The RiseOf King Koda: and the Mouse trap of High profile of Criminals

The Rise And Fall

FROM A LABOURER TO CHIEF MINISTER TO CEO OF CORRUPTION INC.

Photo: RAJESH KUMAR SEN

ON THE outskirts of the nondescript Chaibasa town in mineral-rich Jharkhand, the primarily tribal population often enjoys its evening rice beer with a traditional dance. Last week, however, the unrelenting drumbeats did not throb with excitement: rather, they seemed to be heralding the fall of a political raja.
As newspapers, FM stations and news channels flooded the state with its secondbiggest news story — the first, obviously, was the elevation of local Ranchi lad Mahendra Singh Dhoni as captain of India’s cricket team — most citizens of this fledgling state wondered whether former chief minister Madhu Koda (pronounced Kora) could possibly weather this storm.
As sleuths of the Enforcement Directorate (ED) and the Income Tax (I-T) Department raided his plush residence in Ranchi’s Morabadi neighbourhood, as well as company offices across the country, Koda used the usual tactic to avoid questioning: he complained of pain and high blood pressure and took refuge under an imported quilt in Ranchi’s ultra-modern Apollo Hospital.
Charged with laundering a whopping Rs 4,000 crore through hawala transactions and secret bullion trade, Koda stands accused of having a business empire, from Africa to Dubai to Mumbai, ranging from mines in Liberia to bullion companies in Mumbai and a hotel in Thailand.
Who is Madhu Koda? A farmer’s son, born in Patahatu village in West Singhbhum district of Bihar, Koda was educated in the village school and had never seen the glitzy city life. He had grown up in deep forests and hills. His father, a worker at the Indian Iron and Steel Company (IISCO), who now farms a small plot in the village, wanted him to join the police, but Koda was not interested. “He wanted to be in politics and, one day, rule the state,” says Ashutosh Sinha, a Chaibasa resident who worked with Koda in his formative years. “He knew the state and what it could offer to someone who runs it.”
From a labourer who worked on window grills and in iron ore mines till the 1990s, and who went on to become the state’s first independent chief minister, Koda’s career certainly reveals a man in a hurry to board the gravy train. He joined the Bharatiya Janata Party (BJP) in 1994, when the Congress was seen as a declining force in tribal politics in the region. He got a ticket to contest the Bihar assembly elections in 2000 and became a minister (for panchayati raj) after Jharkhand was carved out of the state later that year.
As a minister in both the Babulal Marandi (Jharkhand’s first government, in 2000) and the Arjun Munda governments (2003 to 2005), Koda seems to have found the key to ministerial contentment. The fact that he snagged the coveted mines and minerals ministry is significant: control over a state’s mineral resources, especially when metals and minerals fundamentally represent that state’s major source of wealth, confers tremendous discretionary powers to the minister.

Raided Armed policemen guard a house belonging to Koda in Lucknow Photo: AJAY SINGH

Clinching proof? I-T officials carry sackfuls of evidence from Koda’s Ranchi home Photo: RAJESH KUMAR SEN

