In an audit report tabled in Parliament on Thursday, the Comptroller and Auditor-General (CAG) named Union Minister Nitin Gadkari as one of the “promoters and/or directors” of Purti Sakhar Karkhana Ltd., a company that, it said, was sanctioned a loan of Rs. 84.12 crore by the Indian Renewable Energy Development Agency (IREDA) in violation of guidelines.
“… IREDA could recover only Rs. 71.35 crore out of Rs. 84.12 crore recoverable from the borrower, resulting in a sacrifice of Rs. 12.77 crore,” the report said. The contentions of the management of Purti for doing so were untenable, it added.
Purti Sakhar Karkhana did not comply with the conditions for the interest subsidy, the report observed, saying: “The borrower violated the terms and conditions for subsidy schemes.”
The project, which was to be commissioned in February 2004, was finally commissioned in March 2007 and subsequently switched over (June 2009) to 100 per cent coal-based operation as against an allowance of up to 25 per cent prescribed in the subsidy scheme.
The promoters and/or directors of the borrower company had given their personal guarantee for the loan.
The project was commissioned on March 18, 2007, and the case was classified as a non-performing asset on March 31, 2007.
Loan turns NPAThough the loan became a non-performing asset (NPA) in March 2007, the actual benefit of the subsidy amounting to Rs.1.66 crore was passed on till December 2009 and unutilised subsidy of Rs.0.22 crore refunded to the Ministry in August 2010.
According to the CAG audit, “Various irregularities in implementation of the Ministry of New and Renewable Energy’s subsidy schemes were observed”.
