SAIL PROJECT SCAM : Genesis and how it spread like cancer in the body of SAIL
An invention of CMO that gave thousand cuts to SAIL
Sale of TMT Bars to Traders / Dealers using the policy guidelines and discount structure applicable for Projects and Construction Companies began as an entrepreneurial venture of Vinod Singhal and Mahesh Chand Agarwal at Ghaziabad branch of CMO-SAIL when Singhal was Branch Manager (Long Products) / Ghaziabad and and Agarwal was Regional Manager of Northern Region.
Two dealers of TMT viz M L Steels and Chander Bhan Yogesh Kumar were roped in the entrepreneurial venture and they were asked to bring new firms from their family which can be camouflaged as Projects. Both M L Steels and Chander Bhan Yogesh Kumar were dealers of TMT Bars and were getting them at the Marketing Tool Price.
M L Steels brought AADYA BUILDWELL PVT LTD and Chander Bhan Yogesh Kumar brought POWERMECH INDUSTRIES and Singhal disguised them as Projects and started supplying TMT to them with the negotiated price approval from the Regional Manager. As Regional Business Manager (Long Products), Atul Mathur was also part of the approvals. During 2016 and 2017, about 10,000 Tonne was supplied to these two firms by offering heavy discounts in the name of Projects.
Parallelly the same game was started at the Faridabad Branch of Northern Region of CMO-SAIL. GAURI BUILDCON, a firm belonging to Jagdish Rai Chaman Lal (a Dealer for TMT Bars attached to Faridabad Branch) was introduced as a Project. Over 11,000 Tonne of TMT was sold to GAURI BUILDCON at highly discounted prices by illegally using the discount structure applicable for project and construction companies. Soon S M INFRACON PRIVATE LIMITED (a firm belonging to HARYANA STEEL MONGERS P LTD who is a Trader attached to Faridabad Branch) and KHANDELWAL GROUP P LTD were also roped in the entrepreneurial venture and about 4,500 and 2,000 Tonne of TMT respectively was sold to them. It is an interesting feature that Singhal belong to the state of Haryana and had worked at Faridabad Branch in the past.
The “Reinvention in Steel Selling” paid off and the senior management promoted Agarwal to the post of Executive Director. In Sep 2019, he was assigned the coveted post of Executive Director (Sales & ITD) i.e. Head of Sales in SAIL. It was the opportune moment for him to apply the invention on Pan India basis, which was mastered in Northern Region with the help of Singhal.
Immediately after taking as Head of Sales, during October 2019BHARAT INFRA AND CONSTRUCTIONS (a firm belonging to KAILASH STEEL ENTERPRISES, a Vizag based Trader) was roped in at Pune Branch of Western Region of CMO-SAIL. The firm got its GSTIN on Oct 14, 2019 and SAIL began supplies from Nov 2019 and end up selling about 40,000 Tonne of steel at highly discounted prices. To read the complete story on BHARAT INFRA AND CONSTRUCTIONS click on the link given below.
Seeing that Abhijeet Kumar the then Regional Manager of Western Region has perfectly handled the sales initiation process for BHARAT INFRA AND CONSTRUCTIONS, in Jan 2020 another firm named FIRST INDIA INFRASTRUCTURE PRIVATE LIMITED was roped in the Western Region at its Baroda Branch. 25000 Tonne TMT Bars sold. The choice of both the branches i.e. Pune and Baroda were also made very carefully and diligently. Both being insignificant in terms of customer base; with no railway siding/rake formation possibility; with no warehousing facility, served a perfect recipe for Direct Despatch by Road. You must be aware that Direct Despatch by Road is the most ideal mode for Traders as here material is handed over to them at the gate of the SAIL plants and therefors they are free to move the same anywhere in India resulting in substantial savings on the logistics costs.
