RTI Investigation (Part 4): Corruption allegations surface against a BJP MP

An affidavit claims Jagdambika Pal, who was with the Congress till a year ago, swindled PSU money meant for CSR.

BySandeep Pai
RTI Investigation (Part 4): Corruption allegations surface against a BJP MP
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The fourth part of Newslaundry’s RTI series, points to serious allegations of corruption against Bharatiya Janata Party Member of Parliament Jagdambika Pal, who is best known for becoming Uttar Pradesh’s chief minister for three days in 1998.

Pal, along with Sudhir Vasudeva, the former chief of Oil and Natural Gas Cooperation (ONGC), and four others are alleged to have swindled lakhs of Corporate Social Responsibility (CSR) money of public sector undertakings.Pal was with the Congress till early last year and a former chairman of Parliamentary Committee on Public Undertakings.

In 2013, when Pal was a Congress MP and chairman of the Committee on Public Undertakings, he had endorsed Ravi Engineering & Chemical Works (RECW), which manufactures bio-mass cooking stove, and its marketing and distributing company Shrutishree Colouring Private Limited.

Pal wrote letters to PSUs urging them to buy cooking stoves from RECW through Shrutishree Colouring Private Limited for distribution under CSR in the rural areas of Jharkhand and Uttar Pradesh.

Every PSU spends at least two per cent of its profit on CSR activities. Generally, PSUs spend this money on development work in the areas where they have operations.An affidavit filed by Santosh Mishra, promoter and 50 per cent shareholder of the Jharkhand-based Shrutishree Colouring Private Limited, to the Bokaro court claims that he and five others -- including Pal, Vasudeva, Ravi Rai and R Babu, who are partners at RECW -- hatched a conspiracy to embezzle government money for personal benefits.

In his affidavit dated 23 November, 2013, Mishra said, “... To embezzle public money, Jagdambika Pal ji planned to take out funds in the name of CSR. Pal along with ONGC Chairman Sudhir Vasudeva and Director Finance made a plan at a meeting in Pal’s official residence at 12, Teen Murti Marg that ONGC using its CSR funds will buy 1000 stoves and will pay Rs 23.39 lakhs. It happened as it was planned. In October 2013, ONGC using RTGS transferred Rs 11, 69,500 to my companies account number 499120110000307.

We then divided this money into six and distributed almost Rs 1, 90,000 each at Jagdambika Pal’s official residence at 12, Teen Murti Marg...”To look into Mishra’s claim, Newslaundry filed an RTI query with ONGC seeking the copy of the letter written by Pal to ONGC and the details of funds released under CSR to Shrutishree Colouring Private Limited. The RTI reply said, “ONGC has approved CSR project proposal on recommendation of Shri Jagdambika Pal, Hon’ble Member of Parliament (Lok Sabha) for distribution of 1000 nos of metallic solid bio-mass Chulha in Siddharth Nagar (UP) through implementing agency, M/S Shrutishree colouring Pvt Ltd (Jharkhand). And the total project cost is Rs 23,39,000.”

Mishra’s affidavit further alleges, “... after getting the money from ONGC, we became greedier and Jagdambika Pal made a plan and in one day he told 33 companies to give money to Ravi Engineering & Chemical Works and my company under CSR.”

Newslaundry obtained, under RTI, a copy of one of the letters written by Pal to other PSUs. Pal wrote letters to these PSUs in the capacity of chairman of Parliamentary Committee on Public Sector Enterprises, requesting them to buy and distribute metallic solid bio-mass cook stove. He requested them to consider buying from a manufacturer named RECW whose cook stoves are marketed and distributed by Shrutishree Colouring Private Limited.

In his letter dated 17 December, 2013, Pal wrote to Chairman & Managing Director of BEML, saying, “I would like to draw your attention to District - Siddharthnagar, Uttar Pradesh, one of the most backward districts of India. The area is widely populated and there is no sufficient gas agency to cater the entire district. Therefore, I have enclosed details and quotation of Metallic Solid Bio-mass Chulha (Firenzel), manufactured by M/S Ravi Engineering & Chemical Works, marketed and distributed by Shrutishree Colouring Pvt Ltd.

