CBI Arrests Former Municipal Commissioner of Panchkula

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Central Bureau of Investigation (CBI), on Thursday, made its first major arrest in a case involving the alleged embezzlement of funds belonging to the Municipal Corporation, Panchkula, from accounts maintained with the Chandigarh branch of IDFC First Bank.The anti-corruption agency arrested Ram Kumar Singh, who was then serving as the Commissioner of the Municipal Corporation, Panchkula."Investigation has revealed that the said account was opened in violation of the extant guidelines of the Finance Department, Haryana Government," the CBI said in a statement.

CBI Probe Revealed

The particulars recorded in the account-opening form were entered in a manner designed to conceal the fraudulent transactions that were intended to be carried out subsequently. Pursuant to an understanding with the accused officials of IDFC First Bank, R.K. Singh, IAS, Commissioner, MC Panchkula, allegedly handed over multiple signed cheques to bank officials through middlemen under the pretext of opening fixed deposits."The funds were debited using these cheques and no fixed deposits were ever created. The debited amounts were diverted to shell entities controlled and operated by the accused bank officials. Misappropriation was carried out with the knowledge and active participation of the then Commissioner and the Senior Accountant of MC Panchkula. The Senior Accountant has already been arrested by the CBI in this case," the agency said.The CBI claimed that Singh played an "active role" in the alleged fraud.The agency also searched Singh's residences in Chandigarh and Karnal and seized documents. On the request of the Haryana government, the CBI took over the investigation from the state's Vigilance and Anti-Corruption Bureau.

What Is the Panchkula Municipal Corporation Funds Scam?

According to the CBI, its probe revealed the misappropriation of approximately Rs 79.46 crore belonging to the Municipal Corporation, Panchkula. The alleged fraud forms part of a larger scam at the Sector 32 branch of IDFC First Bank, in which funds worth Rs 504 crore belonging to eight Haryana government departments were allegedly siphoned off through forged or non-existent fixed deposits and debit notes and routed to shell entities.The CBI has so far chargesheeted 17 accused, including six officials of IDFC First Bank and AU Small Finance Bank, three Haryana government officials, two companies and six private individuals."It may further be recalled that the CBI has also taken over two other cases from the Union Territory of Chandigarh — one pertaining to Chandigarh Smart City (CSCL)/Municipal Corporation Chandigarh and another pertaining to CREST Chandigarh. Chargesheets have been filed in both cases. The CBI has chargesheeted five bankers, one CSCL official and one private individual in the CSCL case; and five bankers, two CREST officials, four private individuals and two companies in the CREST case. Further, one senior IFoS officer has already been arrested in the CREST case," the agency said.On Wednesday, the CBI arrested Navneet Srivastava, a senior Indian Forest Service (IFoS) officer who was then the CEO of the Chandigarh Renewable Energy and Science & Technology Promotion Society (CREST), Chandigarh, in connection with the alleged misappropriation of funds from an IDFC Bank account.The accused was produced before a Special CBI Court in Chandigarh and remanded to three days of police custody."The arrest was made after his role was revealed during the ongoing investigation. Investigation revealed that funds parked in three CREST bank accounts maintained with IDFC Bank, Chandigarh, were fraudulently diverted to various shell companies and converted for personal use by the beneficiaries, causing a loss of approximately Rs 75 crore to CREST while he was at the helm of affairs," the CBI said."Investigation further revealed that part of the proceeds of crime was diverted to the account of a private company where his wife and a close relative are directors," the agency added.Earlier, the CBI had arrested the then Project Director of CREST, Sukhwinder Singh Abrol, and accountant Sahil Kukkar in the same case. Both are currently in judicial custody.On June 6, the CBI conducted searches at six locations as part of its investigation into the large-scale misappropriation of government funds involving IDFC First Bank and AU Small Finance Bank. The case pertains to the alleged siphoning of funds from eight Haryana government departments and two Chandigarh UT entities — Municipal Corporation Chandigarh and CREST Chandigarh.