How 42 gunny bags revealed the web of fraud behind Asaram Bapu’s Rs 10,000-crore empire

The documents – 58,000 leaves of various books, ledgers, scraps, loose pages, pinned sheets and digital data on a computer and digital hard drives – were structured first by a chartered accountant who worked for close to ten weeks with then Surat commissioner of police, Rakesh Asthana. The economic offences specialist put them together, studied them, undid them and restitched them into a 900-page summary with a cover letter that was reported in the media, based on a February 2014 press conference by Asthana in Surat.

“The documents and data show large-scale tax evasion and malpractices by Asaram and Narayan Sai and also (names) a large number of traders, businessmen and real estate dealers. They used black money thus generated for professional and personal gains. Since the matter has national and international ramifications, it should be thoroughly investigated under the Income Tax Act,” Asthana had written in the letter which, along with the documents, he passed on to the income tax department.

The estimated worth of the godman’s empire, excluding his properties, was pegged at Rs 10,000 crore. The income tax department had found a document, dated sometime in 2013, which reportedly said that Asaram had earned Rs 419 crore in a single year as interest alone from the high-value cash loans that he gave.

Bhutada told me that this was the one document that stood out in the pile for her when she went through the papers, which were in English, Hindi and Gujarati. There were rumours of huge amounts of cash to the tune of hundreds of crores, kept close at hand, but this was never found. By the time the documents were properly decoded, it was nearly two years since the discovery of the forty-two bags.

There were investments worth Rs 6,000 crore in various instruments such as Kisan Vikas Patra, mutual funds, government bonds, debt funds, securities, fixed deposits, etc. Other details also surfaced over time, which the media reported whenever the godman was in the news. The income tax department, in the meantime, went through the documents with a fine-toothed comb.

The Income Tax Act allows revenue authorities to assess unpaid tax for six years. The investigation wing at Surat conducted the investigation into the documents while the assessment wing in Ahmedabad calculated the amount of tax Asaram owed to the exchequer. They pieced together an account of how the operation was run. The assessment report, which has been filed with the income tax authorities, runs into 1,914 pages over four volumes, of which one only contains documents annexed to the assessment. The main order itself is around 550 pages, the balance is made up of two elements. One is the annexed documents. The other is an explanation of the methodology used to arrive at the assessment.

The documents in the cache discovered by Shobha Bhutada and the Surat police personnel go back to 1977. The forty-two bags of 58,000 documents were a huge find but none could authoritatively say that these were all the documents pertaining to Asaram’s empire. In fact, there is a suspicion that there might be more elsewhere. Even so, this stack definitely allowed more than a sneak peek into how Asaram operated and how much his empire was worth.

The chief source of income was cash donations made by devotees. The umbrella trust was the Sant Shri Asaramji Bapu Ashram Trust; “everything else is a smokescreen”, is how one investigator described it.

During his deposition to the Justice (retd) DK Trivedi commission, the godman himself said he had more than 400 ashrams. The trust was registered as a religious trust which exempted it from income tax. It was registered under Section 80(g) of the Income Tax Act, which means donations to the trust were exempt from income tax for the payer. At the time of writing this, the income tax department had cancelled these registrations.

The cash donations were collected at the ashrams and at places where satsangs and other events were held. Code words were used for the collection points, for instance, Vyas Peeth or VP meant the place where the godman himself sat and addressed the public. Vyas is believed to be a reference to the sage Vyas. VPL stood for “Vyas Peeth-Ladies”, meaning where the godman addressed women devotees. BDD was an acronym for “Buddh Dakshina donation”, a direct reference to the bodhi tree under which the Buddha is said to have achieved enlightenment. This was also referred to as “Bud Peti” in the books. These places were where the highest cash collections were recorded because of the godman’s presence.

Most of the donations were not entered in the account books and the cash was transported and stored by a select group of aides – at the highest strata of a four-tier system, detailed below. The ordinary volunteer, or even the motley crew of former aides-turned-witnesses, did not have access to, or responsibility of, the huge amounts of cash. Apart from cash, donations were also made in cheques, demand drafts, jewellery, land and foreign exchange.

A person who studied and scrutinised these documents told me that the collection had always been accounted for in informal books, away from the declared income of the trust. “It was a practice that seems to have continued from the beginning, though, they could have easily declared this income. Had they employed some corporate accounting firm, they would have set their books straight according to law,” he said.

So, why employ this roundabout way and deliberately suppress income which was not subject to any tax?

“One reason could be that had it been booked in the trust’s books, Asaram and his cronies could never have used it for any personal gain. Then, the money could not have been invested in the loan business,” he explained.

