Cash-for-contract scandal hit KSDL embroiled in another scam of Rs 20 crore, reveals govt document

The government directed the KSDL to furnish the action taken report on May 31, 2021. However, the state government said it 'did not receive any information on the action taken report.' (Image source: https://mysoresandal.karnataka.gov.in/)

The cash-for-contract scam-hit Karnataka Soaps and Detergent Limited (KSDL) is embroiled in yet another alleged scam of Rs 20 crore relating to procurement of substandard raw material for its products including the Mysore Sandal Soap, reveals a government document.

The Principal Secretary of the Commerce and Industry Department wrote a letter to the Managing Director of KSDL on February 28 regarding the steps taken in connection with the 'financial irregularities of more than Rs 20 crore in the purchase of raw material soap noodles' three years ago.

Within days, the KSDL chairman and the BJP MLA from Channagiri Madal Virupakshappa's son Prashanth Kumar M V, was caught red-handed by Lokayukta officials collecting a bribe of Rs 40 lakh cash from a contractor, allegedly on behalf of his father at the KSDL office.

Further raids led to the recovery of Rs 8.23 crore cash from the house of the Madal family, huge quantity of gold and silver ornaments and large investment in land.

Prashanth is a Karnataka Administrative Services officer and is the chief accounts officer of Bangalore Water Supply and Sewerage Board.

The scam, according to the KSDL sources, had taken place in 2020 and an investigating team was set up accordingly, show the document.

The investigation officer had found that at least four officers holding high positions in the KSDL got the government job based on a degree certificate from an unrecognised university. He had recommended action against them, the letter said.

The government directed the KSDL to furnish the action taken report on May 31, 2021. However, the state government said it 'did not receive any information on the action taken report.' The KSDL also did not tell the government about the action taken against officers against whom Lokayukta had recommended recovery of the amount, the letter added.

The KSDL Managing Director, according to the letter, did not provide information about the action taken against a general manager who was holding the senior position in the organisation based on an 'ineligible' educational qualification.

The government also said in the letter to the MD that the KSDL had entered into an agreement which allowed the Karnataka Milk Federation to utilise 1,450 sq ft of its land on its campus.

"However, the administrative officers 'colluded and allowed a private organisation to operate a hotel in 3,000 sq ft land. Regarding this case, the lawyers of the organisations are being requested to dispose of the case at the earliest," the letter read.

Regarding the case, the letter further said, "You said that the case is in progress and the next date of hearing has not been fixed yet but you did not furnish any detail to the government." The state government also took objection over not furnishing the details of the action taken even after a year.' "Immediately send a detailed report with clear documents with the action taken report to the state government," the letter said.

According to KSDL sources, it has not sent its reply to the state government.