Auditor finds mismanagement in firm hired for onshore ops
The operation of Kolkata Port Trust’s (KoPT’s) main cargo-handling arm, Haldia Dock, faces uncertainty once again with the auditors identifying financial mismanagement in the company that has been roped in via the tender route for onshore operations of berths 2 and 8. The two mechanised berths can handle 20,000 tonne each a day, the highest of all berths in Haldia. The port, since 2012, has been suffering a number of setbacks in getting a contractor for these berths.
Even as it has been able to rope in a contractor, EC Bose & Co, after three years of ABG-LDA’s exit, the consortium of India’s ABG and France’s LDA, port officials are not sure whether EC Bose would finally be able to take up the task.
A top KoPT official on the condition of anonymity said EC Bose’s statement of accounts have a number of discrepancies and in many cases not compliant with the provisions of the New Companies Act.
The company has been a service tax defaulter for the last several years and has income tax liabilities. This is a criminal offence and brings the company under the purview of CIBIL, barring it loans from banks and authorised lenders. Besides, it has used long-term funds for permanent working capital, which signifies that it has a crunch of working capital.
According to the port official, auditors have pointed out that EC Bose granted loans at rates “prejudicial to the interest of the company”, whereas the company has taken loan from its directors, relatives and corporate bodies at market-determined rates. This signifies that the company might have pumped out money from its system.
There is also an issue on the combined share holding of the two directors, P S Bose and D S Bose, because the balance sheet as on March 2014 shows a combined share holding of 2,271 shares whereas in the annual return as on September 2014, the holding has been shown at 2,219 shares. The return has disclosed nil share transfer.
“All these issues bring the company under question because under the New Companies Act, such activities have been termed as intent to fraud,” the official said.
ABG- LDA exited from Haldia port citing law and order problem, although the main reason was the lack of cargo and non-profitability of operations. For the last three years, the port couldn’t appoint a contractor for the most productive berths because the rates offered were not up to the mark. Finally, EC Bose quoted the lowest, R63.63 for per tonne of cargo handling (onshore) and won the bid.
* The operation of KoPT’s main cargo-handling arm, Haldia Dock, faces uncertainty with auditors identifying financial mismanagement in the firm that has been roped in via for onshore operations of berths 2 and 8
* The port, since 2012, has been suffering a number of setbacks in getting a contractor for these
* Even as it has been able to rope in a contractor, EC Bose & Co, after three years of ABG-LDA’s exit, port officials are not sure whether EC Bose would finally be able to take up the task