KOCHI: The Central Bureau of Investigation (CBI) has registered a case against former managing director of Hindustan Newsprint Limited (HNL), Velloor, R Gopala Rao for criminal misconduct causing the closure of the company in 2019.
Rao was the MD of the company between 2016 and 2019 when the PSU shut its operation due to heavy losses.Last year, the ministry of heavy industrial and public enterprises (HIPE) had suspended Rao after Central Vigilance Commission launched the probe. The CBI registered the case following a complaint by HIPE vigilance joint director.
As per the FIR filed by the central probe agency, Rao caused the closure of HNL due to his ‘reckless, erratic, unilateral and arbitrary decisions, thereby committing criminal misconduct.’ “The transactions altogether caused direct financial loss to HNL to the tune of approximately Rs 4.5 crore in the form of unplanned and gross negligent sourcing of raw materials and finally resulted in the closure of HNL,” the FIR stated.
According to CBI, Rao was behind the installation of the WET lapping machine that was not properly designed and assembled to meet the desired criterion resulting in a loss of Rs 65 lakh. It was during his tenure that 3636.96 tonnes of low-grade coal from Singareni Collieries Co Ltd (SCCL) was procured, even though HNL was not using low-grade coal.
Similarly, 8,000 MT coal was purchased from A&A International Trading Pvt Ltd for Rs 4.46 crore without tender process violating the provisions of its purchase manual.It is alleged that Rao purchased 1,1163.5 tonnes of pulpwood from Andhra Pradesh Forest Development Corporation at Rs 7,635 per MT which was much higher than the local rate.
The FIR says he was instrumental in the company selling 246.498 MT of bleached hardwood chemical pulp to Tamilnadu Newsprint Pvt Ltd, which caused Rs 23 lakh to the company. As per the FIR, Rao allegedly utilised the provident fund (PF) statutory deduction amount for some purpose which was not reflected in the annual account of HNL for the financial year 2018-19. This caused Employees’ Provident Fund Organisation (EPFO) an outstanding liability of Rs 14.89 crore.
The case was registered under sections 13(2) for criminal misconduct, 13(1)(c) misappropriation and 13(1)(d) public servant commit offence of criminal misconduct of Prevention of Corruption Act and section 420 (for cheating) under IPC. The case, registered on December 29, was probed by an ASP-ranked officer of CBI Anti-Corruption Bureau (ACB), Kochi.