CAG puts Nitin Gadkari’s Purti Group firm under scanner for financial irregularities

By NewsGram Staff Writer

The Controller and Audit General (CAG) presented a report in Lok Sabha yesterday, charging Purti Sakhar Karkhana Limited (PSKL) of non-compliance of interest subsidy conditions.

The interest subsidy was granted to it by the Ministry of New and Renewable Energy and the report named Union Minister Nitin Gadkari as one of the "promoters and/or directors" of the firm.

The report on 'Financing of Renewable Energy Projects by Indian Renewable Energy Development Agency Limited (IREDA)' stated that the ministry had sanctioned Rs 1.92 crore as interest subsidy to the company and released Rs 1.37 crore to IREDA in June 2004, on the basis of net present value of PSKL.

The firm, according to the report, failed to meet the conditions of the interest subsidy extended to it. The project employed 100% coal based operations as against the upper limit of 25% allowed under subsidy schemes. The company also failed to meet the condition stipulating that the project should continue for at least ten years after completion.

Moreover, CAG found that although the load had become a non performing asset in March 2007 the actual benefit from the subsidy amounting to Rs 1.66 crore was passed on till December 2009.

However the CAG report said that IRDEA management stated in April 2014 that PSKL had settled its account and paid the dues. IRDEA also claimed that it is not necessary if an account becomes a non performing asset, then interest subsidy is not to be passed.

"The reply of the management may be seen in the context that avoiding default on repayment by the borrower and limited deviation from renewable energy sources (up to 25 per cent) were important components of the scheme, and as such, IREDA cannot change/interpret specific conditions for grant of subsidy of GOI schemes. Further, the OTS proposal was sanctioned on the ground that the project was no longer an RE (renewable energy) project," the CAG report stated.