The Hindu : Vigilance: irregularities in import of coal by MCL

Online edition of India's National Newspaper
Saturday, Mar 01, 2003

Southern States

Southern States - Kerala

Vigilance: irregularities in import of coal by MCL

ByG. Prabhakaran

PALAKKAD FEB. 28. The investigation by the Vigilance and Anti-Corruption Bureau into the `Rs.1.5-crore coal scam' found large-scale irregularities in the import of coal by the public sector Malabar Cements Limited(MCL) at Walayar.

The Vigilance bureau found that the import contract had been awarded to M/s Coastal Energy Private Limited which had quoted more than other companies; the ordered quantity did not reach the company; the material received had been sub-standard and the actual imported coal had been to some other company resulting in huge loss.

There had also been tax evasion of more than Rs.21 lakhs in the import by the private company.

The FIR filed by the Palakkad Vigilance bureau before the Inquiry Commission and the Special Judge, Kozhikode on Monday said that the accused number 1 and 2, the then managing director of MCL, N.R. Subramaniyam (currently, MD, Travancore Cochin Chemicals and director, MCL), and the Joint Materials Manager, Hariharan, abused their position and engaged in criminal conspiracy with the accused no.3, Balasubramaniyam, Assistant General Manager, Coastal Energy Private Limited, that included a sales tax evasion of Rs.21.21 lakhs by the private company.

The FIR said that the decision to award the contract to Coastal Energy had been in spite of the higher price quoted by them which appeared malafide. (See `MCL coal scam just the tip of the iceberg', The Hindu, March 7, 2002).

The inquiry also found that the Central Sales Tax (CST) registration (No.2412735) used by M/s Coastal Energy Ltd was not genuine as it had not been allotted to any firm. On this account alone the Government lost sales tax revenue to the tune of Rs.21,21,797. A registered notice sent by the Sales Tax Department to this company to their Kochi office was returned with the remark that such a firm did not exist.

The Vigilance inquiry also found that the actual quantity of 30,000 metric tonne of coal did not reach the company. Whether the actual quantity of coal imported from South Africa and unloaded at Kochi port was correctly recorded was also doubtful, the FIR said.

A detailed inquiry was being conducted on this and on the doubt whether the imported coal was diverted to some other company replacing it with locally purchased coal, Vigilance sources said.

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