KOCHI: The Fertilisers and Chemicals Travancore (FACT) is in a spot of bother with a shortage in fertiliser stock, valued at Rs 2.185 crore, being detected in a depot. While the Udyogamandal-based public sector company said an investigation is in progress, sources told TNIE that the irregularities are much bigger in nature with only the surface scratched.
The PSU’s financial statement said, “During the quarter ended September 30, 2021, the company detected certain shortages in fertiliser stock in a depot.” FACT has estimated the provision against irregularities in stock, pending investigation in progress, at Rs 218.50 lakh (Rs 2.185 crore).
Going by the price of phosphate, the missing shortage of fertiliser would be about 800 tonnes. Sources said the irregularities pertain to a warehouse in Chikmagalur, and some other godowns in Karnataka, triggering an alert on the modus operandi of the scam.
Some key officials within FACT were leaking sensitive information on price hikes on fertilisers such as phosphate (sold under its popular brand name Factamfos), ammonium sulphate and MOP (muriate of potash) to select dealers, said a source. While the Chikmagalur case has come under the scanner, it was found that these ‘operations’ were carried out during the past five occasions when the company hiked the prices of fertilisers.
For instance, FACT saw an unusually sharp spike in the sale of fertilisers to its dealers two or three days before the hike in prices came into effect. “Some company officials and dealers are hand in glove in the entire operation. They would show on the company books that they have made big sales in the two-three days preceding the hike. This way, the officials and dealers would make a profit from the difference in the prices,” said a source.
In the last fiscal, FACT hiked the prices of fertilisers five times. The price of phosphate was increased from Rs 18,571/tonne in February 2021 to Rs 21,428/tonne on March 1, 2021. It was noticed that 27% of phosphate sales during the month was reported in the three days (February 26, 27 and 28) preceding the price hike.
“Strangely, February 27 happened to be a Saturday, a half-day, and February 28 a Sunday, a non-working day, which exposed the game,” said the source, who wished to remain anonymous. After five hikes, the price of phosphate, which has the highest demand in the market, now stands at Rs 28,380/tonne. The hike for every 50kg sack of phosphate was Rs 975 to Rs 1,125.
A similar hike was implemented by FACT in October, to Rs 1,325/50 kg, and again this year, to Rs 1,390/50kg sack. “In the March 2021 hike alone, as per our calculation, FACT lost around Rs 9 crore. After the hike this March, the company has lost around Rs 6 crore,” said the source. Sources said there could have been similar transactions on the books of the company before the increase in prices of ammonium sulphate and MOP too.
When queried on the matter, the FACT spokesperson said: “We have taken steps to recover the amount from the contractors and dealers.” The official, however, said the amount missing was Rs 2.18 crore and “nothing more than that”.