Sardinha indicted in bonds scam

Sandesh Prabhudesai
19 June 2001  

After three former Congress ministers arrested in three difference scams, former chief minister Francisco Sardinha is now being indicted into a bonds scam here.

Incidentally, the alleged illegal act, probed into by one-man inquiry commission appointed by the BJP government, took place during the regime of a coalition government, which the BJP was part of.

Chief minister Manohar Parrikar said he will go ahead strictly as per the legal advise in this regard, while admitting that it is a gross irregularity. He has been advised by the commission to consult legal experts and decide whether Sardinha's action amounts to corrupt practice.

While denying corruption charges, Sardinha has however thanked Parrikar for appointing a commission, which, according to him, gives him a clean chit. Former GPSC chairman Arvind Bhatikar, a retired IAS officer, probed into it.

The 28-page report however clearly states that Sardinha issued orders to engage a private firm to raise bonds of Rs 100 crore in contravention of rules, thus raising doubts of indulgence in corrupt practices.

The commission has established a fact that M/s Triveni Management Consultancy Service Ltd was assigned the job of raising bonds of private placement at higher rate of commission when ICICI was engaged for a similar job one month before that, at a much lower rate of commission.

On 8 August last year, Sardinha had approved finance secretary's proposal of renewing agreement with the ICICI till August 2002, to raise funds for the state from time to time, at a commission of 0.09 per cent, at an interest rates of 11.85 to 12.25 per cent.

However, on 11 August, Sardinha sent Triveni's proposal to finance secretary, proposing to raise funds at 12 per cent interest and a commission of three per cent. In spite of bringing to his notice that ICICI interest is much lower, the former chief minister ordered on 11 September to engage Triveni at the commission rate of 2.9 per cent.

As per the findings, it could have incurred a loss of Rs 2.68 crore to the public exchequer for raising Rs 100 crore bonds, but could not raise more than Rs 57.03 crore. Its commission amounted to Rs 1.52 crore.

Finally, only Rs 1.13 crore was paid to Triveni as the Parrikar government, which came to power subsequently, brought down the commission rate at 2.2 per cent while allowing 10 days more to Triveni due to political instability in between.

"I saved Rs 39 lakh by lowering the commission rate", now claims Parrikar. But Sardinha alleges that Parrikar had gone ahead with the bond issue, which he had withdrawn after his government had reduced to minority.

Sardinha still claims that ultimate calculation of commission and interest shows that Triveni rates were much lower. The ICICI had to raise funds at the interest rates between 11.85 per cent to 12. 25 per cent, against Triveni's flat 12 per cent rate.

Countering the commission finding that Triveni's letter was directly processed from CMO unlike other agencies who went through finance department, Sardinha said he would continue the practice even in future, though comments of concerned department would be sought later.

But the commission has observed that even the finance department had failed in following proper tendering procedure, also holding departmental officials responsible for lapses.

Bhatikar however has not proposed any action against the officers, stating that any officer would have acted in the same manner in today's political and administrative environment where straight-forward officers are labelled as negative.

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