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Deutsche Bank trust: 14 transactions of IFFCO, its CEO, red-flagged to US watchdog

TRANSACTIONS of co-operative giant Indian Farmers Fertiliser Cooperative Limited (IFFCO) with three companies based in Dubai, Switzerland and Singapore, were red-flagged by Deutsche Bank Trust Company Americas (DBTCA) to the US financial watchdog, Financial Crimes Enforcement Network, an investigation by The Indian Express has shown.

The FinCEN Files, a global investigation led by the International Consortium of Investigative Journalists and BuzzFeed News, scrutinised over 2000 Suspicious Activity Reports filed to FinCEN by banks and financial institutions for suspected money laundering or financial fraud.

In July 2014, an SAR filed by DBTCA flagged 14 transactions of IFFCO involving transfers and remittances worth $18.46 million. The SAR cited “negative information found on the MD and CEO of Indian Farmers Fertiliser Cooperative Limited for potential money laundering.”

Read | FinCEN Files: 28 Indian banks asked if they alerted watchdog at home

These transactions involved IFFCO; its Dubai subsidiary Kisan International Trading FZE and commodities trading companies in Switzerland and Singapore.

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Some transaction details indicated the payments “were for subscription fee (but) DBTCA was unable to confirm the commercial purpose of any of these transactions.”

The SAR mentioned a complaint by BJP MP Nishikant Dubey to then Prime Minister Manmohan Singh accusingIFFCO MD and CEO Uday Shankar Awasthi of “financial frauds, andsiphoning of money and money laundering activities.”

When contacted, Dubey, a Lok Sabha MP from Jharkhand, told The Indian Express that he had written three complaints – between 2011 and 2013 – to Singh and they were forwarded to investigative agencies but the outcome was “unknown.”

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According to its SAR, DBTCA approached State Bank of India (SBI) for information about IFFCO (SBI’s client) asking whether SBI had any reason tobelieve that the listed transactions were in any way of a suspicious nature. The SBI had responded with a “No.” When asked about complaints against Awasthi, the bank had said: “We don’t have any information.”

The Indian Express sent a detailed questionnaire to Awasthi. In response, Kamal Verma, Senior Executive Director, IFFCO, said: “We are not aware about any transaction made by IFFCO worth over $18 million during March 2014to June 2014, which were red-flagged as suspicious in 2014. We confirm that there has not been any instance of financial irregularity, siphoning of money or money laundering.”

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He added: “In case details of $18 million transaction are provided, relevant information for the same can be made available to substantiate the genuineness of such payments. During the referred period of March 2014 to June 2014, all payments against imports were made through authorized banks like, State Bank of India, HSBC, RBS, Kotak Mahindra Bank etc. against submission of documents…and the bankers release/remit the payments to the overseas suppliers only after effecting due diligence with respect to the authenticity of the transaction and the suppliers. The Board of Directors ofIFFCO has approved an elaborate procedure for purchase of raw materials and finished products. The Commercial Department initiates necessary actions for procurement of such material. All such proposals are being reviewed and approved by the Executive Committee of the Board of Directors. The Managing Director& CEO is not directly involved in procurement/purchase of raw materials.”

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