For a company that’s looking at a billion-dollar expansion, what’s half a million dollars? Perhaps that’s why Air-India has been sweeping a little scam under the carpet for almost a decade. Literally. Nine years ago, the airline paid $1.5 million to a US-based company to buy carpet for its aircraft. One-third of the consignment never came, the middleman got his commission, the US company went bankrupt, Air India’s losses were to the tune of $500,000. The airline sued the company in New York — lost the case. And now says it’s ‘‘looking into the matter.’’ The sequence of events, according to court documents and interviews of Air India officials: • In 1993, Air-India, through its broker Henry Seth — no one is willing to comment on how a PSU appointed a broker — ordered 49,500 sq m of airline carpet from Pennsylvania Woven Carpet Mills (PWCM) for $1.5 million. • The carpets were to be shipped to Mumbai in four consignments. Air-India received 2,500 sq m in 1993, two other consignments of 31,000 sq m a year later. • M L Thatte, then Air-India’s regional stores and purchase manager in New York, sent messages to then Director Stores and Purchase V K Verma — who is now at the centre of a controversy involving alleged forgery — calling for action to collect the remaining 16,000 sq m of carpets. • Meanwhile, broker Seth told PWCM in May 1995 to store the carpets in their warehouse as there was no space in Mumbai! • The same year, PWCM claimed to have shipped 9,000 sq m of carpet to Mumbai. Air-India says it hasn’t taken delivery. • As the wrangling went on, PWCM went bankrupt. • Air-India filed a lawsuit in the New York district court in February 1997 against PWCM. • During the hearings, PWCM told the court that it had dealt with Henry Seth who was paid a commission of 15 per cent for the entire deal that works out to $250,000. • As per Seth’s instructions, PWCM wired the money to a Swiss bank account in the name of Europa Imports and Exports Ltd. PWCM told the court that company had shipped 9,000 sq m of carpets to Mumbai and the rest of the carpets are being offered to Air-India. And that Air-India found the carpets below standard and rejected them. • The court absolved PWCM of the charges of having cheated Air-India. Back home, the CBI took over the probe in early 1998. Investigation was on till September 2001 when CBI formally prepared a chargesheet against Thatte and the president of PWCM. Thatte was dismissed by Air-India from service. Thatte says he was made the scapegoat. ‘‘The inquiry was bogus and did not take into account all facts. Like my repeated messages to Air-India in Mumbai asking them why we were not taking delivery of carpets even after having paid the money. The inquiry did not probe the middleman who instructed PWCM to ship 9,000 sq m to Mumbai which Air-India never received. Who appointed Henry Seth as middle man when no PSU can appoint middleman, was never probed? Henry’s relationship with Air-India officals was not investigated.’’ Air-India’s vigilance cell started its own inquiry after the CBI filed the chargesheets. ‘‘We came across many new facts which the CBI had not probed,’’ says a vigilance officer. ‘‘We have sent the report to the Managing Director calling for more investigations.’’ When contacted, Air-India’s chief spokesperson Jitender Bhargava said: ‘‘The CBI looked into the case and as far as the current information goes the matter is being relooked into on the advice of the Central Vigilance Commission. There is nothing more I can add.’’
