The Tribune, Chandigarh, India

Wednesday, June 19, 2002, Chandigarh, India

THE TRIBUNE SPECIALS

50 YEARS OF INDEPENDENCE

TERCENTENARY CELEBRATIONS

M A I N N E W S

Now, multi-crore rice diversion scam
FCI officials rounded up following raids
Chander Parkash and Vijay Mohan
Tribune News Service

Bathinda, June 18
A major scam, running into crores of rupees involving the illegal diversion of export-earmarked rice, to the local market through an alleged nexus between rice shellers, some export firms and employees of the Food Corporation of India (FCI), has been unearthed by the district police authorities here today.

Following a series of raids at the local FCI depot and on the premises of a few rice shelling mills, several FCI officials and a number of truck drivers, who were given contracts for transporting consignments, have been rounded up by the police for questioning. Certain owners of the mills involved in the scam are reportedly absconding.

The sources said certain exporters were purchasing high quality rice from the FCI at subsidised prices on the pretext of exporting the same, but were actually selling it to local shellers at the prevailing market rate. The rice was purchased from the FCI at a rate of Rs 576 per quintal, where as the market rate for the same is stated to be around Rs 900 per quintal. Further, the consignment was also exempted from sales tax.

Following a tip-off police personnel swooped down on the FCI depot and four rice shellers based in the district this afternoon and seized export-earmarked rice consignments weighing 2,000 metric tonnes, being illegally diverted to local markets. Police sources say this catch could be just the tip of the iceberg and preliminary investigations reveal that this could assume huge dimensions.

Till last reports, the raids were continuing. A large number of documents and books have also been taken by the police into their custody, which are being scrutinised. Police personnel have also been deployed at the FCI depot and around the premises of the rice shelling mills.

The sources revealed that a Delhi-based firm, Sharp Menthol India Limited, had presented a release order for 2,000 metric tonnes of A-grade rice for export. As per the release order, dated June 13, 2002, the firm had paid Rs. 1.16 crore to the FCI vide a demand draft for the consignment. The consignment was destined for ports at Mumbai and Kakinda by road. As per details made available by sources, 22 truck loads of rice were moved from the FCI depot yesterday, while 15 were moved today. One of the trucks contained 200 bags of rice.

The sources add that 14 of the trucks contracted by the firm, seven of which were still loaded, were impounded during raids at the premises of a rice sheller in Katarsinghwalla village near here.

Among the shellers identified by the police to be involved in the scam are Bathinda Rice Mills, Kisan Rice Mill and Shivam Gram Udyog Samadi Rice Mill. The police has identified the Managing Director of the firm as Sanjay Sahay and the Director as Jai Parkash Singal. Sources add a case under Sections 380, 420, 467, 471 and 120-B of the Indian Penal Code along with Section 7 of the Essential Commodities Act would be registered against them.

Although the involvement of FCI officials in this particular modus operands has been ruled out as they were releasing the rice consignments as per the release orders issued by the higher authorities and the firm purchasing the rice is responsible for its transit once the consignment leaves the FCI gates, sources believe that some of the rice so diverted could be finding its way back to the FCI godowns through the rice shellers.

FCI officials say earlier export consignments were delivered to the purchasing firms directly at the ports concerned through rail. Later, the government amended this policy to allow transport of export consignments by road, which has given rise to such practices. Some FCI employees maintain that the practice of diverting consignments has been going on for the past two years.

The FCI’s Senior Regional Manager, Mr V. K. Singh, when contacted, said they had repeatedly written to higher-ups to allow, the transport of export consignments only through rail as transport through road was susceptible to theft and diversions. He added that during the last two years, about 25 lakh metric tonnes of foodgrain had moved from FCI depots in the state which was destined for the export market. Out of this, 10 lakh tonnes had moved in the current financial year itself.