Bengaluru: An amplifier that costs Rs 3,799 procured at Rs 63,720, a box projector valued at Rs 28,000 procured at over Rs 4.42 lakh, a CCTV and monitor procured at Rs 6.72 lakh. These are some of the inflated purchases approved by the Karnataka State Electronics Development Corporation Limited (Keonics), set up with the primary objective of promoting the electronics industry.
The corporation is under the scanner for financial irregularities allegedly committed between 2018 and 2023, a period in which mostly the Bharatiya Janata Party (BJP) was in power in Karnataka.
According to a report by the Accountant General of Karnataka, several items were procured by Keonics for departments of the state government and for fulfilling other requirements at inflated rates of 38 percent to 1,577 percent, leading to a loss of around Rs 300 crore to the state.
“There have been about 45 different observations (of malpractices) which range from falsified third-party reports, quoting inflated prices on products. So, based on the report, an inquiry committee was constituted. The total extent of these 45 deviations is about Rs 300 crore,” Sharath Kumar Bache Gowda, Chairman of Keonics, told ThePrint Thursday.
Findings of the report were released after the Keonics Empanelled Vendors’ Welfare Association wrote to President Droupadi Murmu over unpaid bills and even requested her to grant permission for them to be “euthanised”.
“We are tired of being harassed due to the non-payments of our bills that are due which is affecting more than 6,000 families working with KEONICS. We are seeking your permission for euthanasia. We all want to die at once,” the vendors wrote.
Keonics, which is largely operated under the larger IT/BT department, has found itself in the middle of corruption allegations and a blame game between the Siddaramaiah-led Congress government and the previous one led by the BJP.
The Congress stormed to power in Karnataka in 2023 over the “40 percent commission” platform, alleging widespread corruption by the BJP-led government. But since May 2023, the Congress government has itself been dogged by allegations of graft, including the MUDA “scam”, alleged diversion of funds in the Valmiki development corporation, and an excise scandal.
Also Read: MUDA scam ‘depicts stretching arms of undue influence’. What HC said in nod to probe Siddaramaiah
‘Unholy trinity’
Keonics was set up in 1976 with the sole objective of promoting the electronics industry in Karnataka, procuring and providing high-quality infrastructure for IT industries, spreading IT education to the masses and providing state-of-the products and service for e-governance. Its IT operations span areas of ERP solutions, web portals, software development, IT consultancy, IT training and networking.
But its procurement policies have been under the scanner for several years now.
“Not that anybody is innocent over here, but the user department that placed the order is as culpable as the vendor, who is as culpable as the Keonics official who sanctioned the order,” Bache Gowda said, referring to the inflated purchases.
He referred to it as the “unholy trinity” which facilitated corruption and diversions that have cost the state hundreds of crores.
However, Vasant Bangera, president of the vendors’ association, told Republic Kannada, “If there has been any misappropriation, that is the fault of Keonics officials, not the vendors.”
“You (Keonics) called for a tender, we participated and the lowest bidder was awarded the tender. We have completed the work, given the work-done certificate and submitted it to the department,” he added.
The government-appointed inquiry commission found that third-party inspection is mandatory for all equipment contracts over Rs 50 lakh. But this was not followed.
“On scrutiny of records, it was observed that out of 304 test-checked tenders, in 162 tenders, payments of Rs 76.55 crore were made without conducting the third-party inspections. More than 50 percent of the tenders were paid without conducting third-party inspection and confirming the delivery of goods,” states the report shared by the IT/BT department.
In his response to the BJP’s allegation of widespread corruption in Karnataka, IT/BT minister Priyank Kharge said the Rs 300 crore misappropriation was just the “tip of the iceberg”.
In a long post on X Tuesday, he accused the erstwhile BJP government of allowing payments based on forged third-party inspections, fake bills before supply of goods, and overpayments for unexecuted work.
The BJP, too, has been trying to keep the pressure on the Congress government.
Speaking to reporters, BJP leader C.N. Ashwath Narayan, said: “In a situation where his own position as CM is unstable with several of his cabinet colleagues stating that they want to become CM… in such a situation in different departments, contractors, officials, they are all in a bad state and not getting any justice.”
“The payment for their bills is due and the big question is how much is the percentage (of bribe). There is a percentage for giving works and even clearing bills,” he alleged.
(Edited by Nida Fatima Siddiqui)