SAIL faces corruption probe: 2 directors suspended
ECONOMY & POLICY

SAIL faces corruption probe: 2 directors suspended

The National anti-corruption ombudsman Lokpal has identified irregularities in two commercial transactions conducted by the Steel Authority of India, as indicated in a recent order. This discovery resulted in the immediate suspension of two directors and 26 board-level officials within the public sector undertaking.

The transactions involving Venkatesh Infra Projects and Avon Steel Industries by SAIL are currently under scrutiny. According to the order, the investigation for both cases has been entrusted to the Central Bureau of Investigation (CBI) and is expected to conclude within six months.

On January 20, the Ministry of Steel suspended VS Chakravarthy, Director (Commercial), and AK Tulsiani, Director (Finance) with immediate effect. SAIL's Chairman, Shri Amarendu Prakash, reassured that the company's operations remain unaffected, stating, "The company?s business is being carried out as usual and it is not going to impact the performance of the company."

The complainant alleges that SAIL entered into an agreement to supply 1,40,000 metric tonnes of steel to M/S Venkatesh on October 20, 2020, just eight days after the company's incorporation. The order notes the complainant's astonishment at how a newly formed company without prior work experience secured such significant projects involving substantial steel consumption.

Furthermore, the complainant alleges that SAIL's executive director (sales and ITD) offered favorable prices to M/S Venkatesh, describing it as a "special favor." The Lokpal, in its order, criticised the lack of due diligence on SAIL's part, stating that providing material at lower costs to M/S Venkatesh, compared to other similar customers, resulted in a missed opportunity to maximise profit.

The order emphasises not only the monetary loss incurred but also the intention to manipulate the system for the benefit of the external entity, highlighting the potential collaboration between experienced players in the steel market and SAIL officers.

The complaint accuses SAIL's chairman and executive director (sales and ITD) of misusing their positions, leading to losses for the state-owned steel maker in its dealings with Avon Steel Industries Private Ltd. The complaint alleges that SAIL sold semis, a steel product, to Avon Steel at prices that allowed the private firm to make "windfall profits at the expense of SAIL."

In response to these allegations, the Ministry of Steel has stated that a deeper probe by an external specialised agency is warranted to determine the precise roles played by various stakeholders in relation to a leaky pricing slash marketing policy. The Lokpal, in its order, points out the potential nexus among the concerned officials and the alleged beneficiary, underscoring the need for a thorough investigation.

The National anti-corruption ombudsman Lokpal has identified irregularities in two commercial transactions conducted by the Steel Authority of India, as indicated in a recent order. This discovery resulted in the immediate suspension of two directors and 26 board-level officials within the public sector undertaking. The transactions involving Venkatesh Infra Projects and Avon Steel Industries by SAIL are currently under scrutiny. According to the order, the investigation for both cases has been entrusted to the Central Bureau of Investigation (CBI) and is expected to conclude within six months. On January 20, the Ministry of Steel suspended VS Chakravarthy, Director (Commercial), and AK Tulsiani, Director (Finance) with immediate effect. SAIL's Chairman, Shri Amarendu Prakash, reassured that the company's operations remain unaffected, stating, The company?s business is being carried out as usual and it is not going to impact the performance of the company. The complainant alleges that SAIL entered into an agreement to supply 1,40,000 metric tonnes of steel to M/S Venkatesh on October 20, 2020, just eight days after the company's incorporation. The order notes the complainant's astonishment at how a newly formed company without prior work experience secured such significant projects involving substantial steel consumption. Furthermore, the complainant alleges that SAIL's executive director (sales and ITD) offered favorable prices to M/S Venkatesh, describing it as a special favor. The Lokpal, in its order, criticised the lack of due diligence on SAIL's part, stating that providing material at lower costs to M/S Venkatesh, compared to other similar customers, resulted in a missed opportunity to maximise profit. The order emphasises not only the monetary loss incurred but also the intention to manipulate the system for the benefit of the external entity, highlighting the potential collaboration between experienced players in the steel market and SAIL officers. The complaint accuses SAIL's chairman and executive director (sales and ITD) of misusing their positions, leading to losses for the state-owned steel maker in its dealings with Avon Steel Industries Private Ltd. The complaint alleges that SAIL sold semis, a steel product, to Avon Steel at prices that allowed the private firm to make windfall profits at the expense of SAIL. In response to these allegations, the Ministry of Steel has stated that a deeper probe by an external specialised agency is warranted to determine the precise roles played by various stakeholders in relation to a leaky pricing slash marketing policy. The Lokpal, in its order, points out the potential nexus among the concerned officials and the alleged beneficiary, underscoring the need for a thorough investigation.

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