NIPER lost half a crore interest from FD due to nepotism of Chairman Investment Committee

To,

SHRI JAVTAR SINGH BHADANA

Hon’ble members of Parliament,

LOK SABHA

 5 September 2012

Dear Sir(s),

Thanks for asking the following question for WRITTEN ANSWERS to be tabled on Thursday, Sep 6, 2012

Loss of Interests on FDs

4141.            SHRI AVTAR SINGH BHADANA:

Will the Minister of CHEMICALS AND FERTILIZERS be pleased to state:

(a) whether it is a fact that the Comptroller and Auditor General has observed a loss of interest of approximately Rs. 47 lakhs in Fixed Deposits (FDs) by National Institute of Pharmaceutical Education & Research (NIPER), Mohali, Punjab;

(b) if so, whether the matter has been examined by the Government and the responsibility fixed in the matter; and

(c) if so, the details thereof and if not, the reasons therefor?

Sir, loss of interest is little more it is 49.56 lakhs not 47 lakhs, For this loss Present officiating Director K K Bhutani is responsable He was the chairman of the investment committee for 10 years

CAG (DPC Act 1971) Audit and inspection report on the account of NIPER for the year 2009-10 obtained By RTI. CVC has written a one and half page long para vividly describing how public money is misappropriated.

Relevant extract are as under:

Part-II-A             Serious irregularities

Para I                 Loss of Interest-Rs. 49.56 lakh

The institute had been maintaining Endowment Fund (Corpus Fund) as per the directions (November 1997) of the Ministry of Chemicals & Fertilizers, Department of Chemicals & Petro-Chemicals, Govt. of India (GOI)

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Audit observed that as om 31^st March 2010, the institute was having balance of Rs. 25.24 crore in the Fund which was invested in fixed deposit in the State bank of Patiala, Mohali.

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Had the institute taken premature withdrawal of fixed deposit of Rs. 10.89 crore in March 2006/May 2006 which was inested at a interest rate of 7.25 persent and again invested it in fixed deposits at available higher interest rate of 8.10 present, the institute could have earned higher bank interest of Rs. 49.56 lakh (after adjusting interest loss of Rs. 16.84 lakh due to premature withdrawal of fixed deposit of Rs. 10.89 crore)

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It as also observed that the interest rate of fixed deposit investment of funds are being taken from the limited number (2-4 number) of banks which also lacked justification.

Caveat: Now the question is for who’s vested interest NIPER lost half a crore? Chairman Investment committee?

           I.    Nepotism of person responsible of investment is the cause of loss.

          II.     The same way Provident fund money were also invested causing loss of NIPER employees

On the contrary,

As per NIPER statutes Dated 30^th Oct 2003 Financial powers of Board of Governors are,

3.1.2 Functions and Powers

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(d)  to manage and regulate the finances, accounts, investments, property, business and all other administrative affairs of the Institute and for that Purpose, to appointment such agents as it may think fit.

(e)  to fix the limit of the recurring and the non-recurring expenditure for a year on the recommendations of the Finance Committee.

(f)   Subject to the provisions of the act to invest any money belonging to the institute including any unapplied income in any manner it thinks fit or in the purchase of immovable property in India.

However all the investments were done by keeping BOG in dark. Only taking cryptic agenda as “to ratify the minutes of Finance committee”