The TLDR: The Delhi police cracked a significant oxygen racketeering ring headed by some of the richest residents of the city—who found a way to profiteer from everyone else’s pain. This is a quintessential story about privilege in India. 

Meet the villains

Villain #1: Navneet Kalra. He owns three of Delhi’s most exclusive restaurants: Khan Chacha and Townhall in Khan Market and Nege & Ju in Lodhi Colony—as well as the eyewear chain Dayal Opticals. His establishments attract celebrities and the very wealthy, and he has been extensively photographed with them. The most notable: Virat Kohli—who seems to have been his selfie buddy on multiple occasions over the years:

Point to note: As expected, there was a mad scramble to associate Kalra with various politicians using these photos—including BJP MLA Gautam Gambhir, the Gandhi family, and Arvind Kejriwal. All of these claims are weak on evidence, and the Gandhi-related images are plain old fake news. Also this: Hindutva trolls became overly excited by the name ‘Khan Chacha’—only to be informed that the restaurant is no longer owned by Muslims, but by Kalra who may have cheated the original owners. 

Also this: Kalra appears to have assiduously cultivated a good guy image, claiming to feed over 700 people a day at langars in Khan Market.

Villain #2: Gagan Duggal. He is the managing director and owner of Matrix Cellular—and appears to have helped orchestrate the entire scam while living in London. His claim to fame: his wife Urvashi Kaur is an oft-covered Delhi socialite and fashion designer. She is also the daughter of army chief of staff Joginder Jaswant Singh—who once ran on an Akali Dal ticket against Congress state chief Amarinder Singh in Patiala. 

Irony alert: In an inane Forbes story on farmhouses of the fabulously wealthy, Kaur said: “We live in a one-acre farmhouse, and we have two more nearby, which are used to host large parties or serve as my husband’s workspace.” FYI: 387 oxygen concentrators were recovered from Duggal’s farmhouse. 

The big scam: how it worked

The size of the scam: 

• The initial investigation reveals that between April 17 and May 3, Kalra and Duggal procured 7,500 oxygen concentrators worth Rs 130 million (13 crores). 
• Of these, 5,200 were sold in April, while 1,858 were distributed in early May. 
• Most were bought at the per unit price of Rs 14,000-18,000—with some slightly more expensive at Rs 23,000-24,000. The black market sale price: Rs 70,000. 
• To date, the police have recovered 524 concentrators from Townhall, Khan Chacha, Nege & Ju and Duggal’s farmhouse. To give you some perspective: The US sent 545 oxygen concentrators recently, and it was considered newsworthy.
• Watch a clip of one of the raids below.

How it worked: Gagan Duggal procured the concentrators via his company Matrix Cellular—which makes SIM and calling cards—in December (or maybe October, as per other reports): “All the machines were imported in the name of Matrix Cellular and were collected from the airport after claiming that they were being sent to hospitals,”

In April, he hooked up with Navneet Kalra who then deployed his restaurants as booking and distribution points: 

“The accused used online portals such as Xpect Everything to sell these to families of Covid patients at Rs 70,000-Rs 80,000 a piece. They also used WhatsApp groups and circulated information about their business.”

You can listen to Kalra talking to a customer here:

And this clip shared by a Congressman went viral—allegedly showing the scene outside Khan Chacha when it was doling out concentrators (but we haven’t been able to verify it): 

The arrests: The police first received a tipoff via one of Kalra’s WhatsApp messages giving his account details for a payment. They then put a watch on Nege & Ju:

“During area patrolling, suspicious activity was noted at the outlet which was found open. When enquired, a person was found working on a laptop and handling orders of oxygen concentrator[s] by ‘Xpect Everything online portal.’ During search of premises, 32 boxes of concentrators having capacity of 9 and 5 litres were seized.”

The police arrested four people, including the manager—which in turn led to raids on the rest of the establishments. The most prominent arrest so far: Gaurav Khanna, CEO of Matrix Cellular. Still absconding: Navneet Kalra. Chilling in London: Gagan Duggal. 

The pushback: Matrix has already moved the Delhi High Court demanding the return of the concentrators—calling the raids “a malicious, false and one-sided campaign to vilify the company.” And the company insists there is no hera pheri involved here:

“Matrix further stated that all materials procured by it have been by way of import or purchase in India, after paying all relevant duties and taxes. The company added that it thereafter facilitated sale of such equipment/materials via its app or direct orders placed with it ‘all of which have used formal banking channels based on tax invoices with an unimpeachable audit trail’.”

The big picture: how did this happen? 

Here are two key points that put this Page 3 story in context:

The sheer scale of the scam: Most oxygen-related scams are small-time operations by small-time operators looking to earn a quick buck. And they account for most of the recent arrests. As one Delhi police official describes it:

“Oxygen concentrators are expensive. Not everyone can hoard in bulk, and sell it later. So, some people are trying to make profits quickly by selling small oxygen canisters. We arrested a medical supplier who was selling oxygen canisters for Rs.5,100 when the price of the canister as mentioned on the can was only Rs.400. That man had recently sold an oxygen concentrator for around Rs.1,25,000, more than twice its price.”

So to run an operation at the scale of Kalra & Duggal, you need to have lots of cash. The only comparable racket involved senior district officials in Uttar Pradesh and 747 oxygen cylinders—which were “allocated” to non-Covid hospitals and then diverted to the black market. This isn’t to say that the pettier scams don’t add up. In Bihar, oxygen cylinder racketeering is now the second most profitable activity after liquor smuggling.

Lack of regulation: There are strict controls on the distribution of domestic supplies of oxygen—ever since March 2020, when the pandemic began. The union government now controls and determines the distribution of medical oxygen. Even medical devices like oximeters or concentrators made in India are subject to some measure of oversight. But as this News Minute investigation into imported oximeters shows, there is very little monitoring of devices imported from overseas. 

Also this: Licensing requirements for Covid-related devices has been greatly reduced over the past few weeks—given the need for speed. For example: price stickers had to be stamped on these devices before they cleared customs to prevent profiteering. But that rule has been removed since April 30.  

The bottomline: The import of oxygen concentrators from China has risen in record numbers in recent months. Since April, orders for at least 40,000 oxygen concentrators have been placed by Indian companies. But it is now clear that the government may not be tracking where these concentrators end up. And that’s good reason to worry.

Reading list

There isn’t much more to read on the scam itself. Indian Express and Business Today have more on the pushback from Matrix. We recommend The News Minute’s investigation into imported oximeters—though it focuses on the lack of quality control. Scroll has a good piece on how scamsters are defrauding people desperate for oxygen and medicines. NewsLaundry profiles the scamster-in-chief: Sachin Agarwal. Hindustan Times has a solid reported piece on how the black market operates in Delhi. If you’re curious about the original owners of Khan Chacha—the actual Khans—Scroll did a piece on them as well.