By Harshad Mehta, Indian Stock Broker

I, Harshad S. Mehta, Indian in habitant of Bombay, aged 39 years and residing at 32 B, Madhuli, Dr.Annie Besant Road, Worli, Bombay 400 018 do hereby solemnly affirm and state as under.

It is public knowledge that 9 First Information Reports (hereinafter referred to as “FIRs”) have been filed against me by the Central Bureau of Investigation (CBI). It is also public knowledge that apart from the CBI other investigating agencies such as the Enforcement Directorate and the Income Tax Department have also initiated investigations into the business activities of me, my family members and various companies under my control.

During my interrogation by the CBI, I have at least on two occasions been queried about withdrawals of large funds from my Bombay and Delhi Bankas counts. ‘The queries pertain to the reasons as to why these huge cash withdrawals were made and how the cash so withdrawn was disbursed.

On 9th February, 1993 I was queried by the CBI in Bombay in connection with these cash withdrawals. In particular the CBI interrogated me in connection with cash withdrawals amounting to Rs 85, 00,000/from my Bank Accounts. This sum of Rs 85,00,000/ was withdrawn on two dates, viz 2nd November 1991 and 4th November, 1991 from my bank accounts in Bombay and New Delhi respectively.

The reason for the said cash withdrawals as also the disbursement of the same are matters which are politically sensitive in the extreme as is elaborated hereinafter. It is for this reason that in my cash ledger accounts for Bombay and New Delhi there is no narration against the above mentioned four amounts and the narration column against these accounts was deliberately left blank.

‘The Income Tax Department has seized the computer data containing these. Cash ledger accounts in its raid that was conducted on my group on 28thFebruary 1992. The data pertaining to these cash ledger accounts are also in the possession of CBI.

On 17th February, 1993 I addressed a letter through my advocate Mahesh Jethmalani to the Director CBI, Samit K.Datta which was delivered to him on 18th February, 1993 in New Delhi, My advocate informed the Director that I have been interrogated by the CBI about the said cash withdrawals. Jethmalani further informed the Director that the reasons for the cash withdrawals as well as the disbursement of the amounts are politically sensitive in the extreme. My advocate.

an assurance from the said Director of CBI of complete protection from political harassment and persecution in the event that I make a statement to the CBI of the true facts regarding the above mentioned cash withdrawals. Till date no reply has been forthcoming from the said Director of CBI.

On 18th February, 1993 I was required to appear before the Income Tax authorities in Bombay under a summons. I was interrogated by the Income Tax Authorities on that day. During the course of this interrogation the Income Tax Department for the first ime queried me about two of that above mentioned withdrawals amounting to Rs 45, 00,000/withdrawn on 4th November, 1991 at New Delhi. L informed the Income Tax Authorities that the answer to the query about the said two withdrawals was very sensitive in nature and that in connection with the same my advocate had addressed a letter to the CBI the previous day and a reply to the same was being awaited by me. I assured the Income Tax authorities who were interrogating me that 1 would reply to their query after I received a reply from the CBI.

I have known one Sunil Mittal since 1989. Sunil Mittal resides in New Delhi and is one of the directors of M/s Bharati Telecom Limited. Land my family members are one of the largest shareholders in M/s Bharati Telecom Limited. Sunil Mittal’s father was one Satpal Mittal, who died in January, 1992. Through my connection with Sunil Mittal 1 developed a close association with his father Satpal Mittal, who was a Parliamentarian of longstanding, at the time of his death he was a member of the Rajya Sabha representing the State of Haryana. Satpal Mittal wielded considerable influence in the corridors of power in New Delhi.

Sunil & Satpal Mittal were considerably impressed with our activities in the stock market particular, as friends they had always emphasized the importance of political clout to achieve economic prosperity in this country. We had established some contacts through them; sometime in early October of 1991 they told me that Satpal Mittal was close to the Prime Minister Narasimha Rao.

He had met him and apprised him about who we were and how we could be of help to him. Apparently the Prime Minister was quite impressed and interested enough to meet me personally. The Mittals told me that the Prime Minister’s election to the Parliament was due shortly on 16th November, 1991 and that this election presented a good opportunity for organizing a meeting with him.

He further suggested that it would be an opportune moment in particular to present the Prime Minister with a blue print reflecting our ideas as to how the capital market could play a vital role in ushering speedy economic growth. He also suggested that we could make a donation to the Prime Minister for his forthcoming election to Parliament, and thereby establish enduring friendship with continuous access to the Prime Minister. Sunil told me that he would speak to the Prime Minister and fix a convenient date as well as certain from him financial needs for the election.

