The Shadowy World Of Arms Dealer Sanjay Bhandari

Finance ministry officials are still grappling with the mountain of evidence une­arthed. Bhandari, the documents seized showed, had a range of high-level contacts, was in possession of classified documents from the defence ministry and also had properties in the UAE and London, as well as a Panama-based company. For the media, the focus remained largely on his Vadra link. Among the hundreds of e-mails sieved by sleuths were exchanges with Vadra over an apartment in London. While the I-T department and Enforcement Directorate (ED) have asked the UAE and UK for ownership details and Vadra’s lawyers have den­ied ownership or links to the central London property, the issue has become a political slugfest, with the Congress acc­using the BJP of making up such cases to finish the Gandhi family.

Local land records show a British couple owning the property since 2005. Yet the Bhandari cache of e-mails refer to the same property—Flat 12, Bryanston Square, London W1H 2DN. When sleuths raided his office in Defence Colony and houses in Greater Kailash, Bhandari managed to clean out his computer. The sleuths were lucky, for they found he’d copied all his e-mails to his secretary. It’s the e-mail trail between Vadra and Bhandari that’s vexing tax sleuths and the ED. Did Bhandari own the property under a fictitious name? Why did Bhandari’s London aide, Sumit Chaddha, e-mail Vadra’s secretary regarding payments for renovation being undertaken there? Vadra himself is quoted in one e-mail saying he would “look into it”. In fact, Bhandari’s statement to the I-T department says he is still to verify ownership of the properties by going through his pap­ers, but he hasn’t denied knowing Vadra. The ED is investigating leads pointing to the flat in Bryanston Square having been sold to Mayfair Investment FZE, a company incorporated in the UAE on June 18, 2010, for approximately Rs 19 crore. According to records, the company has a Sharjah address: Post Office Box No. 49304, Hamriyah Free Zone.

Bhandari’s statement to the I-T department says he’d bought the UAE property using bona fide funds. The ED is now probing the source of those funds. Vadra’s lawyers told Outlook their client “does not own, directly or indirectly, a house des­cribed by you as No. 12, Ellerton House, Bryanston Square, London” and that Vadra and his assistant “have not entered into any transaction of a financial nature with Mr Sanjay Bhandari and are not even aware that Mr Sanjay Bhandari is involved in any defence transaction”. Finance ministry officials say, “The primary purpose is to ascertain whose money was used to buy these properties and for whom.” What dilutes the Vadra angle is that the BJP government has been systematically attacking the Gandhi family, as was the case in the Agusta scandal, in which a lot of accusations were made and constantly aired but nothing was proved. Sonia took the latest controversy head on, calling Modi a “shahenshah” and demanding an impartial inquiry. “Doodh ka doodh aur paani ka paani pata chal jayega (the truth will come out),” she told reporters in her constituency, Rae Bareli. The Congress believes the government is now targeting Priyanka Gandhi, who may be its face in the Uttar Pradesh elections. Vadra, thanks to his earlier land deals, is a soft target.

There is, however, much more to the Bhandari saga. He is also under the scanner for suspected ownership of another apartment in London, at Bourdon Street, bought for Rs 10 crore in 2013, and ano­ther flat at Jumeirah, Dubai, bought in 2010-11 for Rs 5 crore. I-T officials say he’d also set up a company in Panama. This is all part of an I-T dossier sent to the ED. What makes everything murkier are Bhandari’s connections and clout in the defence ministry and with politicians and ministers in the NDA government. A number of sensitive files were found—some of them classified—in the raids and sent to the defence ministry for verification. The Intelligence Bureau is now inv­estigating how they reached his office.

It’s clear the present government knew of Bhandari’s links with politicians. An old top-secret note of the home ministry acc­essed by Outlook says, “During the past, L.K. Advani and Robert Vadra visited his residence. Sanjay also boasts of his closeness with Shiela Dikshit, CM Delhi, and claims that he had been talking to her over the telephone once or twice every week positively.” Reacting, Advani’s spokesperson told Outlook, “I have never seen him at the Advani residence all these years.” Sheila Dikshit’s reaction was: “Hundreds of people come to meet me daily. I may have met him, but have no idea who he is.”

