A Delhi government bureaucrat, under scanner for his decision to change a business model that allegedly caused the government losses to the tune of Rs 374 crore, had proposed a cabinet note for the approval of his decision.
Last week, the Anti-Corruption Branch registered an FIR against IAS officer Chetan B Sanghi, currently posted as principal secretary (industries, urban development and vigilance) for allegedly causing losses to the government by changing the business model.
The FIR was based on a complaint filed by city advocate Vivek Garg with the Delhi government’s anti-graft unit. Garg had accused Sanghi of causing a loss to the exchequer during the development and maintenance of industrial areas at Narela and Bawana by changing SPV business model -- earlier approved by the cabinet and the L-G -- to the annuity model. Sanghi was then CMD of the Delhi State Industrial and Infrastructure Development Corporation Ltd. (DSIIDC).
An annuity model involves payments at regular intervals, guaranteed for a fixed number of years. A special purpose vehicle (SPV), on the other hand, is an entity or a subsidiary, which is formed for a single purpose of a well-defined project.
Documents accessed by HT reveal that while the ACB was conducting an enquiry since August 7, Sanghi barely months after taking charge as principal secretary (industries) proposed a note on October 20 for the Cabinet’s approval in justifying the change of the business model adopted.
When contacted, Sanghi declined to comment. Other officers said that this was only a coincidence and that the finance department had sought comment from the industries department in February 2014. “The timing is a coincidence. Any other officer would also have sent the final proposal. It was started in 2014 and it took time to get comments. The proposal note has comments from all departments. The finance department also noted that there was no loss caused. In fact the new business model saved government R1,500 crore,” said a government official.
A government spokesperson refused to speak on the issue.
On November 9, after four months of preliminary enquiry, an FIR was filed against Sanghi. According to the complaint, during the industrial area’s redevelopment in 2010, various models were discussed. The cabinet had then approved a business model, further approved by the L-G based on formation of a Special Purpose Vehicle (SPV).
But according allegations in the FIR, instead of implementing the cabinet decision, Sanghi allegedly revised the proposal changed the business model from SPV to annuity, causing a loss of over R376.74 crore.
The ACB is yet to interrogate Sanghi in connection with the case.
In an earlier FIR registered on November 7, Sanghi has been accused of converting around 350 industrial sheds at Narela and Bawana from leasehold to freehold without taking approval from the Delhi Development Authority. The FIR was registered after the DDA vigilance director confirmed to the ACB that the transfer of land from leasehold to freehold was illegal and that the ownership of the land is with the DDA.
The investigating officer, in the FIR, has also put on record that after an enquiry was started, despite writing thrice to the DSIIDC director , the corporation did not provide papers or join the probe.