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This is an archive article published on August 9, 1998

Patnaik orders probe into licence sale

NEW DELHI, Aug 8: A cold war is brewing in the Union Steel Ministry, between the Minister and his deputy. Both admit there have been irre...

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NEW DELHI, Aug 8: A cold war is brewing in the Union Steel Ministry, between the Minister and his deputy. Both admit there have been irregularities in the sale of Rs 1,000-crore worth licences to import steel scrap but they differ on how to go about sorting the mess.

Ramesh Bais (BJP), Minister of State for Steel, claims that information in this “serious” matter is being withheld from him. And Union Minister for Steel Naveen Patnaik (BJD), who has ordered three probes, the last one on August 4, has issued orders that no information be made available to “outsiders.” The controversy: Over the last three years, under the Value Based Licence Scheme (VABAL), three public sector undertakings, Steel Authority of India (SAIL), Metal Scrap Trading Company (MSTC) and Rashtriya Ispat Nigam Limited (RINL), sold import licences for steel scrap to a Calcutta-based private company, Baron Impex Ltd, allegedly at “throwaway” prices.

Rival companies have moved the Calcutta and Delhi High Courts accusing these PSUs ofviolating VABAL norms. Patnaik told The Indian Express that a formal inquiry, headed by a retired IAS officer B L Das was ordered on August 4. SAIL chairman Arvind Pande said he would not like to comment as the probe was on.

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One day earlier, Bais sent a memo to Patnaik criticising the “slackness and indifference” of Steel Ministry officials. He has also demanded that a show-cause notice be issued against S P Dutta, the chief general manager of MSTC, since he “deprived” the minister of information. Bais has also claimed that delivery of the licences to Baron should be stopped until the inquiry is over. When The Indian Express contacted Baron’s owner Shankar Bagri in Calcutta, he declined to comment.

Khandelwal says that he has records from the Director General of Foreign Trade and Customs officials which expose the “fraud.” He has threatened to pursue “legislative remedies” if the Ministry does not take immediate action.

When Bais wrote to Steel Secretary Ashok Basu, he was told Patnaik had givenwritten instructions that “no information be made available to outsiders.”

Is a Minister of State an outsider? Asking this, Bais fired off one more note to Basu. Even as Bais protests, the inquiry is on and so is the delivery of the licences to Baron Impex.

What’s under probe

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  • Without floating tenders SAIL allegedly routed its licenses to MSTC after lowering the price more than four times.
  • MSTC allegedly favoured Baron Impex, a Calcutta firm, by selling more than 90% of these licences to it.
  • Claiming it was cash-starved, RINL “relaxed” tender terms for Baron Impex.
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