Nafed faces corruption charges

Alleging rampant corruption involving about Rs 3,600 crore in the National Agricultural Cooperative Marketing Federation of India (Nafed), a petitioner today submitted an additional affidavit in the Delhi High court, saying the management of the public sector organisation had connived to misappropriate funds meant for its development.

In an affidavit filed in the court, counsel Sugriv Dubey for petitioner and social activist Vikas Jain said Nafed had got back Rs 1,143 crore between 2003 and 2005 as principal amount and not a single rupee was shown as interest.

The management had also reduced the interest rate from 13 per cent to 9 per cent on a loan of Rs 30 crore given to a company called DS Constructions, the petitioner alleged.

Nafed had also given a loan of Rs 150 crore to Uppal Housing Pvt Ltd and taken one per cent as service charge instead of two per cent, it stated.

Besides, it had also given Rs 19.80 crore to Delhi-based Omni Point Corporation for purchasing sugar, wheat, bajra, gram and castor seeds.

Despite having a multi-storied office building in south Delhi, the organisation had taken on rent an office-cum-residence for its managing director, paying Rs 82,000 a month, it alleged.

According to the affidavit, Nafed had also engaged some retired people and consultants in violation of its service norms.

The court on November 9 had issued notices to Nafed and the Centre after the petition had alleged that the agricultural marketing agency had illegally disbursed loans and stood guarantee for over Rs 3,500 crore in favour of some "blacklisted" individuals and firms.

A Division Bench comprising Justice Vijender Jain and Rekha Sharma had issued the notices, seeking direction for a CBI inquiry into the matter and asked Nafed to file its replies on February 1.

The petitioner alleged that Nafed, without verifying antecedents, stood guarantee for banks and firms that had been "blacklisted" by nationalised banks for misusing credit facilities and also took loans from various financial

These loans, totaling Rs 3,600 crore, were give to the blacklisted entities by Nafed, the petition alleged.

"Though a relevant Act empowered Nafed to obtain loans only up to 10 times over and above its working capital, it had procured loans over 15 times of the permissible limit for vested interests," the petition alleged.

Jain also contended that though Nafed's sole object was to promote the interest of poor farmers by way of market intervention programmes, the organisation had been indulging in "several illegal activities in blatant violation of the bye-laws".

The petition, while questioning the authority of the Nafed management to sponsor the telecast of a film festival on Sony TV, had said the organisation had also purchased 100 paintings by paying Rs 100 crore without authority, which was a deviation from its bye-laws.