IN THE 2005 assembly elections, when the BJP denied Koda a ticket, he quit the party, contested as an Independent from Jaganathpur, his former constituency — and won. Although he agreed to support the BJP in forming a government in the state, under Munda again (and once more got the mines portfolio), in 2006 he and three other independent legislators withdrew support, bringing down the government. He gathered support from the Congress, RJD supremo Lalu Yadav and ‘Guruji’ Shibu Soren and became chief minister himself.
The numbers pertaining to his fabulous wealth are simply astounding. ED and I-T officials — who flew in from Delhi, Kolkata and Patna to conduct the raids — say that they have incontrovertible evidence to nail the former chief minister and his associates, whose interests range from cricket to real estate to commodity trading. “We have clinching evidence against him and his hawala trading,” AK Srivastava, additional I-T commissioner, told TEHELKA.
On paper, there’s evidence that shows Koda invested $1.7 million (Rs 8.5 crore) to purchase coal mines in Liberia in the name of his close associates; that he owns bullion trading companies in Mumbai, real estate in Rajarhat and the expensive Burdwan Road neignbourhoods in Kolkata, flats in New Delhi’s up-market Shanti Niketan and Anand Lok colonies and even a two-star hotel in Thailand.
And that’s just for Koda himself. His close associate, Binod Sinha — once a tractor mechanic who helped his father sell pumping sets in Chaibasa — invested almost Rs 250 crore in another 11 companies in India and acquired properties for the curly-haired Koda. When asked, Sinha told the investigators that he worked on behalf of Koda because the latter had a speech impediment and rarely spoke, both at home and in the state Assembly.
AND COMPLETING the power troika is Sanjay Chaudhary — a former seller of chewing tobacco and now Koda’s Man Friday, whose love for Ray-Ban sunglasses and routine jaunts to the sun-soaked beaches of Thailand’s Koh Samui island along with Koda were folklore in Ranchi. For the record – that’s what the evidence shows till now — Chaudhary owns 14 companies in India and two in Dubai. In fact, Chaudhary, with property worth Rs 200 crore in and around Ranchi, set up two companies in Dubai to handle Koda’s global investments in steel and mining operations in Thailand, Liberia, Malaysia, Hong Kong and South Africa.
Also under the ED scanner is Balaji Bullion, a small company that traded in gold and silver from Mumbai’s Zhaveri Bazaar, and had people with connections as directors. I-T officials say they have evidence of illegal purchases of bullion and diamonds and of funnelling cash through hawala for investments in at least two Dubai-based companies. Balaji officials, when contacted, denied any involvement. “We have got no notice from either the ED or the I-T department,” said an official.
Sinha is the key accused in the hawala scam and the man the ED has named as the point person handling Koda’s cash in Balaji. ED officials say Sinha had transactions worth Rs 1,400 crore in Balaji and had also purchased the defunct Indo- Asahi company and given a loan of Rs 25 crore to another company. In fact, he wanted to raise enough money to acquire an Indian Premier League cricket team. “Koda is a good friend and I have travelled abroad several times with him. But this entire scandal is politically motivated, ahead of the Assembly polls (scheduled for November 25),” Sinha told the Sadhna news channel.
And despite evidence against him and his cronies piling up, Koda too remains unfazed. “I am innocent and I am being framed,” he told a motley group of reporters. A similar reaction came from his father who told a local news channel that his son was being framed.
BUT DESPITE putting up a brave face, Koda admitted to many things, including foreign trips during his tenure as minister for mines (from March 2005 to September 2006) without informing then chief minister Arjun Munda. I-T officials believe that it was then that he deposited money in a Swiss bank account. In fact, they have traced a person who allegedly helped Koda deposit the same but withheld his identity in the interest of the investigation.

Humble origins Koda’s father, Rasika, at his village near the IISCO plant in Chaibasa Photo: HINDUSTAN TIMES ARCHIVE

