February 16, 1998

The ED is foxed as prime accused Prabhakar Rao vanishes.

By Harish Gupta

As scandals go, the urea scam seemed simple enough. Most of the bigwigs allegedly involved in the Rs 133 crore scandal had been arrested and the charge-sheets filed. And just when it seemed the case was all set for a denouement, one of the alleged kingpins of the scam -- P.V. Prabhakar Rao -- has vanished. Son of former prime minister P.V. Narasimha Rao, he was undergoing treatment for heart ailments in the Hyderabad-based Care Hospital. Prabhakar Rao did the disappearing act after being discharged from hospital on January 14.

And that's not all. The SPG commandos, who protect Prabhakar Rao round the clock, are untraceable too. Much to the chagrin of the Enforcement Directorate (ED), which has been on his trail for a long time, the SPG has refused to divulge any information so far. Says ED Director M.K. Bez Baruah, rather philosophically: "This is one of those surprises that keep happening in this country." The fallout is that the ED hasn't a clue to Prabhakar Rao's whereabouts. "He vanished from his house after being discharged from the hospital. But we will get him," says A.P. Kala, special director, ed.

But that seems rather optimistic, considering that Prabhakar Rao has used every trick in the trade to evade arrest so far. Ever since he was first summoned by the directorate in November 1996, he has used a combination of cunning and complex legal strategies to stay out of custody. When he lost the appeal against his arrest in the Supreme Court in October 1997, the ED team, led by R.K.S. Nin, chief enforcement officer, was all set to apprehend him. But he developed "heart problems" and had to be hospitalised on December 28.

Even the ED is surprised that it hasn't been able to nab Prabhakar Rao despite damning evidence against him. The first direct evidence came to light when one of the suspects -- Anand Mohan, an employee of Sai Krishna Impex, a firm in Hyderabad owned by another accused Sambasiva Rao -- admitted that he had paid a sum of Rs 2 crore to Prabhakar Rao. Mohan is the son of A.V.R. Krishnamurthy who was the Officer on Special Duty in the prime minister's office. The ED's case is that an unknown Turkish company, Karsan, had been given a Rs 133 crore contract by the public-sector National Fertiliser Ltd in early 1995 for the supply of urea. Surprisingly, the money was paid to the Turkish company at one go for the delivery of two lakh tonnes of urea, without any insurance cover and bank guarantees. Part of that money, ed says, was routed back to India through hawala channels as kickbacks.

The ED has by now gathered enough proof to show that $2 million (Rs 6.4 crore), out of a total of $4 million (Rs 12.8 crore) -- which were paid as kickbacks by Karsan -- were received in India. ED Deputy Director Ashok Agarwal discovered during the course of investigation that of the $2 million, $0.5 million (Rs 1.6 crore) was routed through a front company Quinone India Ltd. Another $1 million (Rs 3.2 crore) was deposited with Sai Krishna Impex, out of which Mohan gave Rs 2 crore to Prabhakar Rao.

Though the ED unravelled the scam with ease, it seems to be having a tough time tracking Prabhakar Rao down. From chasing him through courts and hospital wards, the ED is now writing letters to the SPG to reveal his whereabouts. The force has little option but to oblige because the SPG Act does not permit commandos to vanish along with the person they are protecting. But by the time the SPG replies, Prabhakar Rao could well have perfected another Houdini act.

© Living Media India Ltd