3 min readNew DelhiAug 26, 2009 09:27 AM IST
First published on: Aug 26, 2009 at 09:27 AM IST
Little-known state-run mini ratna Mineral Sales Trading Corporation MSTC has bungled on payments of about Rs 600 crore to domestic players after having exported gold procured from them to Dubai in 2008-09. This has prompted the government to order a Central Bureau of Investigation probe CBI. Headquartered in Kolkata,MSTCs business volume stood at Rs 11,878 crore in 2007-08.
The government has ordered a CBI probe after it came to light that MSTC defaulted after having exported gold worth Rs 600 crore to Dubai in 2008-09, steel secretary Pramod Kumar Rastogi told The Indian Express. Besides,the ministry has also asked the Comptroller and Auditor General CAG to conduct a special audit.
According to official sources,the buyers in Dubai were extended a credit period of 180 days but they defaulted. They said it was difficult to spell out the details of quantity and price since various buyers sought different grades of gold. The sources said the ministry was not informed about these decisions by the MSTC board then. MSTC is required to seek the ministrys approval if its investment proposals are over Rs 300 crore, a source said.
Meanwhile,claims from domestic traders who had sold the gold to MSTC were mounting. Rastogi said the ministry was making various efforts to recover the money. The sources said the ministry was finalising a list of officers to be sent to the Gulf Emirate to initiate recovery. Rastogi,however,refused to confirm this.
The defaults happened during the tenure of previous chairman and managing director Malay Sengupta. Neither Sengupta nor the new CMD S K Tripathi could be contacted.
The officials claimed that the ministry was unaware of the events which began in early 2008 and continued till recently.
We only came to know about it recently after the new management sounded the alarm bells, said one official. The company,which posted gross income of Rs 5,197 crore in 2007-08,has reserves of Rs 268 crore.
The exports executed by MSTC had the Export Credit Guarantee Corporation ECGC cover. ECGC insures credit risk covering exports against loss of goods and services during shipment. However,if it turns out to be a fraud,ECGC would not pay any damages, another official said.
The sources said there were some other issues too under the previous management. For instance,the ministry had earlier pulled it up for purchasing coal at high prices and even issued a show-cause notice to Sengupta. Of Rs 2,000 crore in this case,the company could recover only Rs 1,200 crore.
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