To

The Director,

Directorate of Vigilance and Anti-Corruption

No 293, MKN Road, Alandur, Chennai 600 016

Sir, Sub: Complaint seeking FIR and Investigation into the massive Ration procurement scam in TamilNadu Civil Supplies Corporation between 2015 to 2021.

Arappor Iyakkam is a registered organization working towards Transparency and accountability in Governance. Arappor Iyakkam has been legally fighting Corruption at high places by analysing public data that is available online and through information accessed by Right to Information Act. Arappor Iyakkam is submitting this complaint to the Directorate of Vigilance and Anti-Corruption with the prayer to register an FIR and investigate into the large scale Corruption and unjust enrichment of a select set of firms related to T.S.Kumarasamy of Christy Friedgram group, who conspired with the public servants of the Tamilnadu Civil Supplies Corporation (TNCSC), Food Department and the officials of the public sector enterprises such as MMTC, State Trading Corporation (STC), Kendriya Bhandar in the procurement of food products for the Public Distribution System in Tamilnadu. The evidence we have gathered and analysed indicate how a select set of firms related to Christy Friedgram group have been favoured and unlawfully awarded TNCSC tenders for supply of Sugar, Palmolein Oil, and Dhal in collusion with public servants of TNCSC and other Public Enterprises. These select set of firms primarily include Christy Friedgram Industry, Fair Deal Food Ventures Private Limited, Rasi Nutri Foods, Suvarnabhoomi Enterprises Private Limited, Natural Food Products and Arogya Enterprises. It must be noted that this scam has taken place in the commodities that are fundamental to the food security of the nation, which is the Public Distribution system and such scams poses a threat to our food security as well. This complaint is based on information from public documents.

We submit that the list of violations include but not limited to:

  1. Alteration of Tender conditions/ prequalification criteria to favour select set of firms related to T.S.Kumarasamy of Christy Friedgram group and ensure limited participation in tenders by excluding the bidders who have been supplying to TNCSC for years together.
  2. Participation in tenders only by select set of firms either related to Christy Friedgram group or those who bid on behalf of them and excluding all others leading to anticompetitive behaviour.
  3. Tenders were awarded to select set of firms related to Christy Friedgram group at abnormally high prices when compared to the prevailing market price. This has unjustly enriched the firms related to T.S.Kumarasamy of Christy Friedgram group creating a heavy loss to the exchequer. The unjust enrichment is to the tune of more than 2000 crores.
  4. Violation of minimum time limit between floating of tenders and closing of tenders.
  5. Conspiracy/ Collusion leading to Corruption among public servants of TNCSC, select set of firms related to T.S.Kumarasamy and public sector enterprises/ societies such as MMTC, STC, Kendriya Bhandar, NACOF

The illegalities that have taken place in award of tenders is in violation of the The Prevention of Corruption Act, TN Tender Transparency Act, several sections of IPC, CVC Guidelines, Competition Act and Financial Rules

The modus operandi used in this Corruption is unique. Many firms were participating in the Sugar, Dhal and Palmolein tenders until a few years back. When the firms related to Christy Friedgram group entered the competition, the public servants of TNCSC change tender conditions to allow select set of firms related to Christy Friedgram group alone to compete and exclude all the bidders who were supplying to TNCSC until that point of time.

