Almost 18 months ago, additional secretary (finance), had recommended a high-level investigation by ‘an appropriate agency’ into the unholy nexus between officials of the Kerala State Industrial Development Corporation (KSIDC) and owners of Miraflores estate, Nelliampathy, which resulted in a loss of Rs 75.67 crore to the KSIDC. The recommendation was based on the findings of the finance inspection wing which probed the financial irregularities at the KSIDC office in Ernakulam.
The additional secretary, in his report submitted to the state govt in March 2011, had pointed out that the collateral security pledged by the owners of Miraflores estate in KSIDC to avail of Rs 5.89 crore loan as promoters of seven companies under Trend Group of Companies during 1990-96 was not enough to cover the loss.
“The promoters registered two private limited companies - New World Investments (P) Limited and Malabar Dairy Farms (P) Limited - during 1994 and purchased 486.63 acres of land (Miraflores estate) in Palakkad district. The registration of the property by the sub-registrar, Nenmara, without reckoning that the land is unsurveyed forest land is irregular and unlawful. Tahsildar (RR), Chittur, had attached 486.63 acres of landed property of the promoter at Nelliampathy, Palakkad, on the requisition of KSIDC. This forest land cannot be acquired to recover the loss because the transfer of leasehold forest land inclusive of ecologically fragile land is violation of Forest Conservation Act 1980,” said the report of the additional secretary, a copy of which is with Express.
The report concluded that the Board of Directors, KSIDC, without reckoning the default in repayment of existing loan, sanctioned fresh loans to the new companies floated by the same promoters. “Illegal nexus between KSIDC officials and promoters of Trend Group of Companies led to a loss of Rs 75.67 crore to the corporation. A detailed inquiry by an appropriate agency may be conducted to unearth these unholy dealings,” recommended the report.
The additional secretary had also recommended disciplinary action against the KSIDC officials. “The KSIDC officials failed in safeguarding the interests of the corporation. During 1995, three firms incorporated by the same promoter drew Rs 249.75 lakh irrespective of consistent default in repayment,’’ the report said.