CBI raids Cochin Shipyard to nail graft in sale of steel scrap

KOCHI: The CBI’s anti-corruption unit at Kochi carried out a raid at the Cochin Shipyard Limited (CSL) as part of a probe into graft in the auctioning of the ship repair steel scrap. The raid started in the morning and was still continuing at 3.30 pm.

The shipyard, which is constructing India's first indigenous aircraft carrier INS Vikrant, was recently listed on the stock exchanges.

Officers said CBI has registered a case against CSL assistant general manager N Ajith Kumar, Kochi-based company South Indian Scrap Traders and its proprietor Mohammed Ali.

The FIR registered in the CBI court in Kochi states that CSL decided to conduct an e-auction of 1000 metric tonnes (MT) of ship repair steel lying in quay-1 through MSTC, Bangalore. The reserve price fixing committee had fixed a rate of Rs 18,500 per metric tonne and a subject-to-approval price of 17,575 per mt. However, e-auction was cancelled as the highest bid of Rs 14,632 was less the fixed price.

Fresh bids were called on four occasions in November and December 2016. But the highest bid remained less than the reserve price.

Then a private valuer was engaged as per whose recommendation the reserve price was fixed at Rs 12,418 per mt and a subject-to-approval price of Rs 11,797.10 per mt. In the auction held on February 8, 2017, the scrap was awarded to South India Scrap Traders which quoted Rs 14,622 per mt.

The sale order decreed that advance payment must be made for every 250 metric tonne of scrap and a total amount of just over Rs 1.55 crore in four phases.

According to CBI, assistant general manager Ajith Kumar colluded with Mohammad Ali and allowed the South Indian Scrap Traders to pick up its payload without paying the advance amount.

As per the sale order, the buyer was required to clear the entire available quantity of scrap from earmarked areas on the CSL premises. Segregation of scrap was not permitted. However, Ajith Kumar permitted the company to segregate and take out quality steel scrap from the earmarked areas.

Further, only acetylene/oxygen gas was permitted for hot cutting works. However, LPG gas, which is less costly and hazardous, was used.

After picking up quality steel, South Indian Scrap Traders submitted a letter to CSL stating that 799 mt of waste was cleared and only old tin and sheets mixed with soil and mud were remaining.

Following the inauguration of CSL’s new dry dock, the decision was taken to remove the rest of the scrap on an urgent basis. For this, Ajith Kumar approached Mohammad Ali and his company and a deal was struck to remove the remaining scrap for just Rs 1.5 lakh. This was done without fixing a reserve price.

As many as 300 loads of scrap were removed without weighing from June 7, 2017, and June 12, 2017. In spite of filing a letter that all quality steel had been removed earlier, the company transported 146. 47 mt of good quality steel, with a value of Rs 21,41,684.

"The raid was held at CSL, the residence of Ajith Kumar, the office and scrap yard of South Indian Scrap Traders in Palarivattom and Irupanam. The accused will be interrogated in the coming days. We have recovered some documents. We are probing the role of other CSL staffers in the graft," a CBI official said.