Explained: What is the tuna export case, in which the Lakshadweep MP was booked for ‘colluding with a Colombo-based firm’

What is this case?

According to the CBI, some public servants of Lakshadweep Co-operative Marketing Federation (LCMF) in collusion with Faizal caused loss to LCMF by not following the requisite tender process and other formalities in the export of tuna fish to a Sri Lankan company, SRT General Merchants.

LCMF, which was established in 1966, is the apex society of all cooperative supply & marketing societies in Lakshadweep. According to the LCMF website, the federation also acts as the nodal agency of the Lakshadweep Administration in the marketing of agricultural products (copra) and fishery products (mass tuna).

It has alleged that the LCMF procured a huge quantity of tuna from local fishermen under the influence of Faizal. The procured fish was exported by LCMF to SRT General Merchants through another exporter, but did not receive any payments for the shipment.

The other accused named in the FIR include SRT General Merchants and LCMF MD M P Anwar.

How did the alleged irregularity come to light?

Last month, CBI received information about irregularities in the export of fish to Sri Lanka from Lakshadweep. The agency carried out a joint surprise check along with vigilance officials of the Union Territory at multiple departments of the Lakshadweep Administration, including LCMF, the Fisheries and Public Works Departments, the Khadi Board and Co-operative Society, and Animal Husbandry Department.

The CBI has claimed that a scrutiny of the documents recovered in the check showed that Faizal, the MP, was instrumental in precipitating the situation that caused losses to both LCMF and the fishermen.

So what was Faizal’s role, according to the CBI?

CBI has alleged that it was under Faizal’s influence that LCMF procured fish and sold to SRT, where his nephew Abdul Razik is an office bearer.

According to CBI, during the scrutiny of the documents recovered in the surprise checks, it was revealed that during the year 2016-17, “under the false assurance of Mr Mohd Faizal P P, MP, Lakshadweep” Sri Lankan company SRT General Merchants Importers & Exporters was willing to purchase massmeen (dry tuna) at a rate higher than the prevailing one, and that LCMF decided to procure massmeen from fishermen.

Subsequently, about 287 MT of massmeen was procured through co-operative societies of islands. During this process, LCMF assured the fishermen that they would be paid more than the prevailing rates, the CBI has claimed.

“The matter was proceeded by Mr MP Anwar, the then Managing Director, LCMF without floating any tender and merely relying on the assurance of Mohd Faizal P P, MP Lakshadweep,” the CBI FIR says.

“It was also revealed that Mr Mohd Abdul Razik Thangal, …relative of Mr Mohd Faizal P P …was representative of M/s SRT, Colombo, Sri Lanka in this matter. Mr Mohd Faizal P P …made all arrangements and he was instrumental in fixing the Massmeen exporter M/s Accelerated Freeze Drying Company (AFDC), Cochin, Kerala through LCMF Ltd,” the FIR says.

What happened thereafter?

Subsequently, LCMF entered into an agreement with M/s AFDC, the Cochin-based exporter agency, in which the terms of reference for the export of massmeen were agreed upon, the CBI has said.

However, the project did not progress because AFDC said it had not received Rs 60 lakh due to it for the first consignment of 10 MT that it had exported to the Sri Lankan company. “Due to the above …it did not continue the lifting of further Massmeen through LCMF, as per the agreement,” the CBI FIR has said.

According to CBI, the fish stuck with LCMF had to be eventually auctioned, and it fetched only Rs 5.72 crore against the promised amount of Rs 14.65 crore, leading to a loss of over Rs 9 crore.

What is Faizal’s defence?

The MP, when contacted on Tuesday, said: “The CBI sought some documents which have been provided. They even searched my home. But they have given a nil report on recovery. Let’s see what further action they take. We will see from there.”

Earlier, Faizal had denied any corruption in the matter. “The fish was sold to SRT as the buyers had offered a very good price. Fishermen earlier were not getting the right benefits as middlemen were making all the money,” he had said.

“I even made a speech in Parliament for purchase through cooperative marketing federation. The federation identified a buyer in Lanka and he offered very good rates. But the buyer backed out later due to some intervention by Thuthookudi middlemen. As a result, 250 MT fish was left with the federation to dispose of. Then there was a local auction and Thuthookudi middlemen bought it. There is no corruption in it. Let them enquire, the truth will come out,” he said.