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Is Modi govt lying about its dealings with blacklisted British firm De La Rue?

Charu Kartikeya | Updated on: 31 May 2017, 13:01 IST
(Arya Sharma)

A recovery suit filed by the Union government's printing press has blown the lid off what has the potential to turn into a major scam. The Government Security Paper Mill in Hoshangabad, Madhya Pradesh, has reportedly filed a suit in a local court seeking recovery of Rs 11 crore from British banknote manufacturer De La Rue. SPMCIL has alleged that the firm supplied sub-standard paper for printing of currency notes of Rs 100, Rs 500 and Rs 1000 denominations in 2016.

Prima facie, it looks like a simple case of a government-contractor supplying material of an inferior quality. It would have been that, but for another simple fact – the firm in question was blacklisted by the Union Home Ministry in 2011. Reports claim that De La Rue was blacklisted because one, it supplied the same currency printing paper to Pakistan as well and two, it had supplied Rs 300 crore worth of defective currency printing paper.

The issue had first come to fore in December 2016 during the demonetisation period, with Opposition parties raising it. The then chief of the Aam Aadmi Party's Delhi unit, Dilip Pandey, had claimed that De La Rue was printing currency at the Mysuru press in spite of being blacklisted by the UPA government, investigated by CBI in 2010-2011 and subsequently also named in the Panama Papers. 

AAP wasn't alone. Senior Congress leader and former chief minister of Kerala, Oommen Chandy, had also claimed in December De La Rue’s annual report of 2016 mentioned “India operations of De La Rue Cash Processing Solutions India Pvt. Ltd. and De La Rue India Pvt Ltd”. Chandy had also quoted comments by Martin Sutherland, chief executive of De La Rue, from a media interview that the company had set up an office in Delhi and its senior management was working closely with the Department for Industrial Policy and Promotion (DIPP).

Finance Minister Arun Jaitley had then taken these allegations head-on, categorically asserting that the government had no “dealings” with De La Rue.

The case in the Hoshangabad court flies in the face of Jaitley's previous assertions. AAP has once again raised the issue and demanded an apology from Jaitley for lying about the issue earlier.

A complicated issue

The printing of Indian currency is a particularly vexing issue since the government claims that the country has become full self-reliant in currency printing, but admits to import things like paper for the purpose. The government had told the Lok Sabha as far back as in August 2014 that the country had become self-reliant in printing of currencies and that the total requirement of about 21,000 million pieces of bank notes was being printed within the country.

However, the government had also told the same house in March 2017 that it was importing paper for printing of currency notes and was spending Rs 1000 crores every year for the purpose.

Details of any contract awarded to a private firm, foreign or domestic, are not easily available. Many believe it is a secretive industry. A study claims that the machinery at the Mysore press has been supplied by De La Rue Giori, which is now known as KBA Giori, Switzerland.

Reports had also emerged earlier this year that the Maharashtra government had signed an agreement with De La Rue, awarding it 10 acres of land in Aurangabad where it will print Indian as well as foreign currency notes.

De La Rue has a long history of global shady dealings. India first gave it the contract to print currency in 1997-98 and since then RBI became one of the firms biggest clients. However, reports claim that a probe was ordered in 2009-10 when fake currency notes allegedly printed by De La Rue were found in RBI vaults. This was followed by reports of the firm supplying sub-standard paper. RBI even sent an official on a fact-finding mission in 2010 and the company was eventually blacklisted.

Is De La Rue, once headed by a man known as the godson of the Queen of England herself, back in business with the government of India? The government must come clean.

First published: 30 May 2017, 19:00 IST
Charu Kartikeya @CharuKeya

Assistant Editor at Catch, Charu enjoys covering politics and uncovering politicians. Of nine years in journalism, he spent six happily covering Parliament and parliamentarians at Lok Sabha TV and the other three as news anchor at Doordarshan News. A Royal Enfield enthusiast, he dreams of having enough time to roar away towards Ladakh, but for the moment the only miles he's covering are the 20-km stretch between home and work.