Abdul Karim Telgi produced and supplied counterfeit stamp papers to top corporations and banks with help from bureaucrats, politicians, and the police.
The scam was worth up to ₹30,000 crore and lasted for 10 years.
The case has pointed out vulnerabilities in India’s regulatory and administrative systems, raising questions on transparency, accountability, and systemic corruption.
Hot on the tails of the 1992 Harshad Mehta Scam, the Telgi Scam, or the Stamp Paper Ghotala, shocked readers when news of it first broke in 2003.
The scam was run by Abdul Karim Telgi, who produced and supplied counterfeit stamp papers to top corporations and banks with help from bureaucrats, politicians, and the police. The nearly ₹30,000 crore scam lasted for around ten years, from 1994 to 2003. 54 people were arrested, including several politicians and police officials.
The case has pointed out vulnerabilities in India’s regulatory and administrative systems, raising questions on transparency, accountability, and systemic corruption.
Abdul Karim Telgi was born in Karnataka, July 1961. He was the son of Indian Railways employees Ladsaab and Shariefa Telgi. Telgi’s father died while he was still a boy. His death took a strain on the family; His mother’s income was enough to sustain them but not enough to continue Telgi’s education at the same time.
Telgi began to hawk fruits and vegetables at Khanapur railway station where his mother worked. He used the money to sustain his education at Sarvodaya Vidyalaya Khanapur, while saving what little he had left for college. He completed his B.Com. from Gogte College of Commerce, Belgaum, in 1984.
Telgi, it can be said, always had big ambitions. After graduating, he moved to work in Saudi Arabia for seven years before returning to Mumbai. While the exact details of his time here are unclear, it is likely where he first learned the ins-and-outs of the bureaucratic system and its weaknesses.
Telgi moved into a guest house in Colaba and began working as a travel agent. Before long, he started his own business, Arabian Metro Travels, focussed on exporting manpower to Saudi Arabia. This was also his first step into the world of white-collar crimes.
The time saw a boom in labour exports, with thousands of unskilled workers setting their eyes on the Gulf in hope of better prospects. Telgi sensed an opportunity. Through his company, Telgi produced fake passports and travel documents that helped these labourers pass swiftly through immigration checks – called ‘pushing’ in the business.
But soon after, in 1991, he was arrested by Mumbai police on charges of forgery and cheating. He would spend the next three years in jail. It was here that he met Ramratan Soni, a stockbroker who had been charged with forging share papers. Soni introduced Telgi to the art of counterfeiting, and by the time the two were out of jail in 1994, they had a plan.
Stamp paper is a type of government-issued document that makes agreements legally enforceable. They act as proof of payment, coming in denominations like ₹10, 20, 100, 1000, up till ₹25,000. Essentially, they function as legal tender. They were also the central point of Telgi and Soni’s plan.
Making use of Soni’s connections in the worlds of business and bureaucracy, and Telgi’s experience in forgery, the two began to produce and supply counterfeit stamp papers. Telgi would wash cancelled papers with chemicals before Soni would distribute them across his network.
Stamp papers are supplied by licensed vendors who take a small cut from each transaction. Telgi and Soni leveraged this practice – frontmen from their network would approach big corporations, undercutting their competition. While most suppliers would provide discounts of only about 2.5%, they would go as high as 5%.
The duo bribed and employed a number of officials – police, politicians, bureaucrats – to develop their operation. Though there was a shortage of stamp paper at the time – something they made use of – they also created an artificial shortage through their contacts at the Indian Security Press in Nashik, which produced official government documents like passports, security documents, and, of course, stamp papers.
Eventually, they expanded their operation. Telgi bought a decommissioned printing press from the Indian Security Press in a rigged auction, and through his connections inside, procured several plates used to print stamp papers. As a result, Telgi’s stamp papers were “real in spite of not being real,” a police official told The Hindu.
But at the height of the operation, in 1995, Telgi was arrested by Mumbai police in a case of cheating. They had discovered a bundle of stamp papers believed to be fake, but upon further investigation, learned that they were genuine, it was just that their source could not be traced. This raised some serious questions against Telgi that could revise his charge of cheating to the more serious forgery. But that never happened, and soon after, Telgi was let free.
According to Sanjay Singh, the journalist who came out with the breakout story on Telgi, he had recruited several officers and politicians into his scam by this point. Once Telgi was out, his operation boomed like never before.
The operation, which at first was centred around Maharashtra, Andhra Pradesh, and Karnataka, then spread to Delhi, West Bengal, Rajasthan, Gujarat, Haryana, and Madhya Pradesh. His network of agents numbered around 300 at its peak, and the scam was estimated to be worth anywhere from ₹300 crore to ₹30,000 crore.
The operation was well planned and tightly organized – it was more like a corporate structure than a gang, and plans were laid out in detail and well in advance. Telgi also took great care to protect himself. Over the course of his operation, he spoke to many high-profile government officials over the phone, recording almost 100 hours of conversations. He made sure to include introductions given over the phone in his recordings, keeping enough information for blackmail if needed.
Telgi’s scam finally came to an end in 2000, when two couriers were caught transporting a batch of counterfeit papers in Bangalore. This prompted a series of raids across the city that uncovered ₹9 crore worth of counterfeit documents. An FIR was registered and Telgi was named, though he was only one of the suspects at the time.
A paper trail eventually led to Telgi who was finally arrested in Bangalore in 2001. He continued to lead operations from jail till 2002, when a second case in Pune led back to him. Public pressure began to mount on the case.
In the past, Telgi had been named in many FIRs, and even jailed twice, but the scam had continued uninterrupted. This time it seemed to be going the same way – neither politicians nor police were eager to pursue the case. It was only in 2003, when Anna Hazare filed a PIL in Bombay High Court, that a Special Investigation Team (SIT) was formed to investigate the matter.
The fallout was monumental – 54 people were arrested including police officers and politicians. Among those implicated were Mumbai Police Commissioner R.S. Sharma, officers with assets worth crores and leaders from the Samajwadi Janata Party and the Telugu Desam Party. Telgi himself named Maharashtra Deputy Chief Minister and Home Minister Chuggan Bhujbal in the case, who was further criticised for defending Commissioner Sharma. Though his name did not figure in the final chargesheet, Bhujbal was forced to resign from his position.
In 2004, the CBI took over the case and submitted their final chargesheet. In 2006, Telgi was sentenced to eleven years in prison by a CBI judge. Soni was sentenced to ten years. Then, in 2007, Telgi was sentenced to a further 30 years in prison. He was fined ₹202 crore, and an additional ₹120 crore by the tax department.
By 2017, Telgi had spent 13 years behind bars. He had been suffering from multiple ailments – diabetes, hypertension, and HIV. On 23 October 2017, Telgi passed away at Victoria Hospital, Bangalore from organ failure, thus closing the chapter on one of the largest financial scams the country has ever seen. [Rh/DS]
