The Hindu Business Line : Fertiliser scam of 1995 — Govt recovers just Rs 1 cr against Rs 246.47 cr

However, a sum of Rs 245.45 crore still remains unrecovered, out of which a substantial amount of Rs 137 crore remains untraceable. Out of a total recoverable amount of Rs 246.47 crore, only a meagre Rs 1.02 crore has been recovered till date.

The Parliamentary Standing Committee on Chemicals and Fertilisers in its latest report has lambasted the Government for this inordinate delay and has stated that the Department of Fertilisers should pursue the matter so that the legitimate dues are recovered expeditiously.

In the winter of 1995, when rabi crop was at its full swing and the country was desperately short of the most essential of all fertilisers, namely urea, public sector National Fertilisers Ltd (NFL) had entered into an agreement with Karsan Ltd of Turkey for supply of two lakh tonnes of urea spread over the next six months at a price of $190 per tonne amounting to $37.62 million against 100 per cent advance payment.

The 100 per cent advance payment clause was unique to this contract. According to officials in the Department of Fertilisers, "normally canalising agents/State Trading Enterprises pay for the imported urea through a Letter of Credit (LoC). The Government is not aware of any other case where 100 per cent payment had been made in advance by the canalising agency," the officials said.

When Karsan failed to start supplies within the stipulated period ending May 1996, the contract was extended by four months till October 4, 1996. In September, NFL rejected the first shipment from Karsan for not meeting quality parameters.

The contract was terminated on October 6. Karsan did not return the advance. NFL won the case when it took the arbitration to the ICC and Karsan was asked to pay NFL a compensation of $40.69 million along with a five per cent annual interest on the principal amount of $37.62 million.

However, till date, the recovery amount remains miniscule and according to Ministry officials, chances of total recoveries are bleak. "When the funds were transferred in Karsan's account, the very next day all the amounts were transferred in the names of executives of Karsan, their relatives and associates in different countries and only Rs 1 crore was left in the company's account, which is the only amount recovered so far," officials said.

What worries the officials is that more than half of the amount is still not traceable.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
IPCL says Anil Ambani ceased to be director on Jan 20

Diversifying to keep afloat
TCIL enters road construction; ITI into wireless biz

Forex reserves rise by $88 m

Fertiliser scam of 1995 — Govt recovers just Rs 1 cr against Rs 246.47 cr