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PMO confirms fund fraud

Coal India diverted money meant for Prime Minister’s Relief Fund, reports KP Narayana Kumar.

delhi Updated: Oct 08, 2007 02:58 IST

The Prime Minister’s Office (PMO) has confirmed that Coal India Ltd, a public sector undertaking, has illegally diverted at least a quarter of the funds that it had collected for over a decade and meant for the Prime Minister’s Relief Fund.

Responding to a right to information (RTI) application, the PMO said it received only Rs 30 crore out of Rs 40 crore that Coal India claimed to have collected towards the fund by deducting a day’s wages from its 80,000 employees.

It is still unclear where the money has gone. Coal India said it would respond to the story carried by Mint on June 20, but never did.

Mint had reported that South Eastern Coalfields Ltd, one of the subsidiaries of Coal India, diverted relief funds to what was dubbed as a joint consultative committee account in State Bank of India, run by a group of union leaders and officers at the firm.

Coal India collected the funds on several occasions, using either natural calamities, such as earthquakes and the tsunami, or the Kargil war.

Questions about the missing funds were raised when South Eastern had to reply to an RTI application filed by Muzibur Rehman, an employee.

Following Mint’s story, Coal India chairman Partha S. Bhattacharya said the firm would seek an appointment with the PMO to deposit the funds that had been held back.

Subsequent to the story, the Central Information Commission (CIC) had directed the PMO to inquire into the “missing funds” allegations and submit a report, which it did last week.

The report says Coal India had collected around Rs 7 crore in 2005 towards the relief fund and aimed at rehabilitating people affected by the earthquake in Jammu and Kashmir. That money wasn’t deposited in the fund.

Coal India also authorised purchase of what it claims to be relief material but without seeking approval from the PMO. That spending by South Eastern Coalfields also wasn’t audited.

Similarly, during the 1990 Kargil war, Coal India collected around Rs 7 crore from its employees. That money was deposited into the fund only this year and “after the initiation of this inquiry”, according to the PMO report.

“We are not custodians of the money that has not been passed on to the relief fund,” said an official in the PMO, who did not want to be named. “So, that makes it difficult for us to suo motu order an investigation. We may also look at how we can better the process through which funds are sent by donors. But that will have to be after the CIC passes its order.”

Shekhar Singh, one of the leaders of the RTI movement in India and a member of the National Campaign for People’s Right to Information, says the PMO should get the matter investigated.

“If somebody claims to be collecting funds towards the PM’s Relief Fund and diverts funds, whose responsibility is to get the matter investigated? It is the PMO’s duty. The PSU surely will not investigate itself,” he added.

The Prime Minister’s Fund was established by the country’s first prime minister Jawaharlal Nehru in January 1948 to assist displaced persons from Pakistan. The fund is now utilised to render immediate relief to families of those killed in natural calamities as well as victims of major accidents and riots.

The fund consists entirely of voluntary public contributions. The corpus of the fund is invested with banks in fixed deposits and disbursements are made with the approval of the prime minister.