New Delhi: A whistleblower at the Steel Authority of India Limited (SAIL) was allegedly forced into early retirement after his complaint to the Lokpal led to a CBI probe into alleged corruption at the Maharatna company.
Citing “doubtful integrity and conduct which is unbecoming of an employee of SAIL and obstructs efficiency”, the Public Sector Undertaking (PSU) issued the premature retirement order on 11 February this year.
The general manager-rank individual was dismissed with immediate effect along with three months’ salary, according to the order, a copy of which ThePrint has seen. Five days later, SAIL issued a press release saying 11 executives were retired in “the interest of maintaining efficiency, integrity and accountability of the organisation”. The whistleblower was among them, ThePrint has learnt. The specific reasons behind the early retirement of the other 10 were not immediately clear.
It all began when the whistleblower first wrote to then SAIL chairperson Soma Mondal about irregularities in the PSU’s commercial dealings in November 2022. His allegations pertained to the supply of steel at significantly lower prices to a private firm in Ludhiana, with the involvement of officials from the top echelons of SAIL.
When his complaints came to naught, the whistleblower said he approached the Lokpal in January 2023. The ombudsman directed his complaints to the Central Vigilance Commission (CVC), which found lapses in SAIL’s commercial dealings with multiple private entities.
The Lokpal then directed the CBI to initiate an inquiry, and the latter lodged an FIR in October against an unnamed official of SAIL, Venkatesh Infra Projects Pvt Ltd, APCO Infratech Pvt Ltd, and unknown public servants and private persons. The charges included criminal conspiracy, cheating and forgery. Additionally, the CBI invoked sections 7, 9, and 12 of the Prevention of Corruption Act, which deal with bribery and misconduct by public servants.
Meanwhile, the Ministry of Steel also suspended 29 SAIL officers in January last year, including two directors and four executive directors of SAIL, as well as the current director of the National Mineral Development Corporation (who was with SAIL when the alleged corruption took place).
The ministry, however, reinstated most of the suspended officials, including two directors, in June 2024. While there is no rule prohibiting reinstatement during a pending inquiry, these officials resumed work at SAIL in sensitive positions even as a CBI investigation was underway.
ThePrint has reached the CBI spokesperson through phone calls and then SAIL chairperson Soma Mondal via email for comment. This report will be updated as and when their responses are received. A senior SAIL official refused to comment on the matter.
Suspension, memos
The premature retirement order, the whistleblower said, was not the first time he faced consequences for exposing alleged fraud within the company.
Soon after he first flagged his concerns to chairperson Mondal in November 2022, SAIL suspended him for 10 months. A memo sent through speedpost said it was for using a “personal email to share the company’s commercial information”.
The PSU, according to the whistleblower, identified him since his mail to Mondal had similar contents regarding the alleged irregularities which he raised in the internal meetings.
He was served another memo in February 2023 for making false and frivolous allegations with the intent to “malign senior SAIL officials”.
How the case unfolded
A Lokpal document—seen by ThePrint— shows that the whistleblower filed the complaint against the SAIL chairman, the executive director of marketing and the executive director of sales-ITD.
These officials and their departments, he alleged, were supplying steel to a Ludhiana-based private firm at significantly reduced prices.
“It has been alleged by the complainant that this level of pricing is generally available for supply to government departments only and not to private companies/individuals. The complainant has also alleged that a few senior officers are misusing the guest house of SAIL for personal use and not paying the prescribed rent to SAIL,” the Lokpal document said.
On its part, the CVC inquiry uncovered significant irregularities and possible misconduct involving SAIL’s dealings with Venkatesh Infra Projects Pvt. Ltd and Avon Steel Industries among others. The Lokpal document, which ThePrint has seen, mentions the findings of the CVC.
In its July 2023 report to the Lokpal, the CVC said SAIL signed a memorandum of understanding (MoU) with Venkatesh Infra based on a certification from APCO Infratech P Ltd, a project customer of SAIL, which claimed that Venkatesh was executing reinforcement and structural steel work for 11 infrastructure projects. This certification, however, was issued on 12 September 2020—a full month before Venkatesh was even incorporated, the CVC found.
Additionally, Venkatesh was allegedly granted lower prices compared to other similar project customers. While SAIL officials justified these price variations by citing market conditions, the report concluded that their failure to conduct due diligence resulted in financial losses for SAIL.
Similarly, the CVC inquiry revealed serious discrepancies in SAIL’s pricing policy with respect to Avon.
SAIL officials were fully aware that Avon was using blooms—a semi-finished steel product—to manufacture narrow hot rolled coils. Despite this knowledge, the blooms were priced based on long products, and provided windfall gains to Avon, the CVC found.
“The fact remains that SAIL failed to maximise the revenue (profit) from Avon Steel Industries considering that better quality blooms were supplied to the company, which were being converted by Avon Steel Industries to narrow width HR coils with substantially higher margin,” read the Lokpal document.
A week after the Lokpal handed over the complaints to CBI based on the CVC’s findings, came the steel ministry’s suspensions of 29 SAIL officers, including the two directors. Meanwhile, then SAIL chairperson Soma Mondal approached the Delhi High Court, which granted her a stay in July last year, preventing any action or inquiry against her in the case. Mondal is currently serving as a member of the Public Enterprises Selection Board (PESB).
Upon rejoining work in October 2023, the whistleblower claimed to have uncovered similar irregularities with a similar modus operandi, and submitted a fresh complaint to the Lokpal against four companies linked to the same family as well as other firms.
His September 2024 complaint, a copy of which ThePrint has seen, alleges financial misconduct by SAIL officials in the supply of steel to several more firms.
(Edited by Tony Rai)
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