State exchequer reels under 2 scams of Left Front govt

Two scams of the Left Front government — namely iron ore export to China and potato procurement — has come up as a serious concern for the present Mamata Banerjee government as it is bleeding the state's exchequer to a great extent.

Jyotipriyo Mallick, the state Food minister, said the Criminal Investigation Department (CID) has taken up the case and probing them.

"We have urged the investigating agency to complete the probe that had begun after the change of guard in the state in the next one year," he said adding that besides the probe another aspect is that the scams are going to drain out a huge amount of the state's exchequer as the previous government had failed to clear the loans that had been taken from consortium of as many as nine banks to export iron ore in China.

The West Bengal Essential Commodities Supply Corporation Limited (WBECSC), that usually promotes sales of foodgrains, had taken a loan of Rs 232.42 crore keeping the state government as guarantor.

At present the principal amount of the loan that has to be cleared within the next six months stands at Rs 156.95 crore. Mallick said that Bank of Maharastra had moved to the National Company Law Tribunal in this connection. The tribunal had sent a chartered accountant to the state a month ago and the bank account of the state food department through which the payment is made for paddy procurement was freezed. However, it was opened on the same day in the evening after it was told that the payment to farmers would come to a standstill.

"We have approached the state Finance department and the minister concerned — Amit Mitra — will hold discussions in this connection soon," Mallick said adding that they have made it clear to the consortium of banks that they would be clearing the due of the principal loan amount and it would not be possible to give the interest.

The total amount that WBECSC had spent to export the iron ore was around Rs 649 crore. The corporation had initially invested Rs 329.69 crore to procure the iron ore from 20 companies. Later the loan was taken as the companies had demanded more to supply the material. A total of 60 vessels containing iron ore were sent to China but only 17 had reached the country. Moreover, the iron ore of the 17 vessels were declared of poor standard so the material was auctioned there itself generating only around Rs 76 crore. A total of 46 officials including six IAS officers were involved in the iron ore scam.

In connection with the potato procurement scam of 2010, a loan of Rs 80 crore was taken from the state co-operative banks. The interest of the loan amount at present is Rs 19.49 crore. "The potatoes were procured in May 2010 and those were declared rotten in October 2010," said Mallick.