Sleuths of the Central Bureau of Investigation (CBI) on Friday searched the office and residence of an assistant general manager of the public sector Cochin Shipyard Limited (CSL) on charges of conspiring with a scrap dealer to ship away some 300 truckloads of steel scrap at an arbitrary price, causing huge financial loss to the company.
It also searched the premises of the South Indian Scrap Traders at Palarivattom and Irimpanam. A first information report filed by the federal agency before a special judge in Ernakulam in this regard alleges that N. Ajith Kumar, AGM (S&S) of the CSL, conspired with P.A. Mohammed Ali to remove a total of 146.47 metric tonnes (MT) of scrap, valued at ₹21,41,684 at an arbitrary price of ₹1.5 lakh.
The CBI maintained that the yard had decided last year to dispose of 1,000 MT of ship repair steel scrap from its quay-1 by e-auction through MSTC, Bangalore. The yard’s reserve price fixing committee had fixed the reserve price of the scrap at ₹18,500 per MT and a subject-to-approval price of ₹17,575 per MT.
But the e-auction had to be cancelled, as the highest bid was way lower than the prices approved. Similar scenario forced cancellation of four re-auctions held later.
In the wake of the development, the yard engaged a private valuer who fixed the reserve price of the scrap at ₹12,418 per MT and subject-to-approval price at ₹11,797 per MT. The South Indian Scrap Traders, which quoted ₹14,622 per MT, won the contract in the auction held in February this year.
The CBI alleged that following a conspiracy with Mr. Ali, Mr. Ajith Kumar allowed removal of scrap from the yard without payment of advance as per the laid out schedule.
While the entire steel scrap had to be removed on ‘as is where is’ basis, the officer allowed segregation of quality steel and cutting of scrap using the hazardous LPG gas in violation of the tender stipulation that only acetylene/oxygen gas be used for the purpose, the agency alleged.
Worse, Mr. Ali, in a letter to the yard, said the entire steel scrap from quay-1 – 799.79 MT in all – was removed and “old tin and sheets mixed with soil” remained in the area. The CBI maintained that Mr. Ajith Kumar showed undue haste in favouring the agency removing the mixed material and the contract was awarded to the agency arbitrarily for ₹1.5 lakh. There was no reserve price/ subject-to-approval price for the new contract and Mr. Ajith Kumar asked the security officials manning the yard premises not to insist on gate pass for shipment of the material.
Sources in the agency said the searches were on at the time of filing this report and that it would also probe possible involvement of more officials in the case. The yard authorities said that it was too premature to offer any comments on the development.