mumbai by Dubai on Tuesday, is wanted in 10 financial frauds registered by the CBI. The Serious Frauds Office in Britain is probing the alleged malpractice in business deals struck by the London-based Virender. In the US, the Federal Bureau of Investigation has begun investigations against Narendra for his alleged involvement in a $600-million scam. Subhash is out on bail after being arrested in Noida in September 2001.
In 1995-96, the Rastogi companies claimed to have exported bicycle parts to Capilla Plus, a Moscow firm. The CBI has found that Capilla Plus was owned by the quartet with Virender at the helm. The siblings had allegedly claimed trade benefits in India and Russia on the basis of the fraudulent exports.
They used to purchase rupees from the Russian Bank of Economic Affairs by allegedly bribing them with US dollars and remit the money back to India in the guise of export proceeds.
They also illegally benefited from the customs duty-drawback scheme, offered by the Union finance ministry to private companies to boost foreign exchange earning and make indigenous products competitive in the international market.
Under the scheme, the Centre gives a certain percentage of the value of goods exported as cash incentive after the companies submit proof of the goods shipped out to the customs department.
CBI sources said the brothers used to show export of bicycle parts at exorbitant rates to claim inflated duty drawback. For example, a bicycle part costing 10 paisa would be shown as having been shipped abroad at the rate of Rs 10. Thus, if the duty drawback was say 20 per cent, the brothers would get Rs 2 as incentive for a part costing only 10 paisa, said a CBI officer.
“Considering the dishonest business practices and the past criminal record, it is likely that the Rastogi brothers will not meet their commitments to financial institutions as their affairs come under scrutiny of various agencies of the world,” CBI sources said.
The Rastogi brothers have spread their network across the globe with business interests in Singapore, the UK, the US, Dubai and India. Virender’s cousin, Rakesh, owns companies in Romania.
Virender, who is said to be running Allied Deals, a metal trading and mining company in the UK, undertook major expansion after his company reportedly made a profit of £18 million in 1999. He acquired Baira Mare Copper Smelter — believed to be Romania’s largest gold and silver refinery — for $37 million. Now gold purchased and acquired by smuggling is allegedly traded by Allied Deals as gold produced by its Romanian firm.
Allied Deals apparently received a credit of $50 million from GMAC Commercial Credit, a financial subsidiary of German Motors. It is also supposed to have been given export refinance of $170 million by a German credit institution. He also purchased some stakes in another Romanian and a Bolivian firm.