HUDCO had sanctioned R14,500 crore as loans to different infrastructure corporations during the NDA regime.
Three part-time HUDCO directors had allegedly sanctioned loans amounting to Rs5,300 crore to corporate houses in a day in the absence of a single permanent director
CVC found that bribe was paid get the loans sanctioned
The CBI was asked to investigate which did not find adequate evidence to proceed against the accused.
Admitting to financial irregularities in the Housing and Urban Development Corporation (HUDCO) during the NDA regime, the Ministry of Housing and Urban Poverty Alleviation has informed the Supreme Court that it has asked the Corporation's CMD to identify the officials involved in the Rs.14,500 crore scam for taking necessary action against them.
While accepting all the recommendations of the Central Vigilance Committee (CVC), the ministry has also sought a CBI probe in two cases. While in the first case HUDCO had disbursed loans to a private firm, in the other it had invested money in four different bonds. However, with regard to the role of former Union minister, Ananth Kumar, the ministry has urged the Supreme Court to pass an appropriate order.
The Action Taken Report (ATR), submitted by the ministry, has been prepared by its Under Secretary S Mukherjee. The report states: "As regards to action in the case of the then minister Ananth Kumar, appropriate directions of the hounourable Supreme Court are solicited."
With regard to the CVC's recommendations to improve corporate governance, the ministry has asked the Department of Public Enterprise to issue instructions that will be applicable to all the PSUs. Also, HUDCO CMD has been asked to prepare a proposal to promote professionalism in the corporation. To unearth more irregularities, if any, the ministry has also decided to request the Comptroller and Auditor General to conduct a special audit regarding utilisation of fund borrowed by HUDCO from PSU banks.
While accepting all the recommendations of the Central Vigilance Committee (CVC), the ministry has also sought a CBI probe in two cases. While in the first case HUDCO had disbursed loans to a private firm, in the other it had invested money in four different bonds. However, with regard to the role of former Union minister, Ananth Kumar, the ministry has urged the Supreme Court to pass an appropriate order.
The Action Taken Report (ATR), submitted by the ministry, has been prepared by its Under Secretary S Mukherjee. The report states: "As regards to action in the case of the then minister Ananth Kumar, appropriate directions of the hounourable Supreme Court are solicited."
With regard to the CVC's recommendations to improve corporate governance, the ministry has asked the Department of Public Enterprise to issue instructions that will be applicable to all the PSUs. Also, HUDCO CMD has been asked to prepare a proposal to promote professionalism in the corporation. To unearth more irregularities, if any, the ministry has also decided to request the Comptroller and Auditor General to conduct a special audit regarding utilisation of fund borrowed by HUDCO from PSU banks.
The Supreme Court on 29/08/2005 ordered a probe by the Central Vigilance Commission (CVC) on the alleged sanctioning of over Rs. 14,500 crore loans by the Housing and Urban Development Corporation during the tenure of Anantha Kumar as Urban Development Minister in the previous National Democratic Alliance regime.
A Bench comprising Justice S.N. Variava and Justice H.K. Sema while directing the CVC to complete the probe in four months also asked the CVC to inquire into the specific allegation of misuse of funds of the HUDCO by Mr. Kumar.
Passing interim directions on a petition filed by the Centre for Public Interest Litigation, the Bench directed the HUDCO Managing Director to supply to the CVC all documents and materials pertaining to the matter. The Bench directed the authorities concerned to appoint a Chief Vigilance Officer in HUDCO within six weeks since the proposal was pending consideration before the Department of Personnel and Training.
Counsel for the petitioner, Prashant Bhushan, alleged mala fide and arbitrary use of power in the sanction of loans. He said that the CVC had probed some cases and found irregularities in them. He pointed out that three part-time Directors of HUDCO sanctioned loans amounting to Rs. 5,000 crores to 50 corporate houses in a day in the absence of a single permanent Director.
The petitioner submitted that it wanted to bring to the notice of the court the mala fide and arbitrary use of power and sanctioning of loans by HUDCO to the tune of Rs. 14,500 crores and release of Rs. 8,500 crores subscription in privately placed debentures of Rs. 1,250 crores and writing off of Rs. 550 crores in 2002-2003 resulting in grave loss to the exchequer and further accumulation of non-performing assets in the country which had already crossed Rs. 1,00,000 crores.
CPIL had alleged that the then Urban Development Minister misused the funds for paying his mobile bills and other private affairs. The actions of Mr. Anantha Kumar and Mr. Biswas, former Chairman and Managing Director of HUDCO, had caused huge loss to the public exchequer.
The petitioner pointed out that since there was reckless lending without following appraisal norms, the National Housing Board and various other high-level officers of the Central government had issued warning to the HUDCO from time to time. Despite these warnings, HUDCO continued to sanction loans by ignoring all the advice.
It said that Mr. Anantha Kumar and others had blatantly violated the code of ethics for public sector undertakings and entered into a conspiracy to divert public funds for extraneous considerations.
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