Call records between Bhandari and his associates also show he made several calls to senior BJP leader Siddharth Nath Singh and was in close touch with him. Singh told Outlook he has spoken to Bhandari only 45 times over the last year. But the call record details (CDRs) accessed by Outlook tell a different story. There are 164 calls made over a 2G network and officials are verifying other call details over a VoIP network. Singh says he was in touch with Bhandari as he was a social acquaintance but did not know of the nature of the business Bhandari was in. “I have known him as a family friend for several years and even attended his daughter’s wedding. I knew he was very rich, but I thought his business was in refining.... I came to know what his real business was only after the raids.”

The Congress, beleaguered by the AgustaWestland expose, was quick to seize the opportunity. “When the BJP associates with arms dealers, it is glorious social acquaintance. The government is complicit in selectively leaking to the media. The dirty tricks department is working overtime,” said spokesperson Anand Sharma. Civil aviation minister Ashok Gajapathi Raju’s OSD, Appa Rao, was another officer in touch with Bhandari. There is a photograph showing Bhandari standing next to the minister at an aviation expo. Appa Rao told Outlook, “This is a purely professional relation. There is no personal link. He met the minister three or four times and in this connection I was in touch with him.” Bhandari had made at least 355 calls to Rao. The CDRs also reveal that he was in touch with a number of bureaucrats from various ministries. The MHA report says Bhandari has been “using the services of Dr P.K. Vasudeva, retired defence scientist from DRDO”, apart from other retired defence personnel. Shishir Gupta, a senior editor with Hindustan Times, is also under the scanner. CDRs show 478 calls to/from Bhandari. He declined to comment but these could have been made in his professional capacity. There are also a number of calls from Bhandari to the head of a plane-charter company.

Bhandari’s main focus was defence deals. What is of concern to investigators is how he brazenly got documents from the defence ministry. The MHA report says, “According to another input, one Nafe Singh levelled serious allegations against S. Bhandari, in which he blamed Sanjay for stealing the file in respect of purchase of 126 fighter planes and the file went missing from the ministry and was later recovered on the road. S. Bhandari had been blamed to have his links with F-16 and F-18 contenders and was made responsible for the leak of photocopies of the file to the above mentioned American contenders.” During the raid, secret documents that should never have left the defence ministry were found at his Defence Colony flat. The home ministry has forwarded these papers to Sena Bhavan to check whether there is a violation of the Official Secrets Act. Some of these documents refer to the “15th internal CNC meeting for six additional flight refuellers”, proposals put up before the defence acquisition committee and various proposals for acquisitions sent to the defence procurement policy wing.

Bhandari’s main company in the defence business is a consultancy firm called Offset India Solutions Pvt Ltd. Tax authorities are probing his Standard Chartered bank statements and payments made in two tranches to this company in August and in October 2010, two years before the IAF bought 75 Pilatus basic trainer aircraft from the Swiss for Rs 4,000 crore. The payments of 2,50,000 Swiss francs and 7,50,000 Swiss francs were made from the Zurich branch of UBS Bank to the OIS acc­ount number 52105058250. The remitter was Pilatus Flugzeugwerke AG. It was after this deal that Bhandari actually came into the limelight. Was the money meant for the offset business of Bhandari or was it kickbacks? (Defence offset agreements are arrangements in which the seller of a product or service agrees to buy products or services from its client as an inducement. These agreements are legal trade practices in the aerospace and military industries, but seen by some as protectionist and distorting of competition.) A major share of offsets for Pilatus was bagged by BEL. Bhandari got into the offsets business after a policy change in 2006 by which it was mandatory for foreign firms bagging defence contracts in India valued at Rs 300 crore and above to plough back 30 per cent of the contract value into India for procuring goods or services.

The home ministry report describes Bhandari as a man who “keeps his movements and his business matters a closely guarded secret”. He does not allow even his driver to mingle with others.... People do not know about his business.” Sleuths also found Bhandari to be incredibly tech-savvy. “He had even managed to create a software to break the WhatsApp encryption code,” officials claim. In fact, when taxmen raided him on April 26, Bhandari crushed his SIM card to keep his contact details intact. While speaking to someone does not constitute a crime, a  look at Bhandari’s company profiles would explain why he was in touch with the people he was in touch with. Micromet ATI India Pvt Ltd, registered at the Defence Colony address, raided recently by the tax department, recently got into the business of “providing technology for doppler weather radars for civilian and military application”, according to a rep­ort accessed by Outlook. The question is, is this why he made 355 calls to the civil aviation minister’s office?

