Rs 3,600 cr, the size of NAFED scam

Congress General Secretary, Ambika Soni, has called for an investigation into the NAFED expose by CNN-IBN Special Investigation Team.

Soni says that there should be complete transparency in government workings.
On Monday, CNN-IBN Special Investigation Team exposed how NAFED diverted Rs 3,600 crore of taxpayers' money to import petroleum products and minerals.

The National Agricultural Cooperative Marketing Federation of India Ltd (NAFED) was set up by the Government of India on October 2, 1958, to promote co-operative marketing of agricultural produce for the benefit of Indian farmers.

A major part of the funds, meant for the advantage of poor Indian farmers, have been diverted to private firms

Moreover, a large part of this money in turn has been borrowed by NAFED from banks, which one of the confidential document shows, it is yet to repay.

The Union Bank Of India gave NAFED Rs 300 crore, Vijaya Bank Rs 150 Crore while UCO Bank, IndusInd and Bank of Maharashtra each loaned the organisation Rs 140 crore. Several other prominent banks also loaned huge sums of money.
The Banks that sanctioned loans to NAFED
Bank
Money Loaned
Union Bank Of India
Rs 300.73 crore
Vijaya Bank
Rs 149.68 crore
United Commercial Bank
Rs 138.47 crore
IndsInd Bank
Rs 137.40 crore
Bank Of Maharastra
Rs 137.40 crore
Allahabad Bank
Rs 92.96 crore
HDFC Bank
Rs 78.12 crore
ICICI Bank
Rs 36.10 crore
State Bank Of Indore
Rs 49.49 crore
Punjab National Bank
Rs 99.03 crore
State Bank Of Patiala
Rs 49.87 crore

Exhibit One: A Memorandum of Understanding signed between Rital Impex and the additional managing director of NAFED, Homi Rajvansh. Rital Impex secured a loan of Rs 75 crore from NAFED in 2004. Rs 52 crore are still outstanding.

The investigation also revealed the deep-rooted corruption in the Government-owned cooperative.

In Lok Sabha the question on the diversion Rs of 3,600 crore was raised in July 2004.
Agriculture Minister of State Kanti Lal Bhuria had categorically denied any such corruption within the NAFED then.

But CNN-IBN's evidence proves that Kanti Lal Bhuria was not correct.

This Memorandum Of Understanding between NAFED and Earthtech enterprises is specifically about the import of petroleum products.

When CNN-IBN tried to find out why NAFED gave loans to private companies, the trail led straight to the offices of Whitewood Pvt Ltd in South Delhi.

Whitewood Pvt Ltd is owned by Manish Aggarwal, son of O P Aggarwal. Incidentally O P Aggarwal owns Earthtech, the company that secured loans from NAFED to import petroleum products.

His employees argued that they work for M K International and not for Whitewood or Earthtech. After that they attacked the CNN-IBN team.

But our team finally persuaded Manish to give his version.

CNN-IBN: You own Whitewood Pvt Ltd?

Manish Aggarwal: Absolutely.

CNN-IBN: People are saying Whitewood is owned by your father O P Aggarwal.

Manish Aggarwal: No it's my company. Nothing has been issued to me from anywhere.

CNN-IBN: There are stories that your father has been involved in some of the issues of NAFED
and his companies have been blacklisted. Are you in any way linked in any financial issues with your father?

Manish Aggarwal: Well, he is my father and I am his son. But as far as business and finances go, we are not related at all.

However, this photocopy of a bounced cheque worth Rs 82 lakhs is a giveaway. Despite disowning his father this signature shows that Manish is an authorized signatory of Earthtech.
Moreover, CNN-IBN Special Investigation Team discovered that the Additional Managing Director of NAFED, Homi Rajvansh, who has signed several dubious deals with private firms, drives a sleek Ford Endeavour (DL 3C AJ 3567), which is registered in the name of Whitewood Private Limited.

Rs 3,600 crore — this huge sum of the taxpayers’ money is the size of corruption within NAFED.