The Vigilance and Anti-Corruption Bureau (VACB) has filed First Information Reports (FIRs) in its special courts in Thiruvananthapuram and Thrissur in connection with the raids it conducted on Consumerfed outlets and warehouses across the State last week.

The agency has, according to preliminary estimates, stumbled on financial irregularities and corruption which could have cost the public exchequer more than Rs.60 crore.

The main charge of the VACB is that the apex body of consumer cooperative societies in Kerala (the Kerala State Cooperatives Consumers’ Federation) had, at least during the past two years, procured essential commodities at higher than market rates from ‘favoured private suppliers’ and, in the process, caused huge loss to the government and ‘betrayed’ its stated aim of making available provisions at the lowest rates to consumers.

Investigators who spearheaded the anti-corruption drive, code-named ‘Operation Annapurna,’ said that between April and July this year alone, Consumerfed in Kollam district had purchased 18,66,199.3 kg of Jaya rice at Rs.28.50 a kg when the market rate was Rs.24.20 a kg. Private suppliers, a set of wholesale rice traders, had procured boiled rice from grain processing factories in Andhra Pradesh at a much lower rate and supplied it to Consumerfed at higher than local market prices. They said the same pattern was seen in other districts also.

The investigators found large quantities of inferior quality rice, red chilli, jaggery, cumin, black gram, and coriander, all items procured from wholesale traders at exaggerated rates, ‘left unattended and spoiling’ at Consumerfed warehouses in the State.

Much of it had been returned by secondary societies, including Neethi stores, after consumers rejected the commodities owing to their bad quality and exaggerated pricing. The investigators said there was serious mismatch between actual stock and that shown on registers kept at Consumerfed warehouses. Deficit in net content of commodities stocked at warehouses, chiefly due to in-house pilferage, was seen.

The VACB said there was no proper accounting or auditing. Consumerfed has incurred an estimated loss of Rs.30 crore. However, large amounts of money were seen spent under the head ‘entertainment expenses.’

The organisation made indiscriminate voucher payments to its staff on unverified expense claims. The VACB noticed serious corruption and nepotism in the appointment of staff. Persons with dubious qualification and experience were appointed as managers in various posts with ‘little or no work to speak off.’ The agency has warned that certain persons could destroy earlier purchase bills and other records to frustrate a possible full-fledged anti-corruption inquiry into the functioning of the organisation.

VACB Director Mahesh Kumar Singhla headed the operation.

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