*Huge variation in bank accounts
Neeraj Rohmetra
Jammu, Aug 8: Three members Enquiry Committee, which had been constituted by the State Government to conduct special audit of Jammu & Kashmir Cooperative Supply & Marketing Federation Limited (JAKFED) has unearthed a major scam worth crores and has established connivance of several top officials of the institution including the then Managing Director.
The report of the Enquiry Committee, which is in possession of EXCELSIOR had recently been submitted by Registrar Cooperative, Sudarshan Sharma to the Secretary, Cooperative Department. The Special Audit Report of the JAKFED for the year 2009-10 and 2011-12 has categorically pointed out to serious irregularities the functioning of the Department.
Confirming the submission of report of special audit, Minister for Cooperative, Dr Manohar Lal Sharma said, “the Report submitted by the three-member Committee is under examination of the Government and it has pointed to several irregularities committed by several top officials of the institution. We will make sure that the officials involved in the scandal, whether in service or retired are punished”.
“I had myself ordered Special Audit of the JAKFED after ordering attachment of the then MD, Ravinder Gupta and had also personally brought the matter to the notice of Chief Minister, Omar Abdullah who had assured his full support to the investigation “, he asserted.
Interestingly, record of JAKFED was also burnt in the fire that engulfed the two-storey wooden annexe at Civil Secretariat, Srinagar on July 11. The Department is now working to reconstruct the record, which had been lost in the blaze.
The Enquiry Report has pointed to several financial irregularities committed by the officials at the helm of affairs and has brought to surface huge differences between the book entries and the actual findings.
Raising serious concerns over the functioning of JAKFED during that period, the report says, “though, the 278th meeting of the Board of Directors (BoD) was convened under the chairmanship of the Minister for Cooperative Manohar Lal Sharma, the minutes of the meeting issued by the then Managing Director (MD), Ravinder Gupta didn’t have the approval of the Chairman”, adding, “although the minutes of meeting were pasted in the minutes book lying in custody of Manager (Personnel), yet the said minutes had not been signed by the Chairman and any other member”.
“The Management of JAKFED was persuaded vide questionnaire to put forth, if any draft approval was obtained. But, no such document was placed on record or produced to audit despite the fact that the decision so shown, taken were seen to have been largely implemented with huge financial involvements”.
The Reports says, “it had been decided that the budget estimates for the year 2010-11 shall be discussed in the meeting of Secretary of the Government, Cooperative Department, Managing Director and FA/CAO JAKFED where after it shall be placed before the Chairman. But, from the records made available to audit the same didn’t seem to have been discussed or got approved. Even for the year 2009-10 and 2011-12, no budget estimates have been got approved”, adding, “budget proposals signed by the Manager Accounts and the FA/CAO JAKFED, during the financial years 2009-10 (Rs 2.84 crore), 2010-11 (Rs 0.46 crore) and 2011-12 (Rs 3.44 crore) have been found as expenditure in excess to budget estimates”.
The document says, “during the years 2010-11 and 2011-12, the institution has ordered 22 promotion of various officials, but in most of the cases the promotions have been ordered on retrospective basis and with monetary benefits. To the utter surprise, several officials have been promoted in 2011 and retrospective effect had been given from 1988/86 leading to salary arrears of Rs 60 lacs and in none of the cases, approval of Chairman or Board of Management or other Higher Authorities have been obtained”.
Further, “contrary to the mode of appointment of General Manager on deputation from State Government as per the Recruitment Rules, 1986, the post of General Manager has been filled up by promotion.
Pointing out further financial irregularities, the Report says, “the imprest outstanding stood at nearly Rs 11 crores on 31-03-2009 and Rs 12 crores on 31-02-2012, out of which nearly Rs 5 crores are still outstanding against the officials, who have already retired since long. Except in case of B K Bakshi, ex-senior Manager, whose outstanding imprest came down from Rs 118.93 lac to Rs 92.53 lac during the three years, no recovery or adjustment was done in case of other retirees”.
