Curiouser and Curiouser

Outlook has gained access to the report submitted by the Rajya Sabha Committee on Government Assurances, chaired by Janata Dal MP S.Jaipal Reddy, which forms the basis of the Company Law Board moving against MUL Managing Director R.C. Bhargav

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Updated on: 6 February 2022 10:43 am

Curiouser and Curiouser

Three unstarred questions regarding corruption charges against Bhargava were raised inthe Rajya Sabha between May 1992 and August 1993. The Industries Ministry assured detailedreplies but kept asking for more time till in June 1994 the Assurances Committee decidedthat "the Ministry was trying to evade the issue" and summoned the secretary,heavy industry and the CBI director. It found that the CBI after realising that there wasa prima facie case in two allegations— irregular award of contracts fortransportation of components from Kandla port to the MUL plant at Gurgaon, and forair-conditioners— had asked the Government for permission to investigate. But nopermission had come for 18 months. The Committee asked the secretary to furnish papersrelated to all the allegations against Bhargava.

The Committee found that Bhargava had been cleared by the vigilance section of theDepartment of Heavy Industry before he took over as chairman and managing director in1990. But wasn’t permission necessary from the central vigilance commissioner, as pera 1988 circular from the Ministry of Personnel, asked the Committee. Curious Fact No. 1:the circular apparently did not reach the Department till 1993! The allegation about thetransportation contract had, in fact, been looked into by the Industries Ministry in 1988and the case closed. Curious Fact No. 2: when the Committee asked for the relevant papers,it discovered that no records were available. What follows is the testimony of AshokChandra, then secretary, heavy industry.

Chairman :? What was the issue which was closed by the thenminister of industries?

Chandra : I would not know because they have mentioned‘flags’ which are not there .

Later, Chandra says that he had "no clue today as to which issue has been referredto in this particular note. But what it says is that things are closed, which means thatif there was something going on, that was closed, and then the vigilance clearance wasgiven". Curious Fact No. 3: the Committee also found "an unresolved mysteryrelating to the closure of another case in 1990, whose files, page numbers and issues havebeen missing for years, and are even now, admittedly untraceable". The report notesthat: "It is a matter of large significance that untraceable papers and a‘missing’ circular...played their own part in promoting? the career of MrBhargava .

" MUL’s ceasing to be a public sector undertaking in 1992 meant that the CBIno longer needed the Government’s concurrence to investigate Bhargava. Curious FactNo. 4: when the CBI repeatedly pointed this out, it was advised by the Government to wait.However, the CBI filed chargesheets against Bhargava regarding two allegations that hadnot been referred to the Government earlier for permission to probe . These two related toa shock absorber contract, and allotting 13 vehicles to some customers at pre-budgetprices. Curious Fact No. 5: the Industries Ministry refused to part with papers related tothe allegations against Bhargava "in the interest of the State". But allegationsagainst Bhargava could hardly be sensitive information related to national security.

Finally, on August 25, 1995, exasperated Committee members put their signatures on thereport that concludes thus: "...the Government should take immediate steps to relieveMr Bhargava of his office by moving against him under Company Law, and by telling Suzukiin loud and clear language that the Government will not put up with its planted andtainted nominee. " Curious Fact No. 6: the Government seems to be following thatrecommendation.