July 7: The stamp paper scandal has kicked back to life with the discovery of a printing machine used by alleged mastermind Abdul Karim Telgi and the arrest of a former police officer said to be close to a senior Karnataka politician.

The CBI today said it has seized in Mumbai a Heidelberg machine that was used by Telgi for making positives of fake revenue stamps. The fake stamp paper scandal, spread across several states, is said to have cost the country Rs 30,000 crore in lost revenue.

The machine was seized after raids were carried out on two printing presses in Mumbai on information provided by a suspect now in the CBI’s custody.

The glare was also back today on the policemen-politician nexus in the scandal, which already has scalded the reputation of several officers and leaders in Maharashtra, Karnataka and Andhra Pradesh.

In Bangalore, the CBI arrested a retired assistant commissioner of police and two other police officers. The bureau believes that the three — T.G. Sangram Singh, Vali Basha and Vazeer Ahmed Khan — had subverted investigation against the suspected scam kingpin.

The trio had been suspended by the previous Congress government on the basis of a report filed by a special investigation team.

Sangram’s arrest could reopen a political controversy as his proximity to a powerful politician in the state is well known. The scandal had taken a toll of the earlier government, forcing the resignation of a minister, Roshan Baig, when his brother was arrested for alleged links with Telgi.

In Chennai, too, it was time for the police to face the heat in the scam. The CBI today told the additional chief metropolitan magistrate’s court that “many other police officers in Tamil Nadu” were involved in the racket.

Bureau counsel Jacob Daniel also opposed the bail pleas of three top officials arrested by the CBI here on July 1. Two of them are police officials — DIG A.P. Mohammed Ali and ACP S. Shankar — and the third is a Madurai-based insurance official, Ramaswamy Sadhu.

Daniel told the court that “lakhs and lakhs of rupees were paid to police officers in Tamil Nadu” to facilitate the sale of fake stamp papers.

He said the CBI had “tape-recorded conversation of the prime accused (Telgi)”. The recorded statements, he clarified, have been corroborated by independent witnesses and bring out from the “horse’s mouth” the amounts Telgi had paid the police officials.

He mentioned that the CBI had collected “many useful clues” while interrogating the trio.

Daniel disputed the contentions of the accused’s counsel that the three were arrested without tangible evidence and that no incriminating documents were seized during the CBI raids at their residences in Chennai on July 1.

Of the 48 cases registered by the CBI in connection with the scam, one relates to Tamil Nadu in which the key accused is Nizamuddin, a man said to be “a trusted lieutenant of Telgi”.

There are three more accused — Wahid, Balaji and Saira Banu — in this case. The three are believed to be agents of the stamp scam kingpin.

According to the CBI counsel, at Telgi’s behest, two firms were opened in Chennai. The purpose of one of these firms, run by Saira, was to supply fake stamps exclusively to the Life Insurance Corporation.

Of the two police officers being interrogated, Ali is accused of not arresting Balaji even after fake stamps were seized from him.

Sadhu is believed to have connived with Telgi for selling fake stamps to the Life Insurance Corporation. The police officials and Sadhu are on suspension. The bail pleas of the two cops have been denied.