Thiruvananthapuram: The raids carried out on Kerala State Financial Enterprises (KSFE) which is part of the finance department, headed by minister Thomas Isaac, by Vigilance and Anti Corruption Bureau (VACB) under chief minister Pinarayi Vijayan's home department, have triggered an unseemly controversy.
A fuming Isaac is learnt to have blasted the raids and the irregularities unearthed right in the midst of crucial local body polls. "Whose madness is this " he reportedly asked.
However, sources in the home department said that the raids were planned and executed without their knowledge by vigilance based on specific lead.
Vigilance Director Sudesh Kumar directed the officials to go ahead with the follow-up action on the irregularities unearthed during the raids. A detailed report on the raids would be submitted to the government soon.
However, the vigilance did not dare to issue a statement to the press giving out details of the statewide raids "Operation Bachat", which is the usual practice followed by the department after such surprise actions.
Isaac questions vigilance decision
Isaac said, "I don't know whose madness is this. Who said that the entire money with the KSFE has to be deposited in the treasury? Which law prescribes so? This establishment has been functioning for 50 years. The law need not be decided by vigilance. You have a law department for interpreting rules. In case there are genuine issues, we will examine them. We will give a reply when vigilance seeks our reply on their findings."
Reacting to Isaac's remarks, Leader of the Opposition Ramesh Chennithala reminded the former that Vigilance was under the chief minister. He said CM Vijayan should answer whether the raids were stopped midway.
He said Isaac was getting agitated whenever irregularities in his department were flagged.
The vigilance raid has put the finance department which is already caught in a major controversy for making public the CAG report pertaining to KIIFB, on the defensive.
When CBI registered the case in connection with the Life Mission project, the home department through a swift move, got the vigilance to register a case and seize documents from the project office. But what has annoyed the finance minister now is that the vigilance did not think about the political implications before carrying out the raids against KSFE.
KSFE is the biggest profit-making public sector undertaking in the state. The raids have been conducted at a time when laptop distribution to school children through Kudumbasree is in the doldrums. The recent CAG report had also pointed out irregularities that were similar to the ones detected by vigilance now. The finance department is apprehensive that the raids might adversely affect KSFE's credibility.
The vigilance findings
1. Lapses on the part of 10 branches in keeping pledged gold in safe custody. Pledged gold fraud in four branches.
2. The norm of depositing the first lot of chitties with public sector banks, treasury branches as a secure investment is being flouted by most branches and the money is being diverted.
3. Even those who gave bounced cheques are being allowed to participate in the draw and paid chitti money.
4. In place of including 40 persons only 25-30 are included , the rest of the names are fake. The reason given is that during the draw they are not depositing the money. KSFE is giving money from its own fund to people who win chittis.
5. The Rs 2-5 lakh monthly chittis are in great demand in certain areas. There are people who deposit up to Rs 10 lakh a month.
KSFE functioning transparent : Peelipose Thomas
Pathanamthitta: KSFE chairman Peelipose Thomas said that the public sector undertaking has safeguarded transparency and reliability in its transactions since the last 50 years.
He said an audit is carried out more than once in the branches every year. Besides, the deficiencies pointed by the finance inspection wing and local fund audit wing after examining documents, are rectified accordingly. There is a CAG audit as well.
As per the directions of the state government the chitty security amount is deposited in treasury otherwise it will not be possible to conduct chitties. In case if the cheque given by one or two persons gets bounced at the time of the start of chitty with 40 members, then new members are enrolled in their place.
People are enrolled in chitty only after examining documents for identity proof, PAN Card and bank passbook. All money transactions - lending and receipt - are carried out in a legal manner. Benami transactions are not allowed.
Even though some cheques given in the beginning are returned because of shortage of funds in the bank, new people are enrolled in their place. The daily collection is not deposited in the treasury in order to pay money to those who bag the chitty. This money is deposited in the banks.
KSFE has deposits worth Rs 7,000 crore in the state treasury. There is not even a single instance of gold being stolen from any of the branches.
KSFE collected dues worth Rs 1,500 crore last year.
Thomas said that they are prepared to rectify if mistakes are pointed out in the transactions in any branch of KSFE.