Asaram’s interest in disbursing loans seems to have begun in 1993-94. Since then, he has given loans to at least 550 people over twenty years. One of the witnesses in the Justice (retd) DK Trivedi commission, Raju Chandak, had deposed that the godman would use a team of goons to threaten borrowers who defaulted on interest payments. The seized documents alone revealed that Rs 3,000 crore had been lent by Asaram, while the income tax department assessed that loans worth Rs 1,500 crore remained active, generating an interest of Rs 700 crore between 2007-13. The rates of interest varied from 1 per cent per month to 2.5 per cent per month.

Six builders were loaned high sums of money. These included a Delhi-based builder who was loaned Rs 200 crore, a Jaipur-based builder-cum-chartered accountant who was given Rs 100 crore, while Sevani, at whose flat the forty-two bags were found, owed the godman Rs 100 crore. The flat was located in a building that had been built as a joint venture between Sevani and a company whose owners were the godman’s trusted aides. Details of the six builders and the other borrowers of cash have been sent to their respective income tax circles for tax assessment.

At the top of the four-tier hierarchy that ran the financial empire was Asaram, supremo of the organisation. The most trusted aide was Kaushik Popatlal Vani, the Nagpur-born former engineer-turned-disciple who was one of the few devotees at the Motera ashram with his own quarters, and who was answerable to none but Asaram himself. It is said that even Narayan Sai had to ask Vani when he needed money for anything – from an enterprise to the most minor of expenses. Financial independence was one of the reasons why Narayan Sai was trying to build his own empire, though his ashram at Himmatnagar in Gujarat is rumoured to have had a more sinister purpose.

Vani was questioned once by the Surat police while they were investigating Narayan Sai, to get a fix on the godman’s empire and other details. Vani came but refused to answer any questions and in the absence of any specific proof, the police could not detain him. While he was with the police, he refused to drink a drop of water or touch any of the food offered to him. In his fifties, Vani is short and slightly built with salt and pepper hair cropped close to his scalp.

Later, when some evidence was found against him, Vani vanished off the face of the earth. He has not been located ever since.

At the ashram, I casually asked about him and was told that nobody knew where he was. Sureshanand, Asaram’s Vedantic understudy who began all his satsangs and, in the godman’s absence tended to the flock and delivered the sermons, disappeared too. I had really wanted to meet him to understand the spiritual side of the godman, but Asaram’s spokesperson, Neelam Dubey, said that he had left soon after the charges in 2013. “He has gone into ekant dhyan (isolated meditation),” is how she described it.

Not exactly below, but after Vani, and almost on the same tier, was Ajay S Sharma, a chartered accountant, who also had extensive knowledge of Asaram’s empire. At the same level was Gaurav Bajaj, considered a computer expert. The third tier included aides such as Meenaketan Govindpatro, Naresh Bhagurmal, Naval Kishore, Laxmikant Dwivedi, Mani Patel, Umesh Totlani and Shobhraj Thakore, a trained CA. Vani was assisted by Dev Kumar, who otherwise belonged to a lower tier but by being privy to the kind of information that Vani had, could be placed in the third tier. In several of the seized documents, these people are identified by their initials.

The fourth tier included those who lived in the ashrams as committed, surrendered volunteers, many of them acting as couriers and delivery people. They had surrendered their lives and will to their guru, clad themselves in white kurtas and pyjamas, and attended to the miscellaneous chores around the ashram.

One such volunteer gave me a lift on his scooter out of Motera as I was leaving the ashram. This person, who would not give his name, said he went to Jodhpur several times just to get a glimpse of his guru. “My mother had gone too, as did my sister, and the police baton-charged them, but my mother told them that she would keep coming, as did I. And, I returned every opportunity I could get. We even performed parikrama of the Jodhpur jail,” he said.

It is important to know about this fourth tier. Asaram’s accounts show that he spent on their clothes, food and other charitable acts while accommodating them at the ashrams. Some had opted to live at the ashram due to poverty, while many came of their own choice. Their surrender to the guru came with a price tag, though.

Of the reams of documents found in the forty-two bags were chequebooks with blank leaves, all duly signed. These belonged to bank accounts opened in the name of volunteer-devotees who stayed at the ashram.

Investigations revealed that these accounts had been opened on the basis of proof-of-address certificates issued by the umbrella trust at the Motera ashram. In fact, all the people had given the ashram as their address and rightly so, since that was where they lived. Scrutiny of the bank accounts revealed that the cheques were used to make miscellaneous payments and many fixed deposits had been made to these accounts. None of them were registered with the income tax department. Spreading small amounts of cash over several accounts helps avoid detection of large-scale financial fraud.

Excerpted with permission from God of Sin: The Cult, Clout and Downfall of Asaram Bapu, Ushinor Majumdar, Penguin Random House India.