In a bid to increase transparency, accountability and trust of consumers, the government has advised the National Dairy Development Board (NDDB) to extend provisions of the Right to Information (RTI) Act, 2005 to its subsidiaries, including Mother Dairy Fruits and Vegetables Pvt. Ltd (MDFVPL) and NDDB Dairy Services among others.
The Ministry of Animal Husbandry, Dairying and Fisheries recently told the Parliament that as NDDB Dairy Services was set up through a Rs 200 crore contribution from NDDB, it has advised NDDB to “extend the provisions of the RTI Act, 2005 to its subsidiary companies including NDDB Dairy Services.”
Sanjeev Kumar Balyan, Minister of State for Fisheries, Animal Husbandry and Dairying, further told the Parliament that both the Department of Legal Affairs and Ld. Solicitor General have opined that Mother Dairy should qualify in the semi-government, if not a fully government, dairy as all of its shareholding is government-owned and in line with the same it has requested NDDB board to “put the decisions of MDFVPL in public domain in the interest of transparency, accountability and also to increase trust of consumers.”
The minister said that the Central Information Commission (CIC) had in its order dated April 15, 2011 given judgment that MDFVPL is a public authority under clause (i) of Section 2(h) of the RTI Act and it will appoint a CPIO and the Appellate Authority as per the mandate of the RTI Act.
While MDFVPL’s appeal against the CIC order was dismissed by Delhi High Court on February 2, 2015, the divisional bench of high court vide order dated March 17, 2015 stayed the order under appeal. So, while MDFVPL is currently out of the ambit of RTI Act, the ministry has through a recent letter requested NDDB to accept the orders of CIC and Delhi High Court dated April 2011 and February 2015, respectively.
[ie_news_paper_quote title=”Explained ” headline=”Aimed at ushering in transparency in NDDB subsidiaries” description=”Till now, Mother Dairy managed to stay out of the ambit of the RTI Act, even though it has been a government-owned entity. However, the decision by the Ministry of Animal Husbandry, Dairying and Fisheries to bring Mother Dairy and other subsidiaries of NDDB under the RTI Act will usher in higher standards of transparency and accountability.”
“This Ministry vide letters dated 10.12.2018 and 10.07.2019 has taken a view and requested NDDB Board, which owns 100 per cent shares of MDFVPL, to suo moto accept the orders dated 15.4.2011 and 2.2.2015 of CIC and Delhi High Court and put the decisions of MDFVPL in public domain in the interest of transparency, accountability and also to increase trust of consumers. The decision of the Board of NDDB in this regard, is awaited,” Balyan told the Parliament last Friday.
Over the last few months, MDFVPL has been in the news over its investment of around Rs 190 crore in the IL&FS Group and over allegations of fraud amounting to around Rs 1,000 crore. In May, The Indian Express reported that an individual Dharmendra Pratap Singh had alleged fraud amounting to over Rs 1,000 crore at MDFVPL and had sent his complaint to the Department of Economic Affairs, Ministry of Finance.
While the Department of Economic Affairs had directed the same to the Ministry of Corporate Affairs on April 29, 2019, “for necessary action under intimation to the department,” it had also forwarded the same to the Ministry of Agriculture and Farmers Welfare. Later, through a written response to Department of Animal Husbandry and Dairying, NDDB had termed the allegations of fraud as “false and baseless”.
The complainant alleged various instances of fraud including investment of Rs 190 crore of farmer dues in the debt-ridden IL&FS Group at a time when the infrastructure major was already defaulting on its debt papers and alleged fraud in utilising contributions of more than Rs 450 crore from NDDB in illegally setting up over 15 subsidiaries and channelising Rs 100 crore into them and then making the companies disappear.
However, in its response to the Ministry of Agriculture and Farmers Welfare, NDDB said, “the investments in IL&FS were initiated in February 2016” under the previous chairman and MD and that these investments were made on temporary surplus cash available with the company.
It further pointed out that “even the Central Government Employees Provident Fund Organisation and private provident fund trusts (including GCMMF – AMUL) have made investments in IL&FS.” NDDB made the case that, “shouldn’t these organisations be also investigated whether powers to be in these organisations have received kickbacks,” adding that “no payment is due to farmers from MDFVPL.”