Muthuvel K Stalin, son and anointed heir of of the Dravida Munnetra Kazhagam President M Karunanidhi, is mentioned in an Enforcement Directorate chargesheet that alleges that the former Deputy Chief Minister of Tamil Nadu met with two of the key accused in the 2G telecom scam, billionaire businessman Shahid Balwa and former Telecom Minister A Raja, in his home.
The principal financial transaction in the 2G scam, being investigated by both the Central Bureau of Investigation and ED independently, is a Rs 200 crore Inter Corporate Deposit allegedly made by Shahid Balwa’s DB Realty to the Karunanidhi family-owned Kalaignar TV through front companies in 2009.
Balwa was the promoter of Swan Telecom, which was allotted frequency licenses for mobile spectrum by former Telecom Minister A Raja of the DMK in 2008. Balwa is accused of making the Rs 200 crores ICD as a bribe in return for the allocation.
This revelation came as Karunanidhi and Stalin are reeling from a crushing defeat in the Lok Sabha elections, as the party failed to get even a single seat.
The ED chargesheet, filed on April 25, says that evidence of the meeting was given by Sadiq Batcha, a close business associate of Raja. Batcha was found dead in his apartment in March 2011 in an apparent suicide. His death came a week after he spoke to the ED.
The ED’s chargesheet says it recorded Batcha’s statements on 28/01/11 and 21/02/11, during which he said, “Shahid Balwa came to Chennai and held a meeting with MK Stalin, who was Deputy Chief Minister of Tamil Nadu at the time and Mr. Raja was present at the meeting which took place in Stalin’s residence.”
In addition to the revelation made by Batcha, the ED’s chargesheet also cites evidence to suggest that Stalin’s personal assistant Raja Shankar and chartered accountant Siva Subramanian negotiated with certain companies that could also have paid financial kickbacks at the time.
“Since both Raja and Shahid Balwa are key accused in the scam and their meeting with Stalin took place around the same time as the financial transaction, it is clear that Stalin must be probed further,” said a senior DMK official who requested anonymity.
So far the 2G investigation has centred on Stalin’s half-sister, Kanimozhi. The CBI, which filed its chargesheet in the case in 2012, alleged that Kanimozhi, Sharad Kumar, then head of Kalaignar TV, and A Raja were the principal perpetrators of the illegalities.
The CBI’s case against Kanimozhi and Sharad Kumar argued that each of them held a 20% stake in the television company and were actively involved in its financial dealings. The agency claimed that though Karunanidhi’s second wife, Stalin’s mother Dayalu Ammal, held the remaining 60% stake, she was not involved in the management of the network.
But a number of doubts have been raised about why the CBI chose not to investigate the matter further. “It is believed that Dayalu Ammal’s 60% was in effect owned by her three sons MK Azhagiri, MK Stalin and MK Tamizharasan,” a highly placed DMK official told Scroll.in. "Her 60% holding was representative of 20% for each son and they were all actively aware of what was going on." It is alleged that such large sums of money could not have changed hands without the knowledge of both DMK president M Karunanidhi and Stalin, who was treasurer of the party and Deputy Chief Minister of Tamil Nadu at the time.
“It is certain that investigations were carried out under severe political pressure," said journalist Paranjoy Guha Thakurta, who has tracked the case closely. "The DMK was a strong ally of the Congress, and while Kanimozhi was considered dispensable, Stalin and Karunanidhi were too powerful to be touched."
He added, “The DMK’s defeat in the 2011 assembly elections were the reason the case even reached Kanimozhi. Had they won, it could have ended with Raja.”
Kanimozhi’s arrest in the case took place only days after the 2011 Assembly election results were announced, in which the DMK lost to Jayalalithaa in Tamil Nadu.
