In a major breakthrough in the Rs 83-crore Chandigarh Renewable Energy and Science & Technology Promotion Society (CREST) fraud case, the Central Bureau of Investigation (CBI) has arrested senior Indian Forest Service (IFS) officer Navneet Kumar Srivastava, the then Chief Executive Officer of CREST, for his alleged role in the diversion of public funds from the society’s accounts maintained with IDFC First Bank’s Sector 32 branch.
Srivastava, who had earlier been suspended by the Centre on the recommendation of Punjab Governor and Chandigarh Administrator Gulab Chand Kataria, was this evening produced before the Special CBI Court in Chandigarh, which remanded him to three days of CBI custody for further interrogation.
The arrest marks the first action against a senior Chandigarh Administration officer in the case and comes amid the CBI’s widening probe into what investigators believe is part of a larger network behind the multi-crore frauds involving Chandigarh and Haryana government funds routed through the same bank branch.
Speaking to The Tribune, a senior CBI official said the investigation revealed that funds parked in three CREST bank accounts were fraudulently siphoned into various shell companies and subsequently converted for the personal use of beneficiaries, causing an estimated loss of nearly Rs 75 crore to the Chandigarh Administration-run society during the period when Srivastava was heading the organisation.
Investigators further disclosed that part of the proceeds of crime was diverted to a private company in which Srivastava’s wife and a close relative were directors.
The federal agency said Srivastava’s role surfaced during the ongoing investigation after scrutiny of financial transactions, bank records and money trails linked to the diversion of funds.
BIGGEST ARREST IN CREST CASE SO FAR
The arrest is widely being viewed as the most significant development in the CREST investigation since the scam surfaced earlier this year.
The CREST fraud was unearthed after reconciliation of bank accounts maintained with IDFC First Bank revealed around 300 unauthorised transactions. Investigators found a principal shortfall of Rs 75.16 crore and an additional interest loss of Rs 7.88 crore, taking the total loss to Rs 83.04 crore. The probe further revealed that forged bank statements were allegedly sent from official email IDs of bank officials to conceal the fraud for an extended period.
The case forms part of the larger IDFC First Bank scandal that also includes the Rs 117-crore Chandigarh Smart City Limited (CSCL)-Municipal Corporation fraud and the Rs 550-crore Haryana government funds scam. Investigators have repeatedly pointed to common shell companies, overlapping accused and a similar modus operandi across the cases.
EARLIER ARRESTS & CHARGESHEET
The CBI noted that former CREST Project Director Sukhwinder Singh Abrol and accountant Sahil Kukkar were arrested earlier and have already been charge-sheeted. Both are currently in judicial custody.
The agency recently filed its first charge sheet in the CREST case against 13 accused persons, including five officials of IDFC First Bank, two public servants associated with CREST, two shell entities along with three of their partners/directors, and one private individual. All the charge-sheeted accused are presently in judicial custody.
The arrest comes just a day after a Chandigarh court granted default bail to businessman Vikram Wadhwa in the Chandigarh Smart City case on technical grounds related to delayed filing of the charge sheet. However, Wadhwa continues to remain in jail because he is also in judicial custody in the CREST fraud case and the Haryana government funds scam.
WHAT NEXT?
With Srivastava now in CBI custody, investigators are expected to focus on the decision-making process within CREST, the role of senior officials in monitoring public funds, approvals relating to banking operations, and the alleged flow of money to shell companies and beneficiary entities.
The arrest is also expected to strengthen the agency’s efforts to establish accountability at higher administrative levels and trace the ultimate beneficiaries of the diverted funds.
The CBI said it remained committed to conducting a thorough, impartial and expeditious investigation to ensure that all persons responsible for the alleged fraud are brought to justice.