“Other major imprest holders included Mukesh Damral, senior Manager (Rs 6 crore as on 31.03.2012); S B Gandotra, AGM (Rs 63 lac on 31-03-2012); Fayaz Khalil, AGM Srinagar (Rs 17.36 lac on 31-03-2012) and Gulzar Ahmad (Rs 1.27 lac). Besides, accounts of several ex-officials continued with credit balance, which wasn’t justified”.
The Report says that despite huge imprest outstanding, CPF was released in favour of several retired employees.
“The institution received Rs 250 lacs as compensation against land transferred to Dental College and Rs 87.31 lac from IFFCO as freight reimbursement in the year 2010-11 and the amount had been diverted for some other purposes. Rs 3.72 crores had been spent for deposition of CPF, payment of arrears and purchase of CTC Tea and amount transferred to fertilizer/cement accounts and for this no Resolution whatsoever was made available”, says the Report adding, “astonishingly the compensation / sale proceeds of land had been utilized for salary arrears and CPF instead of reinvesting”.
Elaborating further on the financial mismanagement by the officials at that point of time, the Report says, “there are serious variations in the bank accounts and there is committed liability of nearly Rs 4.7 crores till March 2012. Besides, CPF of both employees share and employers’ share hadn’t been deposited for three years”.
Commenting on the functioning of Srinagar office of the institution, the Report says, “the Srinagar office suffered losses during these years and couldn’t even earn its own establishment costs”.
“Huge amount of freight were released for direct supply of cement stocks to enroute stations from Srinagar to Jammu even as the issue had been pointed out by the then concurrent audit and FA/CAO. There were also glaring violations in purchase of cement”, says the Report adding, “M/s Advance Goods carrier and M/s Iqbal Transport were paid pending freight transportation charges of previous years, while no provision was made in the relevant years. The release of pending claims wasn’t justified”.
Further, the document says, “bills receivable account cement/allied account were kept in such a way that the same didn’t reflect the closing position of outstanding account. Huge outstandings appeared in cement accounts of Valley based parties also not justified in addition to credit sale to individual cement buyers. Cement bills payable accounts, stock, despatches, also indicated a mess and no clarification has been given”.
The Report has also stated that huge amounts of bitumen was purchased but no purchase entry appeared in the books. “There was Rs 30 lac variations in Tar steel Account between accounts branch and concerned sections. Documents also indicated huge variations between fertilizer purchase between accounts and agriculture sections”.
“There is huge imbalance in payment of rent to hired shops for sales centres and hefty amount of Rs 121 lacs as retention in sales centres in fertilizer, cement, CTC tea. The documents also indicated huge cash retention of LPG in Head Office and R S Pura unit”, says the Report.
Another glaring irregularity, the Enquiry Committee pointed out is that there were arbitration cases worth nearly Rs 24 crores. “There were variations in the accounts of institutions and those prepared by the Chartered Account for filing of Income Tax Returns”.
Secretary Cooperative, Mohammad Afzal Bhat when contacted said that the Special Audit Report had been submitted and the Government was examining all the documents pertaining to the case.
Chairman Legislative Council Amrit Malhotra on April 6 this year had also constituted a House Committee for probe into the JAKFED scam which involved misappropriation of over Rs 300 crore.
The issue rocked the Legislative Council after a member of ruling coalition Naresh Gupta targeted the Government for its failure to make recoveries from the employees involved in the scam.
While giving details of the scam, the Cooperative Minister had stated that at least 35 employees were found involved in the scam were terminated and 15 others suspended. The cases are still pending with Vigilance, Accountability Commission and Crime Branch. He informed the House that 22 separate cases were registered in the case.
In June, 2012, the State Government had constituted a three-member Enquiry Committee to probe irregularities by Ravinder Gupta and ordered his attachment to the office of Registry Cooperative, Srinagar. The Inquiry Committee comprised Rayaz Ahmad Mir, the then Joint Registrar Banking and Finance; Udham Dass, Deputy Registrar, Cooperative Socities, Jammu and Accounts Officer, Registrar Office, Srinagar.
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