The ED chargesheet brings up the testimony about Stalin’s meeting with Balwa and Raja, but it has refrained from accusing him of wrongdoing. Yet humiliation at the Lok Sabha polls could have serious consequences as the anti-Stalin faction within the DMK – his great political rival is his older brother, MK Azhagiri – is using this as a chance to reassert themselves.
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The principal financial transaction in the 2G scam, being investigated by both the Central Bureau of Investigation and ED independently, is a Rs 200 crore Inter Corporate Deposit allegedly made by Shahid Balwa’s DB Realty to the Karunanidhi family-owned Kalaignar TV through front companies in 2009.
Balwa was the promoter of Swan Telecom, which was allotted frequency licenses for mobile spectrum by former Telecom Minister A Raja of the DMK in 2008. Balwa is accused of making the Rs 200 crores ICD as a bribe in return for the allocation.
This revelation came as Karunanidhi and Stalin are reeling from a crushing defeat in the Lok Sabha elections, as the party failed to get even a single seat.
The ED chargesheet, filed on April 25, says that evidence of the meeting was given by Sadiq Batcha, a close business associate of Raja. Batcha was found dead in his apartment in March 2011 in an apparent suicide. His death came a week after he spoke to the ED.
The ED’s chargesheet says it recorded Batcha’s statements on 28/01/11 and 21/02/11, during which he said, “Shahid Balwa came to Chennai and held a meeting with MK Stalin, who was Deputy Chief Minister of Tamil Nadu at the time and Mr. Raja was present at the meeting which took place in Stalin’s residence.”
In addition to the revelation made by Batcha, the ED’s chargesheet also cites evidence to suggest that Stalin’s personal assistant Raja Shankar and chartered accountant Siva Subramanian negotiated with certain companies that could also have paid financial kickbacks at the time.
“Since both Raja and Shahid Balwa are key accused in the scam and their meeting with Stalin took place around the same time as the financial transaction, it is clear that Stalin must be probed further,” said a senior DMK official who requested anonymity.
So far the 2G investigation has centred on Stalin’s half-sister, Kanimozhi. The CBI, which filed its chargesheet in the case in 2012, alleged that Kanimozhi, Sharad Kumar, then head of Kalaignar TV, and A Raja were the principal perpetrators of the illegalities.
The CBI’s case against Kanimozhi and Sharad Kumar argued that each of them held a 20% stake in the television company and were actively involved in its financial dealings. The agency claimed that though Karunanidhi’s second wife, Stalin’s mother Dayalu Ammal, held the remaining 60% stake, she was not involved in the management of the network.
But a number of doubts have been raised about why the CBI chose not to investigate the matter further. “It is believed that Dayalu Ammal’s 60% was in effect owned by her three sons MK Azhagiri, MK Stalin and MK Tamizharasan,” a highly placed DMK official told Scroll.in. "Her 60% holding was representative of 20% for each son and they were all actively aware of what was going on." It is alleged that such large sums of money could not have changed hands without the knowledge of both DMK president M Karunanidhi and Stalin, who was treasurer of the party and Deputy Chief Minister of Tamil Nadu at the time.
“It is certain that investigations were carried out under severe political pressure," said journalist Paranjoy Guha Thakurta, who has tracked the case closely. "The DMK was a strong ally of the Congress, and while Kanimozhi was considered dispensable, Stalin and Karunanidhi were too powerful to be touched."
He added, “The DMK’s defeat in the 2011 assembly elections were the reason the case even reached Kanimozhi. Had they won, it could have ended with Raja.”
Kanimozhi’s arrest in the case took place only days after the 2011 Assembly election results were announced, in which the DMK lost to Jayalalithaa in Tamil Nadu.
The ED chargesheet brings up the testimony about Stalin’s meeting with Balwa and Raja, but it has refrained from accusing him of wrongdoing. Yet humiliation at the Lok Sabha polls could have serious consequences as the anti-Stalin faction within the DMK – his great political rival is his older brother, MK Azhagiri – is using this as a chance to reassert themselves.