Opportunity that provided post retirement dividends to Agarwal
OFB Tech P Ltd (OfBusiness) a a private company incorporated on December 24, 2015. It is a B2B online platform for procuring steel and other items for their clients. In other words, it is a trading firm which uses technology to reach out to users/customers. Just like Traders, the B2B online platforms generates profit by charging a markup on the purchase price. Under no curcumstances the firm can be be classified as “PROJECTS” under the sales and marketing guidelines of SAIL. BRICK2WALL INFRATECH PVT LTD, Zhuzoor, Zetwerk, INDOSUP Infra, Ignite Steel Solutions, E-Nirman, Bright Infra Solutions etc. are some other B2B companies who are in the business of procuring steel for their clients.
Though OFB was a B2B company which we call Trader in local parlance, SAIL started selling steel to the firm at Negotiated Prices under Projects scheme. With the intent of expanding B2B operations in the country, OFB started scouting for venture capitalist who can invest in their firm. With funds from Soft Bank, Tiger Global, Zodius Capital, Falcon Edge, Matrix Partners India etc. the firm started coming in limelight as a B2B online platform.
Once flush with funds, OFB wanted to expand its operations as well as its volume of steel from SAIL. But with OFB coming to widely known as a trader, SAIL officials were afraid of supplying large quantities of steel to OFB at Negotiated Prices under Projects scheme. This was the time when OFB started registering new firms so that SAIL officials continue to supply steel to them in these new firms under the Projects scheme on heavy discounts. By that time Mahesh Chand Agrawal has also taken over as ED(Sales & ITD) at CMO SAIL in Sep 2019.
OFCONS PROJECTS & SERVICES P LTD (now OFG MANUFACTURING BUSINESSES PRIVATE LIMITED) was the first firm which with SAIL officials started the business of supplying steel (TMT Bars) from Aug 2020. About 30,000 T of TMT Bars were supplied to the firm till Apr 2022 and after that the business tranasactions were discontinued with the firm. Going ahead various firms were roped in by OFB, in connivance with SAIL officials, to buy steel at highly discounted prices using the Project Tool Kit. It may be noted here that Agarwal, after his retirement on July 31, 2023, joined OFB on October 04, 2023 as a director. This was facilitated by SAIL CMD Amerandu Prakash, when he did not initiated Regular Departmental Inquiry against Agarwal despite written directions from Ministry of Steel.
SAIL keeps Bleeding; Director(Commercial) keeps Sleeping
After OFCONS PROJECTS & SERVICES P LTD, camouflaging Traders with the clothing of Projects became a custom in SAIL. In October 2020, Project MOU was signed with VENKATESH INFRA PROJECTS P LTD. All those who joined the “PROJECT SCAM BANDWAGON” were rewarded with promotions and plum postings. On the other hand, those who had reservations in supplying steel to Traders in the name of Projects and refused to go against the policy guidelines were reprimanded.
Many of the above firms have been covered in detal in our previous
articles for which links are given below.
https://www.bureaugram.com/news/nexus-between-ofbusiness-and-sail-officials
Here we are discussing the beginning and the end i.e OFCONS PROJECTS & SERVICES P LTD and FIESTO INFRA PROJECTS P LTD.
THREAD-BARE : OFCONS PROJECTS & SERVICES P LTD
Southern and Western Region of CMO-SAIL under Vinod Gupta and Abhijeet Kumar as their Regional Managers were chosen, to initiate the supply 30,000 T of TMT Bars to OFCONS PROJECTS & SERVICES P LTD at highly discounted prices in the name of Project.
By now you must have understood that SAIL PROJECT SCAM is a widespread racket involving pan India firms and locations. Southern Regions contributed maximum to such sales under its two Regional Managers: Vinod Gupta from Feb 2018 to Apr 2021, Suresh Rajamohan from May 2021 to July/Aug 2023.
Gupta, being son of a 1958 batch IAS officer who was also Lt. Governor post his retirement, had a strong hold on the SAIL management. Out of 36 years of his career, about 31 years were spent by him in NCR. With the blessings of his father, he enjoyed all kinds benefits viz. desired locations, desired lucrative posts, timely promotions etc. throughout his career in SAIL. The other non-Project firms whose foundation was laid under Gupta’s tenure in Southern Region are : OAGRI FARM P LTD (2000 T); RAUNAQ GROUP {RALAGO ENGG P LTD and RAUNAQ FOUNDATIONS} (40,000 T); BRICK2WALL INFRATECH PVT LTD (55000 T); B.RATHISH BALAJI (10,000 T) etc.
