SAIL PROJECT SCAM: Fake Projects felling; TMT still selling
Entire production being sold; No stock piles reported
Whistle Blower contributed 7% to SAIL’s bottom line
Despite vigorous vendetta against him, through his zeal and resolve and love for his organisation, the Whistle Blower restored the original business strategy. Fake Projects are almost out of SAIL system, Shift of Sales from Fake Projects to SAIL Distributors/Dealers and Genuine Projects/Construction companies have happened resulting in sizeable annual savings for SAIL. As per internal sources, savings could be Rs 125 to 150 CR annually.
During 2024-25, SAIL’s PAT was Rs 2148 CR. It can be said that about 7% has been single handedly contributed by an officer who, as per sources, has been illegitimately given premature retirement on Feb 11, 2025. This is not a one-time saving; it will continue forever provided SAIL does not go back to Fake Projects in the absence of Whistle Blower from the scene.
Although there were voices both internal and external from some field officers and distributors but no ears were given to them. TMT Bars were being sold to the SAIL Distributors at much higher price than the FAKE PROJECTS. Both the materials were trading in the same market, posing tremendous difficulty and business risk for the SAIL Distributors. Due to complete indifference shown by SAIL towards their concerns, some SAIL Distributors became FAKE PROJECTS in their other firms. As it was a win-win proposition, SAIL officers happily allowed the same. Those who could not become Fake Projects, started sourcing TMT Bars from other Fake Projects. SAIL was the only loser in the entire game.
Fake Projects are specially favoured and preferred Traders/Middlemen who
are camouflaged as Projects to
surreptitiously put the discounts available/approved for Genuine
Projects/Construction companies in operation to give illicit financial benefit
to them and dent the top and bottom line of SAIL.
Traders/Fake Projects/Middle-Men are the most adorable customers for SAIL and its officers of Central Marketing Organization. The bigger ones wield such an influence on the organisation that they command power to get the officers transferred and promoted also.
How the GAME was being played?
How the WHISTLE BLOWER single handedly changed the Rules of the Game?
Though the policy guidelines were very much in place but the same were being blatantly flouted by the delinquent officers of SAIL. Whistle Blower compelled SAIL’s management directly and through LOKPAL’s order dated Jan 10, 2024 to reinforce the policy guidelines.
TMT Bars account for about 50 Million Tonne, which is almost one third of the total finished steel consumption of the country. SAIL produces only about 3 Million Tonne annually which is about 6% of the annual consumption of the country. As it is a meagre portion of the country’s consumption, as a business strategy, it has been stated business strategy of SAIL to place the product only in the niche markets and not to compete in the market with the secondary market brands. In line with the above, TMT Bars have been reserved for sale only to SAIL Distributors/Dealers and Genuine Projects/Construction companies so that maximum price can be fetched for the production.
It has been gathered that the untiring efforts of the Whistle Blower Rajeev Bhatia for over three years, has eliminated the Traders/ Fake Projects from the SAIL system of TMT Bars. Despite removal of about 100 Traders/ Fake Projects, SAIL has been able to sell its entire production of TMT Bars to SAIL Distributors/Dealers and Genuine Projects/Construction companies. It not only reinforces but proves the point that Traders/ Fake Projects were deliberately and consciously brought in to offer windfall profits to them.
It may be noted that with SAIL Distributors/Dealers officers cannot negotiate the price and Genuine Projects/Construction companies are not likely to part of the dirty business of mutual gains, it would also not be an exaggeration that SAIL Distributors/Dealers and Genuine Projects/Construction companies would have been deliberately starved of TMT Bars so that the same can be sold to Traders/ Fake Projects camouflaged as Projects.
With so many cases of Traders/ Fake Projects camouflaged as Projects under investigation of Lokpal/CBI, it is amply clear that the officials deliberately circumvent the policy and business strategy and sold large volumes of TMT Bars to them in the name of Projects that too on heavy discounts to give them financial benefit and dent the top and bottom line of SAIL. Given the scale of scam, it would not be out of place to say that the financial benefit could be mutual. The game which was primarily started for TMT, took other products of SAIL also in its ambit. Officers went on to sell such products also which do not find any use in Projects.
Before sending the complaints on sale of steel to Venkatesh Infra Projects P Ltd ; Avon Steel Industries P Ltd and Hi-Tech Pipes Ltd (Group) to LOKPAL of India, the Whistle Blower Rajeev Bhatia sent the very complaint to Soma Mondal and V S Chakravarty, the then Chairman and Director (Commercial) of SAIL on November 17, 2022.
Principles of Good Corporate Governance demanded that the duo, as Members of SAIL Board, have provided protection to the Whistle Blower from retribution and vendetta and initiated investigations in the complaint received from him. Instead, they buried the complaint under the carpet and suspended the Whistle Blower on November 24, 2022.
It is only when both did not take any action on the complaint, instead suspended the Whistle Blower on November 24, 2022, Bhatia lodged the complaint with LOKPAL of India in February 2023. It has been gathered that in between, three times Bhatia sent the same complaint to PMO. From PMO the complaint came to Soma Mondal but she also buried the same on all the three occasions.
Matter is not limited to burying the complaint under the carpet and suspending the Whistle Blower. Both Soma Mondal and V S Chakravarty took no action in stopping sales to FAKE PROJECTS/TRADERS in the name of Projects, which was the central point of Bhatia’s complaint sent to them. Rather the sales accelerated. After Soma, Amerandu Prakash took over as Chairman SAIL and he too did not take any effort to stop such sales despite assuring MoS to do so.
Vide order dated January 10, 2024 where LOKPAL handed over the sales issue of Venkatesh Infra Projects P Ltd and Avon Steel Industries P Ltd to CBI. Not only the matter was handed over to CBI but LOKPAL made scathing remarks on the functioning of SAIL and directed SAIL to formulate a clear and unambiguous policy with regard to MOU, pricing and relaxation. SAIL was also directed SAIL to apprise LOKPAL regarding compliance of this direction.
https://lokpalonline.gov.in/lokpalonline/cdn/web_upload/CN73,74and752023_1705052862.pdf
Many of the officers depicted above were suspended after the above order. However, Amerandu attached no value to the LOKPAL’s directions and sales to FAKE PROJECTS/ TRADERS were not stopped.
https://www.bureaugram.com/news/sail-project-scam-a-syndicate-of-connivances
CBI has registered the FIRs in the matter of Venkatesh Infra Projects P Ltd and Avon Steel Industries P Ltd Presently. In addition, over 40 firms are under fresh investigations of LOKPAL/CBI. Just like Venkatesh Infra Projects P Ltd, all these firms allegedly are FAKE PROJECTS/TRADERS involved in Trading/Re-Sale rather than doing any kind of constructions or Project work. Estimated loss to SAIL is over Rs 200 Crores in supply of 6,50,000 Tonne. Out of 6,50,000 Tonne, over 3,00,000 Tonne of steel have been supplied by SAIL after the receipt of complaint on Venkatesh Infra Projects P Ltd from the Whistle Blower.
(The above article has been written based on extensive research and inputs from various sources including sources from SAIL)
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