The Commission had scrutinised the sanction of loans worth about Rs 1,000 crore to various companies.
NEW DELHI: The Central Vigilance Commission (CVC), in a report submitted to the Supreme Court, has severely indicted former urban development minister and BJP leader Ananth Kumar and the senior management of the public sector Housing & Urban Development Corporation (Hudco) for financial irregularities and misuse of official facilities.
The Commission had scrutinised the sanction of loans worth about Rs 1,000 crore to various companies, including builders of the Gurgaon-Delhi expressway, Jaypee DSC Ventures, JP Greens of Noida, Sanghi Industries, Calcutta Electric Supply Company Ltd and Shrishakti Resorts and Hotels Ltd of Hyderabad.
It also inquired into the sanctioning of loans worth Rs 5,436 crore at a single board meeting, allegedly with inadequate appraisal.
The CVC has asked the government to order an inquiry by the Central Bureau of Investigation to probe the possibility of a nexus between Hudco officials, state government agencies and private firms with regard to investments in the bonds of four agencies, namely TAPI Irrigation Development Corporation, West Bengal Infrastructure Development Corporation, Himachal Pradesh Infrastructure Development Board and Vidarbha Irrigation Development Corporation.
The CVC believes that undue commissions and brokerages were paid to private companies when Hudco invested in these bonds.
The inquiry has reportedly revealed many instances of arbitrariness by top management in taking credit decisions. It called for a special audit to examine whether the funds borrowed by Hudco from public sector banks were used for their stated purposes.
While recommending severe penalty and action against Hudco chairman and managing director PS Rana, the commission called for initiating appropriate disciplinary action against officials who were involved in the use of facilities beyond their entitlement during the ministerial tenure of Ananth Kumar and for not keeping proper log books and other records.
On being contacted, Rana alleged that "The CVC report is one-sided. Appropriate reply will be prepared and submitted to the court." He refused to elaborate on grounds that the matter was sub judice.
Ananth Kumar was unavailable for comment at his Bangalore residence and his staff said he was busy at a meeting. Kumar and his staff are alleged to have misused the services of a cook and billed unwarranted mobile phone expenses to Hudco.
The report alleges that Kumar used 38 staff members, over and above the limit sanctioned for him as minister, for personal purposes.
Regarding lending to JP Green Ltd, Noida, Hudco apparently sanctioned Rs 146.20 crore in March 2004, for establishing a golf course. The CVC says that Hudco took up a higher exposure than provided for in its guidelines and that, too, without any credit rating of the venture.
"A number of waivers were given from established lending norms without valid justification," says the report. However, it also noted that the borrower had not defaulted on any loans earlier.
The commission also found prima facie evidence to warrant a CBI inquiry in the sanctioning of a loan to Hyderabad-based Shrishakti Resorts, which had defaulted in the repayment of loans to a previous lender, IFCI Ltd.
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