MBA seats for money: Income Tax dept raids Welingkar Institute of Management’s Director

In raids that stretched for almost 48 hours, the Income Tax (IT) authorities over the November 20 weekend searched the residences and office of Dr Uday Salunkhe, Director of Welingkar Institute of Management, Matunga, Mumbai. While it is learnt not a lot of cash was found, documentary evidence has been seized to help with further investigation.

The raids that started on Saturday were apparently spurred by a lone complaint filed by a student last year, that of being charged illegal capitation fee for a seat in the institute’s MBA-equivalent program. However, this complaint was made a year ago during the 2009-10 admission season but for want of time and other pressing matters, no action was taken then. This student was persistent over the months and so the decision to raid was finally taken, said an IT official on the condition of anonymity.

The Income Tax raid was spurred by allegations that Dr Salunkhe, an engineer-MBA and a PhD who holds important positions at the Mumbai University, was charging capitation fees and admitting students through the backdoor instead of through the normal process of entrance exams and interviews. IT officials were not willing to admit or deny that Salunkhes bank lockers in both Pune and Mumbai had been sealed. One IT official told us that the Director had totally denied amassing any ill-gotten wealth and had claimed that whatever wealth was seized from his residence or the Welingkar campus belonged to the trustees of the institute. IT officials have also questioned some more staff of the institute.

According to sources, the board of trustees of Welingkar Institute of Management have been embroiled in bitter rivalry since some time. There is already an issue brewing among the trustees and some licenses were revoked a couple of years ago when similar raids were carried out, added the IT official. In 2004 and in 2008, the IT department had carried out similar raids and discovered irregularities in the trusts functioning.

Both the IT officials as well as sources from Welingkar Institute of Management told PaGaLGuY that the raids were linked to the internal rivalry among the institutes board of trustees. “For years now, there have been factions in the trust and all these raids have happened at a time when elections in the trust are round the corner, said an official from the college, implying that such tipoffs to the IT department were part of the rivals’ gameplans against each other.

It is easy to target Dr Salunkhe since Welingkar Institute is the most famous of all the institutes run by this particular board of trustees and nets in the highest revenue. Those who want to gain control will naturally want to target Dr Salunkhe, the official added.

LN Welingkar Institute of Management Development and Research is part of the Shikshana Prasaraka Mandali, Pune. The charitable trust SP Mandali manages 43 educational institutions in Maharashtra including the well-known Ruia College and Poddar College in Mumbai.

While media reports have stated that huge sums of money were found in the residences of Dr Salunkhe and some of the other Welingkar staff, IT officials refused to confirm or deny it. We cannot tell you what we have found or its quantity but it is enough for us to investigate further. IT sources told PaGaLGuY that had the raids been carried out during the admissions season, may be the find would have been different.

For now, the IT officials are concentrating on unearthing clues from documents and email correspondences of the institute. Further evidence garnered through such investigation will decide the future course of action.

Emails and other important correspondence is usually stored in servers abroad which make our job difficult. But we have learnt to combat these issues as well, said the IT official. The IT person adds that what they have got as evidence until now could probably be just the tip of the iceberg.

The IT official, from his experience in dealing with such issues, said that in IT violation cases related to education, things get complicated as so many educational institutes are run by politicians or influential people who find it easy to flout the law. And besides, there are those institutes not run by government and do not get government aid. If these want to start something new or advance the existing facilities, they dont see any way out but to charge capitation fees. Since capitation fees are not legal in our country, people find alternative ways to collect them.

Rajasthan-based Atul Bapna, who is a career counsellor and is also in the business of facilitating management quota seats says that except for very few b-schools, most in the country charge capitation fees.

There is a management quota in every b-school and use is made of that quota to get in the revenue for the college. It is a well-known fact. These things become an issue only when some student or parent does not get the admission at the discussed rate and decides to take action. Such raids does not affect the functioning of any institute. Capitation fees are here to stay,” he says.

Bapna adds that the process of admission via the capitation fee route is carried out behind closed doors in these colleges. Lack of transparency in b-schools’ functioning aids such activities.

The day the raids were carried out, was also the convocation day for Welingkar Institute of Management’s 2010 graduates. Apparently, Welingkar officials had discussed this with the IT officials who first agreed to let the convocation happen. However, the institute and the officials could not sustain that agreement and the convocation got cancelled. We had students coming from all over the world. They had to just go back. When we were told that we had to cancel so we sent SMS, called and emailed as many as we could to not come to the institute that evening, but so many still did, said an official from the college.

PaGaLGuY spoke to students on the Welingkar campus at Matunga. One of them said that while there was a concern among the students about the IT raids, it had not affected their lecture schedule or studies. Yes, we are wondering what is happening but we are not directly affected by it. Our lives as students are going on as usual.

There has been no official mail from the institute to the students explaining the current situation. Officials from Welingkar said that any such communication is sent out only by the Director.

When PaGaLGuY visited the campus on Wednesday, it seemed its usual busy self. There were no hushed tones to be heard nor any alarms on the faces of students. Only that the security officials seemed extra cautious and kept me waiting at the security office for a while until the institute gave a green signal for me to enter. Ostensibly, the security guards were given strict instructions post the raids, to not let in unknown faces, lest they turned out unfriendly too.

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