RAIPUR: Dantewada police have arrested a general manager (GM) of Essar group on charges of paying protection money to Maoists. This is possibly the first time ever that a senior corporate executive has been held on such charges.
DVCS Varma, the general manager of Essar Steel Limited, was arrested from Kirandul, the mining town where the company operates an iron ore beneficiation plant. He was produced before a magistrate who sent him to two days of police custody for further interrogation. The police have arrested him under sections 121 and 124 (A) of the Indian Penal Code that amount to waging war against the state and sedition.
Dantewada police superintendent Ankit Garg also said he was dispatching a team to Chitrakonda, in neighbouring Orissa’s Malkangiri district, to arrest the company’s deputy manager C Srinivas.
The current investigation was sparked off with the arrest of B K Lala, a building contractor of Essar, who was picked up at a weekly village bazaar on September 9. The police claim he was carrying 15 lakh rupees, which he confessed he was delivering to the Maoists through alleged naxalite associate Lingaram Kodopi on behalf of Essar.
Since then, the police served legal notices to Essar as well as Jai Johar, a Jagdalpur based non-profit organisation that carries out CSR activities funded by the company. The co-managers of Jai Johar, two brothers, Pawan Dubey and Narendra Dubey went into hiding as soon as the notice was served. “The fact that they are unwilling to be questioned and are absconding only reinforces our suspicions,” said Garg.
Investigators claim the income of both Pawan Dubey and B K Lala has risen ‘exponentially’ in the last one year, a time period that coincides with Essar’s attempts to repair its pipeline damaged by the Maoists in May 2009. The police believe both the men mediated Essar funds to the Maoists to buy peace.
“We have hard evidences corroborating what Lala has told us,” said Garg, refusing to divulge more details, calling it a ‘sensitive case’.
In a statement, a spokesperson of Essar strongly refuted the allegations, stating, “Such baseless allegations are being made to hurt the image and reputation of the group, which is a law abiding corporate.”
Essar does not mine iron ore in Dantewada but sources iron ore fines from the waste dumps of government mining firm NMDC, mixing them with water and transporting the slurry to the port town of Vishakapatnam through a 267 km pipeline running through Maoist territory in Chhattisgarh and Orissa.
In a background note, the company has claimed its pipeline and plant have been damaged at least 15 times ever since they turned operational in October 2005. The note also pointed out that, “Industries in the area do not have access to any security cover”.
It is widely believed that any group, small or large, that engages in economic activity in Dantewada, whether it is collection of beedi leaves, or road construction, or mining activity, need to pay levies to gain Maoist sanction.
Essar group, the largest private sector company operating in the region, in particular, has been under a cloud since its pipeline cuts through Maoist heartland.
The speculation of the company striking deals with the Maoists got a boost after a leaked Wikileaks cable, dated 11 January 2010, sent by the US consulate at Mumbai, quoted an unnamed Essar representative as stating that the company “pays the Maoists ‘a significant amount’ not to harm or interfere with their operations.” The company denied the allegations.