MSIL officials, advisor loot firm of Rs 12 crore

BANGALORE: A “gang” of a few individuals, including an official of IAS rank, have bled the state-owned Mysore Sales International Ltd (MSIL) — a marketing arm of the Karnataka Government — of Rs 12.36 crore after signing fraudulent contracts with private firms for iron ore exports.The Legislative Committee on Public Undertakings headed by M K Pattan Shetty, probing the murky dealings in MSIL, unearthed another flagrant attempt to defraud the company and recommended criminal prosecution of all officials allegedly behind “Operation Swindle”.According to documents available with the Express, MSIL was earning a moderate profit from its iron ore trading business where it procured raw iron from the state-owned Mysore Minerals Limited and sold it through the Central Government enterprise NMDC.However, things changed suddenly when the then managing director of the company chose to discard established practices and allegedly appointed an individual hand-picked by him as a “business advisor” to run the show.The company, while appointing this “rank outsider”, did not bother to cross-check his credentials and in violation of all rules and regulations, also delegated powers to him to deal with both domestic and overseas firms and companies.In a swift action, the “business advisor” made MSIL sign an agreement with a private domestic company, to procure 50,000 tons of iron ore to be supplied to a Hong Kong-based company and made an advance payment of `6 crore, throwing all norms to winds.When the company failed to deliver the ore, the business advisor made MSIL sign another deal with Saram Exports, a Goa-based company, to supply the ore.On the advise of the business advisor, MSIL also paid another advance amount of `6.65 crore to Saram Exports for procuring the ore.However, to the shock of MSIL, the Hong Kong company, which received the consignment, sent a notice to MSIL charging the state-owned company with violating the terms of the agreement by supplying low-grade iron-ore, which has no commercial value in the international market.After already losing over `12.65 crore in the deal, MSIL has also received notices from the overseas company seeking a penalty of `9.25 crore besides the value of the consignment for which the contract was signed.The state government, taking the matter seriously, has recommended a Lokayukta probe into the scam.