Chitalias Granted Conditional Immunity

ITCs estranged US-based partners, the Chitalias, have admitted that they have been granted immunity from prosecution by the Indian government in return for cooperating with the Enforce-ment Directorates investigations against ITC Ltd. ITC is being investigated for alleged Foreign Exchange Regulation Act (Fera) violations.

The Chitalias admission in a New Jersey court some weeks ago was corroborated by a senior government official, who admitted that the Indian government gave conditional immunity to the Chitalias last September. The governments admission marks a volte-face on its earlier stand that it had rejected the Chitalias request for immunity.

A senior government source told Business Standard: Yes, its true we have granted conditional immunity to the Chitalias in exchange for information on ITC Ltd provided to us by them. However, the government reserves the right to withdraw this immunity to the Chitalias in future in case it is detected that the Chitalias have withheld important information from us.

The Chitalias have been granted immunity only from Fera violation charges, pointed out government sources. Intriguingly, the Chitalias lawyer, William Handler, initially stated that no immunity was given to them. On further prodding, the lawyer said the Chitalias misunderstood the questions asked in court.

On whether the Indian government had granted immunity to the Chitalias, Handler told Business Standard: There has been no immunity granted to the Chitalias. However, when specifically asked about Devang Chitalias repeated references in the New Jersey court to a document allegedly promising immunity against any prosecution in India made, Handler said his client may have been confused during the questioning and may have inadvertently given the wrong impression on the issue of immunity.

During his deposition before the New Jersey court, when Devang Chitalia was asked if ED special director M C Joshi had shown any documents to the Chitalias, he said, Joshi has given us one. Immunity. That is it.

When asked if Joshi had brought over the immunity letter, Chitalia replied, With him he brought it, yeah. Asked if he had a copy of the immunity letter with him, he said, We must have a copy of that, yes.

When the US court asked Devang Chitalia if he had separately received an indemnity letter proposal from the Indian government, he said, I didnt receive it. It was sent to Handlers office. Asked if Handler had shown him the letter, he said, Yeah, sure. However, when asked if he had a copy of the letter, he said: I dont think I have a copy of that.

To another question if he had entered into an immunity agreement with the Indian government, Devang Chitalia said: Yes. When asked about the time of this incident, he replied: That was when Joshi flew over to the US. When asked specifically about the time period, he said: That was, I believe, in September, second or third week. I dont recall the exact dates.

When asked if the Chitalias have received a signed immunity agreement from the Republic of India, Devang Chitalias answered in the affirmative. He added that he thought he had a copy of the letter in his possession.

When Devang Chitalias court statement was pointed out to Handler, he countered by saying that his client had been talking about a proposal made by ED officials last year. It was a brief outline of a proposal that said immunity would be granted in the event of certain things being done, if certain events happened, he said. There has been no agreement on granting immunity to the Chitalias, insisted Handler.