SAIL: State funds used to defend corrupt officials in court
It sounds strange, but it is true that CMD SAIL Amarendu paid about Rs 70 lakhs from SAIL exchequer to defend ex-Chairman Soma in the same complaints which were buried by her on four occasions: Were both scratching each other’s back?
Will the amount be recovered from her and others as she is no more a PESB Member?
May God save the country from the CPSE board members selected by her active participation as PESB Member!
Ministry shields illegitimate acts of SAIL officials but victimises legitimate Whistle Blower
On Nov 17, 2022, three complaints were sent by the Whistle Blower Rajeev Bhatia to the then Chairman Soma Mondal and D[C] V S Chakravarthy of SAIL. Complaints were buried and Bhatia was suspended on Nov 24, 2022. Subsequently, the same three complaints were sent to PMO vide CPGRAMS complaints no. - PMOPG/D/2022/0275053 dated Dec 03, 2022, PMOPG/E/2023/0000665 dated Jan 01, 2023 and PMOPG/E/2023/0010256 dated Jan 11, 2023. From PMO, on all the three occasions, the complaints came to SAIL but were buried on all three occasions. Subsequently Bhatia sent the same complaints to LOKPAL on Feb 11, 2023.
Complaints buried, Ministry says ‘it is an established procedure’
As the complaints were genuine, Chairman and D[C], buried the complaints on not one or two but on all the four occasions. Height is that on three occasions, complaints were received from the PMO. Regarding burial of complaints, on numerous occasions complaints have been made by the Whistle Blower to the Ministry of Steel but every time Ministry avoided the matter by saying that the complaints have been handled as per the established procedure.
LOKPAL in action
Finding substance in the complaints, LOKPAL entrusted CVC to undertake preliminary investigations. CVO-SAIL, the extended arm of CVC conducted the investigations and submitted the report recommending CBI inquiry to unravel the nexus between SAIL officials and private firms involved in the complains. The Ministry of Steel and CVC concurred with the recommendations of CVO-SAIL and the same were submitted to LOKPAL in Aug 2023.
On the receipt of the report, LOKPAL afforded opportunity for defense to the alleged officials of SAIL viz. Soma Mondal, Mahesh Chand Agarwal & Sanjay Agarwal in the month of Oct 2023. By that time, Soma Mondal and Mahesh Chand Agarwal had superannuated from SAIL. Soma had joined as Member PESB and Mahesh as Director in OFB Tech P Ltd, to whom over 3,00,000 Tonne of steel was supplied by underhandedly allowing discounts applicable for Projects giving a hit of about Rs 100 CR to SAIL. It is noteworthy that OFB Tech P Ltd is a B2B commerce firm and does not undertake projects.
· Advocate Mr. Vidur Mohan and Mr. Kaushal Kumar
Singh appeared on behalf of Soma Mondal.
· Senior Advocate Mr. Sanjay Jain, learned, with Mr. Siddharth Gupta, Mr. Mrigank Prabhakar, Ms. Jaya Rishi, Mr. Nishank Tripathi and Ms. Harshita Sukhija appeared on behalf of Mahesh Chand Agarwal.
· Advocate Ms. Jyoti Dutt Sharma, learned, with Mr. Angad Gautam and Ms. Shefali Agarwal appeared on behalf of Sanjay Agarwal.
The names of the above advocates were shortlisted by the alleged officers but the payment was made by SAIL.
It has been gathered that an amount of about 70 lakhs has been paid by SAIL to the above advocates to defend the three officers alleged with major corruption charges. It is not only unethical & immoral but illegal also for SAIL to pay for the legal expenses, more so when Soma and Mahesh had already superannuated. Moreover, the advocates were engaged on the nomination basis and amount paid as demanded. This is the reason that Ms Shefali Agarwal, who is the daughter of Sanjay and daughter-in-law of Mahesh was also engaged although code of conduct applicable for SAIL officials prohibits entering into business relationship with the family members.