The baton was passed to Suresh Rajamohan and the PROJECT SCAM continues.
Major new firms added to the list of Southern Region under tenure of Rajamohan are LENDCIERGE ESTATE P LTD (75,000 T); NOBLE TECH INDUSTRIES P LTD (30,000 T); ARTISTY INFRACON LLP (18,000); STRIKE INFRACON LLP (33.000) ; V K ENGINEERING CONTRACTORS (22,000 T) etc. Honouring the calibre of Rajamohan, he was promoted to Executive Director in July/Aug 2023.
Coming back to Gupta, after his stint at Southern Region as Regional Manager, management again rewarded him with the post of Executive Director at Delhi. He is superannuating on April 30, 2026 and if sources are believed he would also not get retiral benefits like other officers of SAIL who were suspended, as LOKPAL/CBI investigations are still on.
All three were suspended on January 19, 2024, along with other 26 officers after the order dated January 10, 2024 in the matter of Venkatesh Infra Projects P Ltd. After suspension revocation Kumar was brought back on the same post on which he was alleged and then also promoted to ED despite pending LOKPAL/CBI investigations.
THREAD-BARE : FIESTO INFRA PROJECTS P LTD
FIESTO INFRA PROJECTS P LTD was incorporated on November 07, 2023, took GSTIN - 07AAFCF6949M1ZZ on November 24, 2023 and immediately started lifting TMT Bars from BSO-Jaipur from Dec’2023 under “PROJECTS”
Shri Arjun Kumar and Shri Santosh Kumar serve as directors at FIESTO INFRA PROJECTS P LTD. Both were partners in ZARIELLE PROJECTS AND SERVICES LLP also.
Starting from Dec 2023, about 4,000 T of TMT Bars were sold by SAIL officials at heavy discounts by illegally deploying the policy and guidelines and discounts which were applicable for Projects.
LOKPAL order dumped by SAIL officials
It may be noted that the modus-operandi adopted by SAIL officials with FIESTO INFRA PROJECTS P LTD was the same as was adopted by SAIL officials in the supply of 1,50,000 Tonne of steel to M/s Venkatesh Infra Projects P Ltd.
Therefore, main attraction of supply to FIESTO INFRA PROJECTS P LTD is the audacity of SAIL officials in continuing the supply to the firm even after the order dated January 10,2024 where LOKPAL handed over the sales issue of M/s Venkatesh Infra Projects P Ltd to CBI. Not only the matter was handed over to CBI but LOKPAL made scathing remarks on the functioning of SAIL and directed SAIL to formulate a clear and unambiguous policy with regard to MOU, pricing and relaxation.
Source : Order dated January 10, 2024 of Honourable LOKPAL of India
https://lokpalonline.gov.in/lokpalonline/cdn/web_upload/CN73,74and752023_1705052862.pdf
Height of the matter is that immediately after order dated January 10 ,2024 of LOKPAL, 29 officials were suspended by Ministry of Steel on January 19, 2024 but even such an act could not deter SAIL from supplying steel to Traders in the name of Projects.
Based on the timelines of sales to FIESTO INFRA PROJECTS P LTD, internal sources of SAIL say that three officers viz. Viney Kumar, BM/Jaipur; Hari Shankar Durgapal, RBM(LP)/WR and T N Natrajan, RM/WR would be involved in the approval process.
Other stories on SAIL PROJECT SCAM
https://www.bureaugram.com/news/sail-project-scam-a-syndicate-of-connivances
https://www.bureaugram.com/news/agarwals-agarwals-and-sail-officials-a-noticeable-nexus
https://www.bureaugram.com/news/agrawal-family-and-sail-officials-a-relationship-beyond-business
The article has been written based on information collected from various sources including some from SAIL.
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