Coalgate, other scams of Rs 7000 cr unearthed by CVC in 2012

Coalgate along with ponzi frauds and other alleged scams involving an amount of over Rs 7,000 crore were detected by the CVC last year.

New Delhi: Coalgate along with ponzi frauds and other alleged scams involving an amount of over Rs 7,000 crore were detected by the Central Vigilance Commission (CVC) last year.

The CVC found alleged financial irregularities to the tune of Rs 2,700 crore by a Bihar-based television group and misuse of credit linked insurance scheme operated by Mumbai`s State Trading Corporation (STC) involving Rs 725 crore, according to the annual report for 2012 of the transparency watchdog tabled in Parliament recently.

Giving details of the Coalgate, it said a complaint dated March 14, 2012 was received in the Commission from a group of Members of Parliament (MPs) alleging corruption in allotment of coal blocks during 2006-2009 enclosing list of the allotments done.

The complaint mentioned that Ministry of Coal had allotted 64 coal blocks to private parties between 2006 to 2009 and alleged a loss of Rs 43,96,943 crore to the exchequer. The Commission directed CBI to initiate investigation into the complaint on April 5, 2012, it said.

Subsequently, another complaint dated September 5, 2012 was received from some other Members of Parliament alleging malpractices in allocation of captive coal blocks during 1993-2004. This complaint was also referred to CBI on September 18, 2012 for preliminary inquiry, the report said.

"The cases have been registered against several private organisations and unknown officials of Coal Ministry alleging submission and processing of false information to obtain coal blocks in an illegal manner. The investigation is underway," it said.

CBI has registered three preliminary inquiries and 13 FIRs so far in the case.

A complaint was received in the Commission alleging that the telecom licenses issued by the government to three telecom operators were being misused. The complaint was sent for investigation and report to Chief Vigilance Officer (CVO), who act as distant arm of CVC, Department of Telecom (DoT).

A penalty of Rs 50 crore on this three telecom companies was imposed by DoT along with the filing of criminal cases against them on the basis of CVOs findings, the report said.

The CVC has also detected frauds to the tune of Rs 3,568.8 crore in three separate cases involving group of banks, it added.

Citing another fraud, the CVC said an investment company
in connivance with a deputy general manager (DGM) level official of State Bank of India indulged in kite flying transactions which cost them a sum of Rs 46 crore.

"The bank allowed withdrawal of funds against cheque lodged in clearing but not yet cleared. The fraud came to light when the same was pointed out by the auditor.

"The DGM of the branch allowed continuous overdrawings in the group accounts of the investment company against cheque deposited in clearing," it alleged.

A Bihar-based group which is into broadcasting business has availed facilities from various banks led by Punjab National Bank (PNB) to the tune of Rs 2,700 crore through their five companies.

The finance was made available under consortium arrangement. Serious irregularities have been observed on the part of bank officials in due diligence, disbursement, inspection, deviations from terms of sanction, follow up etc, said the report.

The Commission also examined a case related to irregularities in trade transactions for exports of various items under Credit Linked Insurance Scheme (CLIS) operated by State Trading Corporation (STC), Mumbai.

It was observed that during the period 2005-09, various business firms or associates had undertaken export of items such as gold jewellery, construction material, etc, through STC, Mumbai, under the CLIS scheme.

"Non compliance of various terms and conditions, as envisaged in CLIS and various circulars issued by STC from time to time, resulted in a huge financial risk or liability amounting to Rs 725.09 crore, besides interest and other charges, without chances of recovery from the associates or insurance companies," it said.


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