The highly paid legal minds hired by SAIL could not convince the LOKPAL bench and the complaints were handed over to CBI on Jan 10, 2024 for detailed investigations to unravel the larger conspiracy.
Subsequently, Soma approached Delhi High Court against the order of the LOKPAL. There also Advocate Mr. Vidur Mohan is the counsel for her. Given the scale of unethical practices prevalent in SAIL, it should be a matter of investigation whether the amount Rs 70 lakhs spent by SAIL also included the services being rendered to Soma by the advocate in the Delhi High Court?
With LOKPAL prima-facia finding substantial substance in the complaints, now it is duty of SAIL to recover the amount from Soma, Mahesh and Sanjay.
Why not Solicitor General?
Although State funds cannot be used to defend officials alleged with embezzling state funds through corruption, for argument’s sake even if we consider it an extraordinary case and these officers were to be defended tooth and nail by the state, then why the services of the Solicitor General and his team were not taken?
The Solicitor General is a senior government official and law officer who represents the state in legal proceedings and provides legal advice to the executive branch. He advises the Union Government and represents the Union of India in the courts. He is assisted by several Additional Solicitors General.
Recently, a petition has been filed by MOIL JANSHAKTI MAZDOOR SANGH BALAGHAT in the Nagpur Bench of Bombay High Court challenging the appointment of V Suresh as CMD-MOIL due to the pending CBI inquiry. Suresh was suspended after the LOKPAL order dated Jan 10, 2024 and later revoked on Jun 28, 2024 with CBI/LOKPAL investigations pending.
In the above matter the Solicitor General of India appeared before the court to defend the appointment of V Suresh as CMD MOIL.
Unlike above, a battery of advocates who were engaged on the nomination basis, were entrusted with the job to defend Soma, Mahesh & Sanjay before the LOKPAL
How can Solicitor General?
For engaging the services of the Solicitor General and his team, a formal communication was required to be sent through the Ministry of Steel. In addition, by this time Soma was Member a PESB and therefore DoPT was also required to be involved. Moreover, it would have been a 'catch-22' situation for the Ministry of Steel and they had already recommended CBI inquiry in the matter.
Due to the above reasons, CMD SAIL Amarendu Prakash along with the Director(personnel) K K Singh took the considered decision to approve the engagement of private lawyers clandestinely within the company, without involving the government machinery.
In all probability, the Solicitor General would have also declined to appear in such a matter.
No reply to the complaints, what SAIL is hiding, what Ministry is hiding
In the matter of engagement
of advocates and payment of Rs 70 lakhs from SAIL exchequer, one complaint has
been filed by the Whistle Blower Rajeev Bhatia under Vigil Mechanism of SAIL
and another with the Secretary Steel Sandeep Poundrik on July 22, 2024.
Not replying is violation of the statutory provisions
It has been gathered that the above complaints were followed by numerous reminders also. We quote from the Vigil Mechanism policy of SAIL:
‘The final action taken on the Complaint shall be conveyed to the Complainant by the Complainant by the Designated Authority as directed by the Chairperson, Audit Committee within six months of the receipt of the Complaint. However, if no final decision has been taken within this period, then an interim intimation on the status of the Complaint will be sent to the Complainant’.
Vigil Mechanism Policy has been formulated under the following Statutory and Regulatory Provisions: (1) Sections 177(9) and 177 (10) of the Companies Act, 2013; (2) SEBI’s amended Clause 49 and 49(F) of the Listing Agreement (Listing Obligations & Disclosure Requirements) and (3) The Guidelines on Corporate Governance for CPSEs issued by the Department of Public Enterprises vide O.M. dated 14.05.2010.
Similarly, a complaint against Sanjay, regarding extracting payment from SAIL for his own daughter was also lodged by the Whistle Blower. As usual, SAIL and the Appellate Authority Abhijeet Narendra, JS-MoS, both very carefully avoided the issue in the reply and the speaking order respectively.
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(The above article has been written based on extensive research and inputs from various sources including sources from SAIL)
