The agriculture ministry has slapped notices on 25 people, including National Agricultural Co-operative Marketing Federation (Nafed) chairman Bijender Singh and former managing director Alok Ranjan, for the recovery of over R387 crore, accusing them of benefiting from the tie-up business scam during 2003-06, which strained its balance sheet.
The move by the ministry comes more than a month after the CBI arrested five people in connection with the scam that involved businesses with private parties. The notices by the central registrar of cooperative societies came after the CBI arrested the income-tax commissioner of Agra Homi Rajvansh in September for allegedly conniving with private parties and granting funds without seeking any collateral when he was serving as the additional managing director at Nafed in 2005. Sources said Rajvansh ? a 1985-batch Indian Revenue Service officer ? and Ranjan, a 1978-batch IAS officer who is serving as the Agriculture Production commissioner of Uttar Pradesh, have been sent notices to pay R119.37 crore and R19.36 crore, respectively.
The registrar has also served notices to the wife and son of the then Nafed chairman Ajit Singh, who died in an accident four years ago, to pay R64.09 crore each. Bijender Singh ? the then local director as well as the member of Nafed?s business committee ? and CB Holkar ? former vice-chairman and member of its business committee ? have been directed to pay R16.02 crore each. Although the recovery notices account for a paltry sum, compared with thousands of crores involved in the scam, the sources said they would perhaps act as a deterrent against corruption at cooperative societies.
Bijender Singh termed the registrar?s action ?politically motivated?, while Holkar said charges against him are baseless. Both said they would appeal against the notice. Ranjan said he is yet to receive the notice.
Asked about the tie-up businesses that Nafed undertook during his tenure as the managing director, Ranjan said he had initiated actions against all those found to have indulged in wrongdoing. Ajit Singh?s wife and son weren?t available for comments.
The people concerned can appeal to GC Pati ? an additional secretary in the department of agriculture ? against the notices. If their pleas are dismissed by him, they can approach the Delhi High Court, the sources said.
Under the failed tie-up venture, Nafed had extended advances through bank loans of R3,945 crore to private companies during 2003-06 for undertaking businesses of farm as well as non-farm commodities, including iron ore exports, going beyond its usual role of handling agriculture-related activities and, thereby, raising suspicion about the motive behind such tie-ups.
Although Nafed managed to recover around R2,880 crore, many of the companies defaulted on repayment, forcing it to pay about R1,726 crore to banks. The interest of more than R100 crore a year on such payments is taking a heavy toll on Nafed?s balance sheet. Nafed has initiated criminal proceedings against the defaulting companies.
?How can the registrar say I am guilty when as a local director and a member of Nafed?s business committee in 2003-04, I didn?t have the voting right to influence the board?s decision on financial deals in the tie-up businesses? Moreover, they targeted only me but didn?t charge the other nine members of the business committee. To me, it is nothing but politically motivated,? Bijender Singh said.
Holkar said all the matters relating to non-farm activities under the tie-up business never came up before the board. ?The board wasn?t consulted for advances to companies for non-farm commodity businesses, so I wasn?t kept in the loop. Only the then chairman (Ajit Singh), MD (Alok Ranjan) and additional MD (Rajvansh), who was handling finance, knew what was going on,? he said.
However, sources denied any bias in the notices, which they said had been issued after ?carefully? examining the matter. ?Ajit Singh?s mother and three others have been exonerated following the inquiry, so where is the question of bias? Let them appeal if they want to,? one of the sources said.