Lucknow: The loss from the scam in Uttar Pradesh state sugar corporation limited during the Mayawati rule has come out to be more than Rs.1179.84 crore. In the CAG investigation of 21 sugar mills which were sold at very cheap rates it has come to notice that liquor businessman Ponty Chadha was benefited by Mayawati.
It is now time for Chief Minister Akhilesh Yadav to take action against Chadha who is also a favourite of his father Mulayam Singh Yadav.
What the report says:
The CAG report says that the bidding process was forged. Mayawati and her main man Naseemuddin Siddiqui had already told responsible officials who the sugar mills will be sold even before the bidding started. Chadha's company knew of the financial bidding beforehand but again changes were made in the middle of the bidding.
In order to benefit Ponty, the price of land, machinery and plant of the mills was reduced on Maya's orders. Not only this, the stamp duty for the registry of the mills too was discounted. The CAG reports says that those who valued the sugar mills did it in such a manner which benefited Chadha but made the government lose Rs.840.34 crore.
Such was the anomaly in the bidding process that only Wave Enterprises and Punjab Foods were the bidders for the sugar mills in Saharanpur and Bulandshahar. Here the state suffered a loss of 49%. At the same time, government undertaking Indian Potash made a bid much above the expected price for 6 mills but got nothing.
During Maya’s tenure 10 and 11 sugar mills were sold in July-October 2010 and January-March 2011 respectively. Indian Potash got a few mills from the first 10 but Chadha got all the remaining. In the first phase, the two companies which bid Chadha's while in the second phase the directors of all the bidding companies were linked to each other.
BSP or SP, all same to Ponty:
Ponty Chadha came in discussion during Maya regime but it was Mulayam Singh Yadav who brought him into focus in Ghaziabad and Noida. Mayawati took the favours to a higher degree and gifted him the state’s excised duty department apart from the sugar mills.
Even the current CM is not far behind in favouring Chadha. During his election campaign, he made the rising prices of liquor an issue but forgot it after he won the elections.
Mayawati had defended herself by claiming that a cabinet decision was out of CAG investigation. The CAG had in response stated that it had the required rights under a notification dated April 25, 2003.
The mills sold were Bareilly, Bhatni, Chetani, Deoria, Amroha, Bijnor, Bulandshahr, Chandpur, Jarwalroad, Radda, Rohankalan, Saharanpur, Sakoti Tanda, Siswa Bazar, Betalpur, Barabanki, Guglish Lakshmiganj, Ramkola, Shahganj and Hardoi.
During valuation the assets of the mills came to Rs.1645.87 crores. The registration fee was found to be Rs.104.43 crores. However, on the Rs.440.75 crore of Chadha's companies, only Rs.27.35 crore of the duty was paid.
In this manner Ponty's companies paid a registration fee of only Rs.79.57 crore which is very small. The department had to suffer a loss of Rs.100.47 crore on stamp duty alone. The CAG has in its report asked the department to appeal for refund of its losses.
Scam step by step:
Chadha got a total profit of Rs.841.54 crores,
Around 90% reduction in prices of sugar mill land,
Discount via cash flow method comes to Rs.243.48 crore,
Scrap value of P&M comes to Rs.82.08 crore,
Old and new mill land was sold at same price at Rs.223.72 crore,
Rs.21.15 crore added to expected value,
Lack of competition in bidders caused a loss of Rs.124.70 crore,
Chadha gains Rs.53.71 crore on less stamp duty,
Rs.1.25 crore profit to advisor,
The land price of UPRCGVNL mills were lowered by Rs.128.41 crore to benefit Chadha,
Rs.10.16 crore discount on stamp duty and registration which should not have been made,
Rs.19.29 crore unnecessary discount on big lands,
Chadha made a profit of Rs.43.20 crore on machinery,
Rs.8.20 crore benefit given to Chadha on expected price,
Lack of competition in bidding process benefited Chadha by Rs.81.98 crore,
Undervaluation of stamp duty benefited Chadha by Rs.47.06 crore,
Chadha got a benefit of Rs.338.30 crore from UPRCGVNL mills and the state lost just the same amount.
We have already told you that Naseemuddin Siddiqui and Ponty Chadha are partners. This means that Naseemuddin is also involved in the sugar mill scam. We will continue updating you with more.
Under such a situation Akhilesh Yadav should take action against the tainted liquor baron and other's involved in the scam. Only that will help SP maintain its credibility.