Red River Runs Dry
Demonetisation has paralysed the Maoist extortion economy in Jharkhand. The net is closing on the desperate rebels
But for a specific input, the cops wouldn’t have stopped the two Tata Sumos. Nothing about the two vehicles seemed to arouse suspicion. They were headed towards the Kathikund block of Jharkhand’s Dumka district on the West Bengal border, 305 km northeast of the state capital Ranchi. But the joint team of the Sashastra Seema Bal (a paramilitary force which guards the Indo-Nepal and Indo-Bhutan international borders, besides being involved in counterinsurgency operations) and the Jharkhand police were quite certain about the tip-off.
There were seven people in all, but the police were most interested in the passenger in the back of one of the vehicles. Wearing a muffler, jacket and blue jeans, he was trying to pass himself off as a Bengali. The man in their custody was self-styled Maoist zone commander Jagdish Mandal, with a Rs 10 lakh bounty on his head. A cavity search of the Sumo yielded two country-made kattas, a dozen live cartridges, seven mobile phones and several ATM cards. But under the front seat of the Sumo and the spare wheel lay the real catch—Rs 31.53 lakh in old Rs 500 and 1,000 currency notes. The November 28 seizure was the largest from the Maoists since Prime Minister Narendra Modi announced the scrapping of large denomination notes on November 8.
Official estimates say Jharkhand’s Maoists (with a cadre of over 2,000 spread out among 17 splinter groups) used to run an extortion empire worth Rs 200 crore annually. The cash essentially allowed them to run their jungle fiefdoms. It bought arms and ammunition, medicines, funded the legal cases of jailed comrades and helped their urban operations besides, of course, paying salaries.
The demonetisation move has, for now, paralysed this underground economy. The panic was evident as the insurgents even started travelling out of their jungle hideouts in a bid to try and get their currency caches converted into legal tender before they were rendered useless.
The desperation has yielded a harvest of tip-offs. With Mandal’s men scouting around for bank account holders to deposit the cash, police informants got cracking. Mandal, the self-styled zonal commander of the East Bihar-Santhal Parganas region, was intercepted as he was moving his stash to be distributed among the two dozen
‘volunteers’ identified by gang members. “We also launched a sustained campaign in areas of their influence, asking villagers not to deposit Maoist money in their accounts,” says Jharkhand IG (Operations) Manvinder Singh Bhatia, who heads the anti-Maoist operations. A senior income tax officer in Ranchi also confirmed reports of Naxalites forcing ordinary citizens to deposit extorted money in their accounts. “Either way, the money is back in the system. We are procuring details, and readying to ask questions,” he says.
The Communist Party of India-Maoist was formed in September 2004 with the merger of two ultraleft groups, the Andhra Pradeshbased People’s War Group and the Jharkhand-based Maoist Communist Centre. But before long, ideological and other differences cropped up and today Jharkhand itself has over a dozen splinter groups with their own cadre and areas of influence. Over the years, ideology also seems to have taken a backseat to the more pressing lure of lucre. Maoist-related violence has resulted in over 2,000 deaths since the state was carved out of Bihar in November 2000. Those who have fallen to Naxal bullets include then MP Sunil Mahato (in March 2007) and two MLAs, Ramesh Singh Munda and Mahendra Singh.
The Maoist threat outwardly appears to be on the wane. There have been no attacks on police stations in the past two years, a dipstick used to assess the level of violence. In reality, however, their activity has lapsed into a languid extortion economy which the Maoists call “levy and
tax”. No one is exempt in their fiefs, from government contractors, businessmen and industrialists to even government servants.
The rate is usually 20 per cent of whatever a contract is worth. ‘Levy’ is a lucrative business in a new state like Jharkhand where infrastructure building is a constant process. Every Maoist ‘area commander’ is expected to raise about Rs 8-10 crore every year. A Maoist collection receipt shows different heads like support, penalty and tax under which the rebels classify the levies they extort.
Jharkhand’s Rs 63,502 crore annual budget for 2016-17 included an allocation of Rs 37,065.35 crore for developmental and welfare activities. In this, the Maoists mostly target the Rs 7,201 crore worth of contracts for building panchayat secretariats, roads and other projects in rural areas. Intelligence Bureau estimates peg the annual levy at between Rs 60 and 80 crore, but top police sources in Jharkhand believe it to be as high as Rs 200 crore.
The lure of easy extortion money is so strong that a former state minister is today accused of floating a private army for extortion. Congress leader Yogendra Sao, who joined as a minister in the previous Hemant Soren government in August 2013, is accused of forming an extortion unit called the Jharkhand Tigers which extorted up to Rs 50 lakh a month. (Sao, currently jailed in another case, was forced to resign in September 2014.)
