The Accountants General, Kerala, (AG), are investigating whether certain key multi-crore procurement deals executed by Keltron in the recent past had caused prodigious loss to the government and corresponding gain to private vendors of “doubtful credentials.”
The AG is scrutinising deals struck by Keltron with private companies on behalf of various State government departments between 2013 and 2016. The transactions related to purchase of computers for an important government project and procurement of security and surveillance systems for the State’s law enforcement.
The AG’s preliminary inference is that Keltron had “abetted” certain private companies to “scam” the public exchequer of huge sums of money in these deals, top officials said. Government departments routinely award works to Keltron, without tender, it being a statutory corporation.
Auditors found that Keltron, for these transactions, had signed joint venture agreements with private vendors who were not original equipment manufacturers (OEM).
Some of the suspect firms appeared to have been created by “fly-by-night” operators solely to angle for “lucrative deals from Keltron.”
Illustratively, one such firm with which Keltron had struck a joint venture to purchase computers had initiated a value added tax (VAT) account just for the transaction.
The VAT account showed no other transaction other than the one which was consummated between the company and Keltron. Post-transaction, the firm “mysteriously” cancelled its VAT registration and “vanished.”
Auditors found that in some cases Keltron had partnered with firms that assumed the role of “wolfish middlemen” in purchases and supplied gadgets to the government at rates far higher than that charged by the OEM.
The criteria applied by Keltron, if any, for selecting its joint venture partners were “highly questionable”. In most of the cases, Keltron had selected the firms “through a backdoor process by passing tender procedures.”
Auditors have reported to the AG that Keltron had thus bypassed the tender procedures prescribed the Central Vigilance and Commission and ignored the norms specified in the Store Purchase Manual of the Kerala government in these transactions. The AG has sought clarification from the Finance Department and Keltron’s board of directors, and the National Informatics Centre on the matter.
MD’s reaction
T. R. Hemalatha, managing director, Keltron, told The Hindu that she had just taken charge. She would scrutinise the matter in detail and give a definitive reply. Efforts were on to improve the efficiency and transparency of Keltron. Anomalies, if any, would be rectified.
Keeping tabs
Deals related to purchase of computers for a govt. project and procurement of security systems
Auditors report to AG that Keltron has bypassed tender proceedings
