NEW DELHI: The government has ordered a probe by the Central Bureau of Investigation (CBI) into a Rs 133crore urea import deal by National Fertilizers Limited (NFL).
NFL had advanced $37.2 million to Turkish firm Karsan Limited on December 5 as 99% cash prepayment for supply of 2 lakh tons of urea. However, NFL has been unable to receive any shipment from Karsan though the Turkish firm was to deliver the entire quantity within five months of payment.
What is being questioned is NFL advancing the entire money simply because “the suppliers did not agree for the letter of credit/bank guarantees route,” Moreover, doubts have been raised about the validity of the deal since, so far, the Turkish firm has failed to furnish the shipment schedule even, although the term period of the deal comes to an end on May 4. According to information available, NFL transferred $37.2 million to a bank in Switzerland after Karsan changed its account from a Turkish bank. In the contract, it had been agreed that the money would be deposited in a Turkish bank.
Even for the balance one per cent of the amount which has not yet been credited to M/s Karsan, the Turkish firm had directed the NFL to deposit it in the Swiss bank. However, the names of both banks are being kept under wraps.
The CBI probe was advised by Fertilizer Secretary, I Chaudhuri, on the basis of the report submitted by NFL’s executive director (vigilance) and on the spot assessment done by the investigating team which went to Turkey. The probe had begun at the be Singh Yadav, who, in a letter dated April 17, told the Secretary, “I am convinced that the matter is very serious as Now One can suspect foul play because of delay in dispatch of urea” The report by NFL executive director (vigilance) states that “the deal was ill-conceived and bad from the company’s point of view.” In a letter dated April 11, Chaudhuri had informed the Fertilizer Minister that the “deal was done in a hurry without dos diligence, without due legal vetting as corroborated by ED (vigilance) in his preliminary investigations.”
Commenting on the legal opinion on whether the NFL chairman cum-managing director (CMD) and the board of directors were empowered to take that legal firm’s opinion was “not Satisfactory” as it had based the validity of the CMD signing the contract on “all-embracing duties and responsibilities of the CMD as the head of NFL.”
The delegations which meant Turkey had a hard time as Karsan’s official refused to divulge the whereabouts of their chairman, Tuncay Alankus, who was away from Ankara. Karsan’s vice-president C Karanci met the delegation once “before he too left Ankara, again for an undisclosed location.” on April 9.
During this meeting Karancl “exhibited a noticeable lack of appreciation of the government of India arising out of the nonperformance of M/ Karsan till now.”
Karancl harped on the firm’s perception that NFL’s and the Indian government’s anxiety arose from “political” concerns at election time in India Karancl said that “Karsan shall be in a position to furnish the shipment schedules in the week ending April 20 and not earlier.” However, no schedule has yet been supplied by the firm.
Article extracted from this publication >> May 1, 1996
