Three years into contract with Nanda firm, Govt says it was not aware of Nanda link

Although company president Vivek Agarwal claims Nanda isn’t associated with the company any more, the firm’s annual returns submitted to the Ministry of Corporate Affairs in 2006 show that Nanda and son Sanjeev remained directors of the company from its inception in 2000 till September 2006, a month before the CBI raided the firm.

Details of C-1’s shareholding filed with the Ministry show he remains a shareholder, along with son Sanjeev and brother Paul Nanda. The majority holding (1 crore shares) is with Y2K Systems International located in Port Louis, Mauritius. The company has not filed returns for 2006-07.

There is also evidence to show how DGS&D bent over backwards to promote C-1:

• Since May 2007, by when C-1 had come under the scanner of both the CBI and IT— it was raided in October 2006 — the company has had “authorization” from DGS&D to act as the service provider for e-tendering in all Government organizations. This decision has been challenged in the Delhi High Court and is now being examined by the Central Vigilance Commission.

• Investigations have found that after the original 2004 contract signed between DGS&D and C 1 — the company was selected after a limited tender — the former issued an amended clause on May 22, 2007 titled “key services to be offered by the service provider (C 1) to Government organizations willing to avail DGS&D e-procurement platform.” A definition was added in the circular describing “Government Organisations” as: all Central and State Government Departments, PSUs, Autonomous bodies, local bodies and Co-operatives.

• With the Ministry of Finance having made e-tendering mandatory for all Government Departments from July 1, 2007, C 1 was named repeatedly as the sole service provider in the DGS&D circular.

• But in a departure from earlier contracts C-1 signed with clients, following the DGS&D circular, it was DGS&D which signed five-year MoUs with Government Departments which were then routed to C1 for e-tendering requirements.

• While DGS&D earns Rs 25,000 as development fee per department, C1 gets Rs 6,000 annually from each vendor/supplier. The number of suppliers run into thousands each department.

• The DGS&D has told The Indian Express that Government Departments were under “no compulsion” to use its e-tendering platform and it was only an “option” given to them. On its website, however, the DGS&D has posted an “important notice” informing vendors suppliers and Government Departments about mandatory e-tendering. And adding: “For e-tendering the vendors are advised to contact M/s C 1 India.”

• That’s why despite Nanda being involved in defence scandals, C-1 signed up with the Ordnance Factory Board, the Nuclear Power Corporation and the Indian Navy. Others who have signed up and are on the company’s e-tendering net are Delhi, Punjab and Chandigarh Governments, the Damodar Valley Corporation, the Central Electricity Authority, Balmer Lawrie and BSNL (Kolkata).