Corruption unearthed at Malabar Cements

G. Prabhakaran

Senior officials in the dock for irregularities in the purchase of fly ash, limestone

Vigilance finds ‘deliberate lapse’ by the company

Unearths inflated bill for security services

PALAKKAD: The Vigilance and Anti-Corruption Bureau (VACB) has found large-scale corruption in the purchase of limestone and fly ash and awarding of contract for transporting and appointment of staff in the public sector Malabar Cements Limited (MCL) at Walayar near here.

The VACB, which inquired into the purchase of limestone by MCL from a private company, found misappropriation of Rs.27 lakh within just six months of supply of the material. According to VACB officials, six senior officials, including its former Managing Director S.S. Moni, the first accused in the case, were involved in the corruption case.

The other accused senior officials are Muraleedharan Nair, former General Manager; Udayakanthi, geologist; Anandkumar, chief chemist; Jose Thomas, mines manager-in-charge and proprietor of Cresent Mines and Minerals, Tamil Nadu; and Mohammed Ferozesh.

The VACB, headed by Deputy Superintendent of Police Saifullah Sayeed, in a report submitted to the Vigilance Director said that the limestone was purchased from Cresent Mines and Minerals, a private company, ending the earlier contract with a public sector company of the Tamil Nadu government. The Indian Bureau of Mines (IBM) found that this firm can supply only Rs.1,650 tonnes a day. According to the agreement, it should supply 5,000 tonnes a day.

When MCL invited tenders for limestone supply two companies submitted the tender papers. Only one was qualified to participate in the tender. But the company did not go in for re-tender and gave the contract to the single bidder.

The limestone was bought on the plea that the stock at the Pandarathumala mines of MCL was of inferior quality, and insufficient.

Later, the deposit of MCL was found to be of good quality and could last from 10 to 15 years.

It was found that MCL had given an advance of Rs.32 lakhs to the company for installing a weigh bridge, laboratory and for developing infrastructure. These are not parts of the contract. MCL also gave a bank guarantee for Rs.50 lakh.

When the new MCL management found violation of agreement by the suppliers, the supply of limestone was stopped on January 12, 2007. This brought a huge loss to MCL, Vigilance sources said.

Fly ash supply

In the preliminary inquiry on the supply of fly ash, it was found that MCL, which held discussions with the Tamil Nadu Electricity Board for fly ash from its Neyveli lignite plant, decided to award the contract to ARK Wood and Metal Private Limited, a company registered at Coimbatore by a business group of Palakkad.

The Vigilance found ‘deliberate lapse’ by the company in not entering into an agreement with a public sector company as per the policy of the Kerala government and giving the contract to a private company at an exorbitant rate.

Inflated security bill

The investigation also unearthed an inflated bill for security services. MCL paid for 100 security personnel, but there were actually only 50 persons on duty. The remaining were working in commercial establishments run by a former contractor of MCL.

The Vigilance has begun investigation on contracts between 2003 and 2006 as directed by the High Court on a petition filed by Issac Varghese from Palakkad.

But trade unions leaders of the MCL feel that since the Controller and Auditor General found irregularities to the tune of Rs.400 crore it should be inquired by an agency with nation-wide jurisdiction like the Central Bureau of Investigation.