How did Koda create an empire so huge? Where did the cash come from — and what triggered the collapse? ED officials say Koda’s empire ran like a welloiled machine: cash — collected by the state’s all-powerful coal mafia — would be routinely deposited at unknown locations by Koda’s men. They would also hire youngsters, sometimes school students, to count this cash, which allegedly totalled Rs 35 to Rs 50 lakh a day from the coal belt alone. That’s because the coal mafia is said to collect Rs 2 lakh from each of the 20 coal rakes (collection units or wagons) announced by subsidiary companies of the state-owned Coal India Limited (CIL) and also some private companies managing coal patches offered by CIL. This reportedly goes to the man who runs the state (read the CM) and is estimated to add up to around Rs 14 crore a month.
Koda, who was in power for a little more than two years, knew the coal business bottom up. His links with some industrialists from West Singhbhum, who supported his bid to get departments that dealt with iron ore or coal mines when he was a minister in the Munda cabinet, is well known. In fact, his wife Gita reportedly had walked out on him when she saw his earnings dwindling from coal and other minerals. Informed sources say that Koda remained cool and is said to have told his friends: “She will return when she will realise my earnings have gone through the roof.” Koda knew what he was saying. If you are the mines minister, you are the king in any mineral-rich state.
Highly-placed sources in Ranchi and Jamshedpur say earnings from other metals and minerals (iron ore) are more than coal and the mafia actively collaborates with the state government in its daily collections. Instances of such collections across the state have often been documented and presented as evidence to the judiciary by a handful of whistle-blowers from CIL, but the cases have rarely made any progress (seeTEHELKA, May 17, 2008).
CIL insiders told TEHELKA that the ED has also gathered evidence against Sanjay Pasari, a businessman from Kolkata who once was linked to former coal ministers PA Sangma and Ram Vilas Paswan, and now works closely with Koda. Pasari is also said to have developed close links with Tikmani and Rungta, two powerful transport contractors who rule the mines of the state-owned Central Coalfields Limited (CCL), a subsidiary of CIL. “His investments were meticulously thought out and once the decision was taken, his men travelled with cash to seal the deals,” Bihar Deputy Chief Minister Sushil Kumar Modi told reporters in Patna.

Koda, who was in power for a little more than two years, knew the coal business bottom up

Koda, who insiders say was a protégé of former Bihar chief minister Lalu Yadav, is said to have specifically asked for the mines fortfolio and rejected the education minister’s job in 2005, during chief minister Arjun Munda’s second term. That’s because Koda clearly knew that in mineral-rich Jharkhand, the ATM (anytime money) ministry is the mines portfolio.
But there is also evidence that Koda — who loved his blue jeans, jackets, shopping at Gurgaon malls and Bangkok visits with Sinha and Chaudhary (there is also Arvind Vyas and a hawala conduit, Manoj Punamia) — misappropriated funds meant for poverty alleviation schemes during his tenure as panchayati raj minister. There was just so much cash floating around that Koda’s men routinely gifted hundreds of rupees to the poor students who were brought in to count the moolah.
Appositely, it was one such open display of arrogance — from Chaudhary — that is supposed to have spelt doom for the Koda Corporation. He actually checked in suitcases filled with cash as baggage for a flight to Dubai. Of course, Chaudhary had meticulously wrapped the bundles of cash in a foil used to pack film sheets. Unfortunately for him, this could not hoodwink the customs authorities in Mumbai. Chaudhary was caught with nearly Rs 2.5 crore in cash and detained in the city. At first there was pressure to release him — from a top Mumbai functionary of a major political party whose son is also on the board of Balaji Bullion, ED officials told TEHELKA.

Youngsters were hired to count the cash collection from the coal belt – almost Rs 50 lakh daily

It worked. And after being released, Chaudhary escaped — in fact, he is still absconding — but incensed Customs officials then alerted the ED and I-T officials. And the chain reaction eventually led to Koda and the public exposure of his huge illegal interests.
And as former colleagues — and now his opponents — in the BJP point out, “Once you have tasted blood, you keep changing your options,” says Modi, who has demanded a probe into a “nexus” between Koda and Lalu Yadav, the RJD boss who has several fodder scam cases against him being tried in Jharkhand courts.
Political observers say it would have been a tribute to Indian democracy if Koda’s journey — from labourer to chief minister — had not foundered. “He showed a lot of hope when he first came into politics, but corruption overtook everything,” says CPI leader D Raja.
The result is that the chilling chronicle of unmitigated greed has grievously damaged the reputation of both Koda — and the mainstream political parties who allowed him to function unchecked.
Was it because they considered him a great political asset that the BJP and Congress allowed him to carry on his hawala transactions and investments across India and the world? Or have these countrywide raids resulted because Koda crossed what is called — in the corridors of power — an accepted line in the level of aggrandisement allowable to politicians?