”Pal added in this letter: “You are kindly requested to consider distributing at least 2000 numbers of above stoves in the Siddhartha Nagar district ... under CSR scheme with immediate effect. I shall be highly obliged.”

Mishra’s affidavit has a vengeful tone: “All the Bokaro district court, Ranchi High court, Supreme Court and any other agency may please consider every single line to be true and as evidence about how we six people hitched a conspiracy to pocket the government and public money,” Mishra’s affidavit says towards the end. “If I ever refute from my statements given in this affidavit, even then Bokaro district court, Ranchi High court, Supreme Court should consider this affidavit to be true and take legal action against us.”

It isn’t very clear why Mishra chose to disclose this information. (Newslaundry has accessed the affidavit but attempts to get in touch with Mishra did not yield any results.)

Newslaundry reached out to Pal for his response and asked him about Mishra’s affidavit, whether he is aware of it and if he wrote to PSUs asking them to buy the bio-mass stoves.His response is produced below:

Summary

I personally don’t know Mr Santosh Mishra but I remember that one person in the name of Santosh approached me with a product (smokeless bio-mass chullah) of his company (do not remember the name) in 2013, which seemed to be very environmental-friendly and cheap as well as affordable to the poor villagers in the remote area of my constituency district Sidharthnagar. My constituency is one of the poor districts of Uttar Pradesh and many of the areas are inaccessible because of non-availability of roads and frequent floods. Those areas do not have the facility of LPG and LPG stoves so I found it (smokeless bio-mass chullah) as a cheap and better alternative to gas chullah. So, I recommended to some PSUs (don’t remember the name) for the distribution of those environmental-friendly and cheap chullahs in my constituency (Sidharthnagar) under CSR activity.

I am not aware of any affidavit by Mr Santosh Mishra or his whereabouts. I lost contact with him and as I remember none of the PSUs sent any such chullahs to my constituency for distribution to poor people.Yes, I have written a few letters recommending some PSUs (don’t remember the name) to facilitate the distribution of those environmental-friendly bio-mass chullah in my constituency and I feel there was no wrong in this. I liked the product and found it very suitable for the poor women staying in remote rural villages having no LPG facility, as it will give them great relief from the misery of dust and smoke coming out of conventional chullah using wood as fuel in their household. I didn’t keep any contact with Mr Santosh Mishra. Prior to those one or two meetings in 2013 with Mr Santosh Mishra, I had never interacted with him before and after that also I didn’t find any opportunity to interact with him.I am not aware of any allegations made by Mr Santosh Mishra in Bokaro Court.

I am simply and firmly denying it and I will check with the PSUs I had written letters to and if any mischief/embezzlement had taken place anywhere, I would be the first person to recommend the PSU to take strong legal action against that person or the company whom he was representing. One very important information I would like to share is that none of the PSUs sent any bio-mass chullah for distribution to poor villagers under CSR activity. The other important thing I would like to bring to your notice is that if as a public representative (MP) I am recommending any product or thing useful to the poor/needy people in my constituency to be distributed under CSR activity to any PSU, there is nothing wrong or illegal in it. Every PSU has guidelines for their CSR activity and there are very well established financial rules and regulations for procurement or purchase of articles in the PSU as well as guidelines of CVC [Central Vigilance Commission].

My recommendations are only for the distribution of certain number of chullahs in my constituency and not for favouring any company or any person. Not only that, no PSU will and should forget or bypass any financial rules/ guidelines in the purchase or procurement of articles under CSR activity. If any embezzlement had taken place in purchase of those chullahs in any PSUs, I would also recommend CVC for a fair enquiry to be conducted.

Newslaundry also reached out to Vasudev, who’s no longer the ONGC chief. He declined to comment.

Additional reporting: Manisha Pande

The first of the five-part RTI investigation series reveals how MPs used PSUs as cash-vending machines. Part two of the series detailed how a Congress MP used his official capacity to get ads for his media conglomerate. Part three details letters from ministers in the Modi Cabinet and the former UPA government asking PSUs for funds. Part five will look at how certain MPs and MLAs have made it a habit to cull financial favours from PSUs.

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