VB exposes attempt to defraud govt of Rs 59 cr | chandigarh | Hindustan Times
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VB exposes attempt to defraud govt of Rs 59 cr

chandigarh Updated: Jun 07, 2013 00:38 IST
Hitender Rao
Hitender Rao
Hindustan Times
Outdoor surveillance project

Findings of the Vigilance Bureau (VB) have revealed a series of omissions and commissions on the part of officials while probing the selection of system integrator for the supply, installation and management of outdoor surveillance system for the police commissionerates of Gurgaon and Faridabad.

Though no pecuniary loss was caused to the Haryana exchequer as no money was paid by the state government to the selected company for Rs 59-crore project, the report clearly indicates that there was a deliberate attempt to defraud the state government.

Some of the key bureau findings are:

The Haryana State Electronics Development Corporation (HARTRON) had given tender to an ineligible company which did not fulfill requirements of the tender. The tender was awarded without proper verification of bid documents.

An Indian company - LevelOne Communications (India) Pvt Ltd - had secured the order for outdoor surveillance project from HARTRON despite knowing that it was not a subsidiary of German entity. It used the name of a purported Germany-based company, LevelOne Communications, fraudulently to win the bid for the project. The Indian company is run by one Babu Joseph.

LevelOne Communications (India) Pvt Ltd had submitted scanned signatures of corporate officials of Germany-based Digital Data Communication (DDC). DDC, a multinational company does not have any projects in India. The VB investigations established that LevelOne Communications (India) Pvt Ltd is not a subsidiary company of LevelOne Communications, Germany.

To furnish a bank guarantee of Rs 5.90 crore, Babu Joseph mortgaged his house in New Friend's Colony, Delhi. "It is highly surprising that a person who is going to undertake a project worth Rs 59 crore had to mortgage his own property," the inquiry report said.

No documents relating to registration and accounts were submitted by LevelOne Communications (India) Pvt Ltd during the bid process. Hence, it is recommended that tender awarded to LevelOne Communications (India) Pvt Ltd may be cancelled as per the terms of the contract and fresh tenders invited, the report said.

The bureau recommended that LevelOne Communications (India) Pvt Ltd may be blacklisted by the Haryana government and their bank guarantee of Rs 5.90 lakh be encashed by the state government as per the terms of the contract.

The report said that DDC managing director Amanda Shu Wen Chen and chief financial officer Frank Stozem wrote a letter on January 12, 2012, from Taipei, confirming DDC's termination of business relationship with Babu Joesph. They also stated in the letter that they had withdrawn the right of representation and distribution of DDC products. Joseph was apparently a one-time distributor of DDC equipment.

Scanned signatures of the DDC managing director were used to forge letters and documents to make a bid for the project. This was substantiated by forensic examination of papers.

In response to an email sent by the VB to verify facts regarding LevelOne Communications, Ashok Kumar, counsellor (commerce) at Indian embassy in Germany, said that the Chamber of Commerce of Dortmund in Germany has informed that Digital Data Communication GmbH exists at Zeche-Norm--Strabe 25, 44319 Dortmund and not LevelOne Communications.

The communication from the Indian Embassy in Germany, a copy of which was also marked to under secretary, European West Division, Esha Srivastava, further said that Wolfgang Kohler was not listed as chief general manager of the company.

The e-mails sent by Kohler to HARTRON in which he refuted the e-mail communications of Amanda and disassociated her from the company were also found to be fabricated. The bureau found that these emails actually originated from an IP address located in Delhi's New Friends Colony (Babu Joseph's residence). The internet domain level-one communications.com was created on November 3, 2011, just a day after HARTRON sent an email to Amanda seeking clarification on Joseph's authenticity.

The Chamber of Commerce in Munich did not have any information regarding Babu Joseph. A criminal case will be registered against him in Chandigarh where the agreement was executed between his company and HARTRON.