On November 11991, Sunil contacted me in Bombay and informed me that a meeting had been arranged by his father for November 4, at 10:45 am, Sunil also told me that his father had been asked to secure a contribution of Rs | crore for the Prime Minister’s election. I told Sunil that it would be extremely difficult to raise Rs | crore in cash at such a short notice, Sunil said that as the meeting was already arranged we should not allow the opportunity to slip by and I should anyhow arrange the money.

After I spoke to Sunil 1 immediately contacted Mohan Khandelwal, president of my company, Growmore. I told him that Rs 1 crore was needed by me in cash and be made available to me at the very latest.

On the next date i.e. November 2, 1991, he contacted me and told me it was impossible to raise the money by Monday morning. The only way that it could be done according to him was by making cash withdrawals from my Bank accounts from New Delhi and that in turn would only be possible if there was a clear balance in my accounts, which according to him there was not.

The only way therefore, by which 1 could deliver the money to Narasimha Rao on the scheduled date was by withdrawing monies from my bank accounts in Bombay.

Apart from the Rs 40, 00,000 handed over to us by the two banks, we also had a cash balance of little over Rs 15, 00,000. This amount we decided to carry to New Delhi along with Rs 40, 00,000, which we had withdrawn from the Bank. Thus the total amount which we decided to take to New Delhi was Rs 55, 00,000.

On Sunday 3rd Nov.1991, l along with my brother Ashwin Mehta who was to join me, Satpal and Sunil Mittal at the meeting with the Prime Minister, travelled to New Delhi. The money which was to be delivered the following day was carried by us in two suitcases.

We arrived in New Delhi from where we drove straight straight to Holiday Inn Hotel where we arrived at around midnight. We were informed on our arrival at New Delhi by Khandelwal that he had only managed to raise a sum of Rs 12,00,000/in New Delhi.

Then next morning I spoke to Sunil Mittal on telephone and told that we had only managed to raise Rs 67, 00,000/so far. We told him that the balance could be arranged within 24 hours. Sunil Mittal told us not to worry since his father would manage the deficit with the Prime Minister.

Prior to our departure in the morning Mohan Khandelwal arrived with a suitcase containing Rs 12, 00,000/. The total sum of Rs 67, 00,000/was placed in a large suitcase which we had obtained for the purpose of carrying all the money to the Prime Minister’s residence.

When we reached the Prime. Minister’s bungalow we were straightaway escorted of the room of Khandekar, Personal Secretary to the Prime Minister, Satpal Mittal was greeted profusely by Khandekar. We had carried out Suitcase containing Rs 67, 00,000/ which we deposited in a corner of Khandekar’s room. From Khandekar’s office we were taken by Khandekar within 5 minutes to the drawing room of the Prime Minister, within minutes the Prime Minister emerged in the said drawing room. Immediately on the arrival of the Prime Minister Satpal Mittal introduced me and Ashwin to the Prime Minister as “Two Bright Stars of Bombay.” The Prime Minister said that he had already heard about us. Ashwin handed over a profile of M/s Growmore and outlined to the Prime Minister for about three Minutes our group activities, Thereafter Ashwin unfolded the main agenda, by outlining in brief to the Prime Minister the untapped potential of the capital market as an engine for fueling economic growth. Ashwin also outlined to the Prime Minister our theory of the efficacy of debt and red it swap which consisted of substituting Government debt with the bank by shares of private Sector units held by the Government, thereby eradicating at one stroke the massive interest burden of the Government. The Prime Minister was: extremely taken up with this idea and him sought a meeting in future with us at which he promised that he and the Finance Minister would be present The Prime Minister appreciated our role and contribution in the growth of the economy and he blessed us. He further pledged his total support, and asked us to fall back upon him in the event of any difficulty faced by us. He also told‘us that his doors were always open to us. By this time, Satpal Mittal had asked for the bag containing Rs 67, 00,000/to be brought in. We immediately realized that in our excitement in meeting the Prime Minister we had forgotten to hand over the keys of the suitcase to Manmohan who subsequently delivered it to Khandekar. On the same day, Mohan Khandelwal withdrew at different times as sum of Rs 25,00,000/and a sum of Rs 20,00,000/from my account in ANZ Grndlays Bank, Parliament Street branch. Out of this sum, Rs 12,00,000/was adjusted against the amount which he had delivered to us at the Holiday Inn Hotel and the balance of Rs 33,00,000/was delivered by him to Sunil Mittal according to the instructions of Khandekar.

I say that lam making this affidavit, voluntarily of my own free will for purpose of setting the record straight m respect of the cash withdrawals about which my explanation has been sought by the CBI and the Income Tax authorities. I further state that whatever I have stated hereinabove is to the best of my knowledge. Signed, Harshad Mehta (Dated 2/24/93, Bombay).

Article extracted from this publication >>  June 25, 1993