The Supreme Court on Monday issued notice to the Union government and others on a public interest writ petition that questioned the appointment of IES officer Atul Kumar Rai as CEO and MD of the Industrial Finance Corporation of India Ltd. (IFCI) in violation of all norms.
A Bench of Justices Aftab Alam and R.M. Lodha issued the notice, returnable in six weeks, on the petition filed by the Centre for Public Interest Litigation after hearing counsel Prashant Bhushan.
Counsel said there were irregularities in the appointment as well as in the financial institution itself.
The petitioner said the Centre, in the last eight years, released Rs.2,409 crore as grant-in-aid (out of the total bailout package of Rs.5, 220 crore), Rs.400 crore as loan to the IFCI, and invested Rs.523 crore in Optionally Convertible Debentures.
Huge funds
Despite the huge funds it got from the government, the IFCI continued to hold itself out as an independent company over which the government had no control, and declared itself to be out of the purview of the RTI Act, the petitioner said.
The government too was taking the stand at various forums that it could not interfere in the functioning of the institution, saying that it came under the Companies Act and was no longer a statutory body
Holding that the induction of Mr. Rai as whole-time member in the IFCI Board was completely mala fide, the petitioner sought a direction to remove him from the post, to initiate a probe into the allegations of administrative and financial irregularities in the institution and to take consequent action.
