CBI registers case in alleged Rs 240-crore scam in gas supply

Written by Press Trust of India | New Delhi | Updated: Jun 8 2014, 20:57pm hrs
OilCBI has registered a case against the then General Manager of Gas Authority of India Limited in a Rs 240-crore scam
CBI has registered a case against the then General Manager of Gas Authority of India Limited in a Rs 240-crore scam in which seven private companies were allegedly favoured through under-billing and fake submissions.

CBI sources said the agency has named the then General Manager (Pricing) at GAIL, EVS Rao, for allegedly entering into a criminal conspiracy with seven private companies--MMS Steel, Saheli Exports, Kaveri Gas, Coromandel Electric Company, Arkay energy, OPG energy and Sai Regency to cheat GAIL, causing a loss of over Rs 240 crore to the PSU.

After registering the cases, CBI had carried out searches at 13 locations in Andhra Pradesh, Noida, New Delhi and Mumbai from where it seized crucial documents.

The sources said these companies had entered into separate agreements with GAIL in 2000. According to the deal, GAIL had to supply these companies with fixed quota of gas and prices were to be decided by the central government.

The sources said these companies were given cheap gas through Administered Price Mechanism (APM) which according to Government of India's policy was meant for the use of power and fertiliser sectors only.

Later, Government had decided that in public interest, all available APM gas would be supplied to only power and fertiliser sector consumers against their existing allocations along with specific end users committed under court orders/ small scale consumers having allocations up to 0.05 MMSCMD at the revised price of Rs 3200/MSCM.

This price was later increased by 20 per cent to 3840/MCM for the gas supplied to gas distribution projects and small consumers having an allocation of up to 0.05 MMSCMD in 2006.

It is alleged by CBI in its FIR that Rao "intentionally and dishonestly" did not direct the concerned authorities to issue bills to these private companies on increased rates so that they kept paying old rates to the government.

It is also alleged that these companies not only avoided paying their dues but also falsely informed GAIL that they complied with stipulation of the Electricity Act and the entire gas supply was being fully utlised for power generation which was being used for public utility purposes.

CBI alleged the companies were instead making handsome profit by selling the power, generated using APM Gas prices, to specific customers at market rates.

CBI carried out a detailed preliminary enquiry into the matter before proceeding to register a regular case in the matter, they said.

The agency claimed that by not billing the companies with increased rates, the public sector undertaking allegedly suffered a loss of over Rs 240 crore.

In its FIR, CBI has levelled allegations under section 120-B (criminal conspiracy), cheating (420) and provisions of Prevention of Corruption Act.