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Former Goa CM linked to bonds scam

Sandesh Prabhudesai in Panaji

Former Goa Chief Minister Francisco Sardinha now finds his name linked to a bonds scandal. This comes close on the heels of the arrest of three former Goa ministers in various scams.

Goa Chief Minister Manohar Parrikar says that the enquiry commission, set up by the BJP government, has mentioned his predecessor's name in relation to the alleged bonds mismanagement. "I will proceed strictly according to legal advice in this regard," he states, cautiously.

The one-man enquiry commission, headed by retired IAS officer Arvind Bhatikar, presented its report to the Goa government. It has asked the government to consult legal experts to decide whether Sardinha's actions amount to malpractice.

Sardinha himself denies all corruption charges and says that this is an attempt to tarnish his image. "I am prepared to face any action if charges are proved," he states.

The 28-page report states that Sardinha issued orders to engage a private firm to raise bonds of Rs 1 billion 'in contravention of the existing regulations', thus raising doubts of mismanagement.

The commission says that Triveni Management Consultancy Service Ltd was assigned the job of raising bonds for private placement at a higher rate of commission, while ICICI had been engaged for a similar job a month before that at a much lower rate.

On August 8 last year, Sardinha approved the finance secretary's proposal to renew the agreement with ICICI till August 2002 to raise funds for the state from time to time. The commission agreed upon was 0.09 per cent, at an interest rates of 11.85 to 12.25 per cent.

However, on August 11, Sardinha sent Triveni's proposal to the finance secretary, proposing to raise funds at 12 per cent interest and a commission of 3 per cent.

It was brought to his notice that ICICI's rate was much lower, but Sardinha ordered on September 11 that Triveni be engaged at the commission of 2.9 per cent.

Sardinha does not deny this, but claims that it is not the whole truth.

"The inquiry officer has not taken into account the revised ICICI offer of August 25, quoting 13.25 per cent interest," he asserts.

As per the report, Sardinha's deal could have incurred a loss of Rs 26.8 million to the public exchequer for raising Rs 1-billion bonds. But since Triveni could not raise more than Rs 570.3 million, the commission amounted to only Rs 15.2 million.

Finally, only Rs 11.3 million was paid to Triveni as the Parrikar government, which came to power subsequently, pared the commission rate to 2.2 per cent.

"I saved Rs 3.9 million by lowering the commission," claims Parrikar.

Sardinha claims that the final calculations show that Triveni rates were 1.25 per cent lower than ICICI's new rates. He, however, does not explain why there were no negotiations with ICICI.

Countering the panel's finding that Triveni's letter was directly processed from the chief minister's office unlike other agencies who went through the finance department, the former chief minister says he would continue the practice even in the future, seeking the concerned department's comments later.

The panel observes that even the finance department had failed to follow the proper tendering procedure, and holds departmental officials responsible for the lapses.

The report, however, does not propose any action against any official.

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