Bhandari’s much-talked-about comp­any for defence offsets, OIS Advanced Technology Pvt Ltd, also located in Defence Colony, has a paid-up capital of Rs 1 lakh. Nevertheless, it managed to bag a deal with Pilatus AG of Switzerland, which remitted Rs 33 crore in 2010 to this company. Their holding company is called Avaana Software and Services Pvt Ltd, which has a paid-up capital of Rs 81.55 lakh. This company manufactures mini unmanned aerial vehichle (UAV) systems being used by the DRDO, defence ministry and the railways. It has now sought grant of an industrial licence for the manufacture of UAVs and radio frequency identification devices. He was also linked to negotiations to sell F-16 and F-18 fighter jets made by Boeing and General Dynamics respectively, a deal that eventually went to AgustaWestland.

While investigators hasten the probe into the material the tax raids unearthed, some confusion has emerged. It turns out that there is another Delhi businessman, also called Sanjay Bhandari, who has been mistakenly identified as the arms dealer, with most reports stating that the Bhandari under investigation started off as a dealer in imported cars. The Bhandari who is in the eye of the defence storm is in fact an alumnus of Modern School and the son of a homoeopath who was practising in Daryaganj. The “defence deal” Bhandari began business life with an exp­ort-import business dealing in homo­eopathic and herbal medicines. He has refused to speak to the media, but his int­errogation by sleuths should reveal the manner and means by which he graduated from being a small-time businessman to the ranks of the super rich.

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The Call Centre

Investigators are still trying to decipher Bhandari’s call detail records (CDRs). The list of those he called most frequently is quite intriguing. The most prominent are:

• At least 164 calls to BJP leader Siddharth Nath Singh.

• He was in frequent touch with Pinnacle Aviation, a company chartering planes, which owns five aircraft and a chopper. Officials at the company refused to comment on whether Bhandari was chartering planes for himself or friends. (Bhandari himself is trying to venture into the aviation business with a charter company called Himalayan Helicorp.)

• A total of 478 calls to Hindustan Times executive editor Shishir Gupta. The journalist refused to comment. (Journalists speak to all kinds of people in their line of work).

• A serving army officer, Brig Satish Kukreja, is another officer Bhandari was in frequent touch with. Kukreja refused to comment as well.

• Appa Rao, OSD to the civil aviation minister, says he spoke to Bhandari 3-4 times and it was for purely professional reasons, but records show 355 calls exchanged between the two.

• A substantial number of callers were from those in the legal profession. According to sources, Bhandari was well connected in the Delhi legal-judicial scene.

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The Companies He Keeps

Wheeler-dealer Sanjay Bhandari has woven a wide, wide web of firms

Associated companies

Micromet ATI India pvt ltd

• Registered in 2010

• A-341, Defence Colony, New Delhi Paid-up share capital is Rs 1 lakh

Directors

• Sanjay Bhandari is a promoter with 90 per cent shareholding.
• Bimal Sareen: 10 per cent

Manufactures

• Radars for civilian, military use

OIS Advanced Technology Pvt Ltd

• Registered in 2011

• A-341, Defence Colony Paid-up share capital: Rs 1 lakh

Directors/promoters

• Sanjay Bhandari: 90 per cent equity shares.

• Wife Sonia Bhandari holds 10 per cent equity shares.

Manufactures

• Radars, software, and unmanned aerial vehicles

• Plans to set up factory at Okhla as per documents given to Registrar of Companies. Okhla address, however, found to be false.

Holding Company

Avaana Software & Services Pvt LTD

• Registered office in Nehru Place.

• Paid-up capital Rs 81.55 lakh

• CEO Bimal Sareen, a US citizen

Shareholding

• 50.75 per cent shares held by Sareen

• 9.5 per cent shares held by Bhandari

Company business

• Manufacture of micro and mini UAV systems, software

Other Companies

• Offset India Solutions Pvt ltd Incorporated on February 13, 2008, its authorised share capital is Rs 10,00,000 and its paid-up capital is Rs 1,00,000. Company specialises in management or operation of data processing facilities of others. Directors: Bhandari, Sareen

• SB Hospitality and Services Incorporated on March 21, 2007, its authorised share capital is Rs 10,000,000 and its paid-up capital is Rs 5,275,000. Company is involved in health activities. Directors: Sonia Bhandari and Sanjay Bhandari.