Ex-Governor Satya Pal Malik’s bribery allegations: what CBI is probing in J&K

While Malik did not specify what files those were, one of these pertained to the government’s deal with Reliance General Insurance for providing health insurance to government employees. Malik had cancelled the deal in October 2018. The other matter referred to civil works relating to the Kiru Hydel Power Project.

What happened after his allegations?

Last month, J&K Lieutenant-Governor Manoj Sinha announced that the UT administration had decided to hand over the probe to the CBI.

The two cases were referred to the CBI on March 23. “There had been allegations of malpractices in awarding contract of J&K Government Employees Health Care Insurance Scheme to Reliance General Insurance Company Ltd and awarding of contract with respect to civil works of Kiru Hydroelectric Power project to a private firm. Reports in these matters were sought from Finance Department and Anti Corruption Bureau… the competent authority in the J&K government has decided to refer these cases to CBI for investigation,” the UT administration’s letter to CBI said.

What is the case against Reliance?

One of the two FIRs names Reliance General Insurance Company and Trinity Reinsurance Brokers Ltd as accused. It says the allegations as mentioned by the UT administration “prima facie disclose that unknown officials of Finance Department of Govt of J&K by abusing their official position in conspiracy and connivance with Trinity Reinsurance Brokers Ltd, Reliance General Insurance Company Ltd and other unknown public servants and private persons have committed the offences of criminal conspiracy and criminal misconduct to cause pecuniary advantage to themselves and caused wrongful loss to the state exchequer during the period 2017 and 2018…”

The government had floated tenders for group health insurance to government employees, but only one bid was received. The government then hired insurance broker Trinity to float tenders on its behalf. Seven insurance companies bid and Reliance qualified. It was disbursed a premium of over Rs 61 crore by the state administration.

After Malik raised a red flag, the matter was examined by the state Anti Corruption Bureau and Finance Department.

What did these probes find?

After examining all issues relating to the award of the contract to Reliance — which included eligibility criteria being changed in the middle of tendering process, non-transparent selection of the insurance broker, and the number of employees being artificially jacked up to provide benefits to Reliance — the ACB in its report dated November 27, 2021 held that “no irregularity has been found out during the course of verification by the ACB”.

It only recommended recovery of Rs 44 crore from Reliance as excess premium since the contract was cancelled.

But the Finance Department, in a report on February 10, held that there were irregularities in the award of the contract. These included the e-tendering process not being followed, change of criteria for re-tender after only one response was received to the first tender, changes in agreement with Trinity after it was already signed, and release of the first instalment of premium before the agreement was signed with Reliance.

What is the Kiru Hydel case?

It pertains to award of civil works to the tune of Rs 22,000 crore in the Kiru Hydroelectric Project in Jammu by CVPPPL to Patel Engineering Ltd in 2019.

The CBI has booked then CVPPP chairman and IAS officer Naveen Choudhary, MD MS Babu, and Directors M K Mittal and Arun Mishra, apart from Patel Engineering. The FIR says an investigation had been conducted by the J&K ACB and the Power Department in the matter.

“Perusal of these reports reveals that in award of civil works package of Kiru Hydroelectric Power Project, guidelines regarding e-tendering were not followed and though a decision was taken in the 47th Board Meeting of CVPPPL for re-tender through e-tendering with reverse auction, after cancellation of ongoing tendering process, same was not implemented and the tender was finally awarded to M/s Patel Engineering,” the FIR says.

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The project, whose cost is estimated at Rs 4,287 crore, has been marred by allegations of substandard work and failure to provide jobs to local youth. The ACB probe had observed that the tender for the project had been cancelled in the 47th board meeting of CVPPPL, but was revived in the 48th and awarded to Patel Engineering.