VACB detects corruption in Consumerfed rice purchase in Kerala

At least five grain wholesalers profited from operations

Forensic auditors working for the Vigilance and Anti-Corruption Bureau (VACB) have reported to the government that at least five ‘favoured’ grain wholesalers in the State had ‘hugely profited’ from Consumerfed’s decision to procure rice at ‘higher than market rates’ during 2012-13.

The controversial decision, taken at a time when there was reportedly adequate rice production in the country, reportedly caused the State exchequer an estimated loss of Rs.1.6 crore in Kollam district alone. The auditing of Consumerfed’s operations during the period in other districts was under way, VACB enforcers said.

The VACB identified the main beneficiaries of the alleged rip-off as Andhra Pradesh Rice Corporation, Changanassery; Babu Stores, Nallila, and Venkateshwara Traders, Mathilil, both in Kollam; Balaji Corporation, Kochi; and Sree Krishna Traders, Mulankadakom. The VACB was investigating the traders on the charges of cheating and corruption.

It had also named the members of the Central Purchase Committee of Consumerfed, the apex body of consumer cooperative societies in Kerala, chiefly its then managing director Reji G. Nair, and chief purchase manager R. Jayakumar, as the main accused in the graft case (VC 4/13/SRT), sources said.

The crux of the VACB’s case was that the accused had ‘betrayed’ Consumerfed’s stated aim of making provisions, chiefly rice, pulses, and edible oil, available at the lowest rate possible to citizens and thereby caused undue financial advantage to the traders and consequent loss to the government.

The auditors had chiefly examined Consumerfed’s purchase of three popular varieties of rice; Jaya, Matta and raw rice. They found that the Kerala State Civil Supplies Corporation (Supplyco) had purchased the same varieties of rice from comparable wholesalers during the same period at a far lesser rates than Consumerfed.

Last financial year, Consumerfed had reported accumulated loss of Rs.128.63 crore. Nevertheless, the institution, which operated on government grants and loans, had made ‘indiscriminate voucher payments to its staff on unverified expense claims.’

It had appointed persons with dubious qualification and little or no work experience in newly created, namesake, managerial posts of scarce consequence to the organisation’s operations. The VACB said it found provisions ‘left unattended and spoiling’ at Consumerfed warehouses in the State after secondary societies rejected the rations on the ground that they were highly priced or of inferior quality.