The Telegraph
Since 1st March, 1999
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Before UP results, raid raj strikes

May 10: The starter’s gun went off a day early in the last round of the battle for Uttar Pradesh with tax raids being launched on two companies run by industrialists close to the Samajwadi Party.

Income-tax searches were carried out on the premises of packaging materials maker Uflex Ltd, formerly Flex Industries, and telecom equipment company Himachal Futuristic Communications in several states.

The promoter of Uflex, which has an annual turnover of Rs 1,200 crore and is considered one of the largest manufacturers of plastic films in the world, is Ashok Chaturvedi, a friend of Samajwadi general secretary Amar Singh. Amar was on the board of Flex till a few years ago.

During a controversy about Amar’s phones being tapped, it was suggested that Chaturvedi had tipped off the politician. The industrialist, charged in a bribery case but subsequently acquitted, was questioned in the course of the tapping probe.

Vinay Malu, one of the promoters of Himachal Futuristic, is considered the shadow of Amar. Malu, a familiar face during some of the Amitabh-Amar pilgrimages, was also seen with the Samajwadi leader at the wedding of Abhishek Bachchan and Aishwarya.

Raids on companies are not unusual and they do not mean much unless the charge — in this case suspected tax evasion — is proved in a court.

But the timing — the eve of the declaration of the Assembly poll results — had the political landscape abuzz with speculation. The polls are expected to throw up a hung Assembly and all players are bracing for deals and counter-deals in which no combination can be ruled out.

As the searches were carried out by an agency that reports to the Centre, theories of sabre-rattling by Delhi were doing the rounds in Lucknow as well as the national capital.

Union finance minister P. Chidambaram denied the government had anything to do with the raids. “Such things are not done at our level,” Chidambaram told reporters in Delhi.

Income-tax raids are usually cleared by the local commissioner, who reports to the Central Board of Direct Taxes under the finance ministry. According to the board, local tax commissioners act independently.

As many as 10 premises of Uflex were searched and surveyed today in Noida, Delhi and Goa. The offices and homes of Himachal Futuristic executives in Himachal Pradesh and Haryana were also searched.

For practical purposes, a raid and a search are more or less similar. But legally, a search is upgraded to a raid only if it involves seizures. PTI quoted unnamed sources as saying “voluminous” documents were seized from Uflex premises but such claims are routinely made.

Amar, recovering from surgery to remove kidney stones, termed the raids “coercive” measures by the Congress-led Centre. “If they want to raid me or Mulayam Singh, they are more than welcome to do that.”

Mulayam echoed him: “The Congress had done this earlier with Amitabh Bachchan and now with Ashok Chaturvedi.”

A few days ago, Union minister Kapil Sibal had alleged that the Uttar Pradesh government had allotted six plots in Noida to persons whose address was the same as that of Flex Industries.

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