‘Bogus’ MSMEs diverting subsidised coal to mafia-hit Varanasi market
Once a breeding ground for eastern UP’s gangs, Chandasi coal mandi near Varanasi is turning out to be a thriving marketplace for “bogus” micro small and medium enterprises (MSME) of Madhya Pradesh dealing in illegal sale of subsidised coal.bhopal Updated: Sep 16, 2016 13:03 IST
Once a breeding ground for eastern UP’s gangs, Chandasi coal mandi near Varanasi is turning out to be a thriving marketplace for “bogus” micro small and medium enterprises (MSME) of Madhya Pradesh dealing in illegal sale of subsidised coal.
Cops in MP’s Katni district of Madhya Pradesh have identified as many as 11 bogus MSMEs that have been possibly sourcing high quality coal from collieries of South Eastern Coalfields Limited (SECL) in MP and Chhattisgarh at subsidised rates and diverting it in open markets of UP and MP, including Chandasi in eastern UP’s Chandauli district, just 10 km from Varanasi.
The revelation was made following the arrest of five persons, including Balaji Traders chief Gokul Das Vishwakarma and Prahlad Enterprises chief Prahlad Agrawal alias Pappu, last month by Katni police.
The five were among the eight persons booked for running a racket that sourced coal through a bogus MSME Balaji Traders at a subsidised rate of Rs 1,900 per tonne and selling it through a licensed coal stockist Prahlad Enterprises at double or triple rates in markets, particularly in UP.
Investigations revealed the possibility of more licensed coal stockists like Agrawal operating in Katni via bogus MSMEs.
“We got a list of 45 MSMEs in Katni getting coal at subsidised rates from SECL’s collieries in Shahdol, Anuppur and Umaria (MP) and Koriya in Chhattisgarh,” superintendent of police Katni Gaurav Tiwari told HT on Thursday.
On verification, at least 11 of these MSMEs, including Balaji Traders who were into production of ceramics, lime, minerals and chemicals, were found to be bogus as they were not in operation for four months to a year despite getting subsidised coal during the same period, Tiwari said.
Katni police have asked these MSMEs to respond to questionnaire by September 17 to determine the monetary gain they have garnered by possible illegal sale of subsidised coal. A source said that the coal sourced from Jharkhand fetched prices ranging between Rs 6,500 and Rs 7,500 per tonne while those bought from MP and Chhattisgarh was priced between Rs 4,000 and Rs 6,000 per tonne. After registering as MSME, firms got 100 to 1,200 tonnes of coal per month from SECL under a Fuel Supply Agreement (FSA) for production of goods and services.
But instead of using the coal for their own production (coal candies in Balaji’s case), it was diverted to open markets with the help of a licensed coal stockist.
The subsidised coal was also sold at higher prices to brick kilns in Madhya Pradesh, besides other enterprises and business units, particularly in Indore and adjoining areas. “We’ve already written to the SECL in Bilaspur for suspending the FSA and related coal supply to these bogus companies and are also working with the state’s anti-corruption watchdog Lokayukta special police for probing the actual financial gains,” said Tiwari.
Also under police scanner are some chartered accountants who could have helped these MSMEs to furnish false coal usage certificates to ensure uninterrupted supply of coal from SECL collieries. Surprisingly, no action on verifying the actual business of these MSMEs was taken by police despite complaints since 2009. In the past, Chandasi mandi, one of the biggest coal markets in India, has been a breeding ground for gangs of eastern UP, including the Mukhtar Ansari-Munna Bajrangi gang and the rival headed by jailed UP MLC Brijesh Singh.