Just before demonetisation, the Lohardaga police on November 4 recovered Rs 25 lakh and arrested one Rohit Yadav, the brother of CPIMaoist commander Nakul Yadav, as he was taking delivery of ‘levy’ money from two bauxite transporters. “As we probed the links, we found four more bank accounts for Rohit Yadav, with more than Rs 61 lakh in deposits. The accounts have since been frozen,” says Kartik S., Lohardaga superintendent of police.
The state’s unique location—23 of the 24 districts share borders with other states—help the Maoists “shoot and scoot” and also park funds outside their area of operations.
Police say the splinter groups siphon off substantial portions of the extortion proceeds into their own pocket. Some of them even have family members running legitimate businesses like vehicle and construction equipment rentals.
“While CPI-Maoist commanders siphon off at least half the extortion proceeds, their splinters like People’s Liberation Front of India (PLFI) and Tritiya Prastuti Committee (TPC) are nothing but criminals posing as Naxalites,” says Bhatia. “They are in it only for the money.” Of late, this has also fuelled internecine wars among prominent groups like the PLFI, TPC, Jharkhand Prastuti Committee (JPC) and their erstwhile parent, the CPI-Maoist. It made up 74, or nearly half the 155 fatalities in Left-wing extremist-linked violence, in 2014-15. The worst fratricides have pitted the Maoists against the TPC and PLFI.
AFTER THE NOTE BAN
The post-demonetisation currency seizures have, for the first time, given police officials a deeper understanding of the Maoists’ extortion network and how it has fed off an insurgency that predates the 16-year-old state. Police had an early indication of the cash chaos among the Maoists just a day after demonetisation was announced. The rebels started using petrol pumps
and bank accounts to clean up their cash, money laundering routes which have now become commonplace across the country.
On November 9, Ranchi police recovered Rs 25.38 lakh, all in bundles of Rs 1,000 currency notes, from a petrol pump owner and his three associates, as he was about to deposit the money in various bank accounts of the State Bank of India’s Bero branch. The money was traced to PLFI chief Dinesh Gope, 35, an army deserter who formed the outfit in 2007, attracting other cadre of the CPI-Maoist.
The money was the first instalment of a Rs 1 crore stash that Gope (said to be hiding somewhere on the Jharkhand-Odisha border) wanted Chandrashekhar to deposit in various bank accounts. “The Naxalite leader obviously thought a cash deposit by the owner of a petrol pump would not raise eyebrows,” says Ranchi SSP Kuldeep Dwivedi.
This is not the first time Maoists have used legitimate channels to launder their loot. In April 2015, police froze eight bank accounts belonging to Parmeshwar Ganjhu, commander of the TPC, another splinter group. Ganjhu and his wife Yashoda Devi had opened these accounts and police discovered cash transactions of over Rs 1 crore within four months in Bank of India’s Tandwa branch. Maoists began shying away from banks after this incident, but now they seem to have run out of options.
Post-demonetisation, I-T sleuths and police have also unearthed Rs 11 crore parked in five bank accounts of Bank of India’s GB Road branch in Gaya district of Bihar, which borders the Naxal-infested Jharkhand districts of Hazaribagh and Chatra. The amount, said to be black money deposited in old notes post-demonetisation, may have a link to the rebels.
The sleuths are also investigating another 50 accounts and expect the
THE RATE IS USUALLY 20 PER CENT OF WHATEVER A CONTRACT IS WORTH. EVERY MAOIST ‘AREA COMMANDER’ IS EXPECTED TO RAISE Rs 8-10 CRORE A YEAR
tainted amount to cross the Rs 100 crore mark by the time probes conclude. A cotton mill owner in Gaya is believed to have opened these accounts in which scrapped Rs 500 and Rs 1,000 currency notes have been deposited. He is suspected of depositing Maoist money that was routed from Jharkhand.
The demonetisation has come as a major setback for the Maoists. Many of their fronts and bank accounts have been exposed, and the cops have seized over Rs 1 crore in cash alone. A detailed assessment of the various suspect deposits is sure to reveal more details on where the rest of the ill-gotten money has been parked. That said, for the Maoists, this is most likely only a temporary setback. Indeed, latest reports suggest they have already started extorting in new currency notes. On December 19, the Chatra district police arrested a stone crusher unit employee at a highway motel, as he was waiting for a Maoist agent to come and collect Rs 7.4 lakh in new currency. Having realised the drop point had been exposed, the latter did not turn up to collect the money.
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RECEIPTS PAN CARDS CHEQUE BOOKS WEAPONS LOHARDAGA SP KARTIK S. DISPLAYS THE CURRENCY, GUNS AND OTHER MATERIAL SEIZED FROM ARRESTED NAXALITES AT HIS OFFICE