The select set of firms win tenders because their own group of firms which are related parties alone are made eligible to participate in the tender. They use this advantage and all the related parties quote at much higher rates than market rates for one amongst them to win tenders. These related firms then sub contracts the orders to the same set of earlier contractors who were supplying to TNCSC and the sub contractors do the work of supplying upto the final delivery point of the godown at prevailing wholesale rates. These firms related to the Christy Friedgram group thus became middlemen earning thousands of crores illegally for just issuing bills and invoices to TNCSC and sub contractors. It is important to note that the sub-contractors are the same firms who were supplying products to TNCSC for many years, but are now unable to meet the unreasonable tender specifications. Excluding such firms was the main purpose of modifying the tender conditions. If it was not for firms related to the Christy Friedgram group and this tender collusion, TNCSC would be purchasing the products directly from the current sub contractors who were the earlier contractors at much lower prices. Once the illegalities in the Egg scam of Christy group started to come out in the open, these select set of firms related to Christy Friedgram group started adopting another modus operandi as well. Public sector Enterprises of the Central Government such as the State Trading Corporation (STC) of India Limited, MMTC and society such as Kendriya Bhandar were made to bid on behalf of these select set of firms related to Christy Friedgram group for TNCSC tenders. Christy groups of firms became the only buyback supplier for them. These public sector enterprises colluded and quoted at rates significantly higher than the market rates, however withheld a very small margin of just 0.5 to 1% for themselves and transfered the entire unjust enrichment to select set of firms related to the Christy Friedgram group. These firms withheld major margins of the difference between quoted rate and market rate with them and they further sub contracted all the supplies to the same set of Contractors who were participating in the these tenders in earlier years at near market rates.

Arappor Iyakkam through this complaint prima facie establishes evidences of illegalities done by public servants of TNCSC, public servants of Public Enterprises like MMTC, STC, Kendriya Bhandar and select set of firms related to Christy Friedgram group. All these evidences warrant immediate filing of a FIR under the Prevention of Corruption Act, Conspiracy, Fraud and other related sections of IPC, TamilNadu Transparency in Tenders Act, Competition Act and other related acts. All the evidences placed here are public documents collected through online, Right to Information Act etc. The evidences explained below discloses a clear case of appearance of cognizable offence.

I. Corruption in Sugar Tenders

1) We submit that TNCSC has been floating tenders for around 20,000 – 75,000 tonnes of sugar every 1 - 3 months for supplying to the Public Distribution System of TamilNadu. Until January 2019, more than 10 bidders, including Sugar manufacturers participated in the tenders to supply sugar for PDS. However, from February 2019, following list of illegalities and irregularities in the award of tenders started taking place, which led to unjust enrichment of select set of firms related to Christy Friedgram group.

2) Deliberate Alteration of Tender Conditions to Favour a Few Bidders While Excluding Many Other Bidders: In February 2019, the tender conditions were drastically changed in a very short time period. Evidences indicate that tender conditions were altered to favour the select set of firms related to Christy Friedgram group and exclude many other bidders who were supplying products to TNCSC for many years. Even many sugar manufacturers who were supplying sugar to TNCSC for many years are unable to satisfy the changed tender conditions.

Before the change in the tender conditions, nearly 12 to 15 bidders participated and qualified for the tenders. However, after the change in tender conditions, only 2 to 3 firms related to Christy Friedgram group and Public Enterprises are technically qualifying across various tenders for supply of Sugar.

The below table shows a comparison of the before modification of tender conditions and after modification of tender conditions for similar tender quantity.

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a) The Prior Experience tender condition has been increased drastically without any reason. Till January 2019, the condition was 4000 MTs of Sugar or to the value of Rs.16 Crores of sugar/Food commodities in one supply order in any of the last 3 financial years, which was reasonable for may bidders to participate. This was drastically and arbitrarily increased from the February 2019 tender, and the condition was 15000 MTs of Sugar/food commodities in one single contract and three such contracts should have been in any of the last 5 financial years. This condition has been made very stringent, and is to deliberately exclude most of the bidders.

In the NIT No. COM1/028000/2019, July/August 2019, an additional condition has been introduced, which is that the bidder should have supplied Sugar / Food Commodities of at least 50% of the current tendered quantity (75,000 MT) in any two of the last three financial years (Annexure 3).

b) The tender conditions state that the bidder should have delivered sugar / food commodities to at least 100 delivery points in any three of the last five financial years in single contracts. The 100 delivery point requirement also clearly indicates that TNCSC intends to limit the number of bidders supplying Sugar to just two or three bidders. Before modification of tender conditions, many bidders used to supply Sugar, and therefore the 236 delivery points used to be distributed among large number of bidders, which used to work out to only 20 to 30 delivery points for each bidder. Hence it is not possible for most bidders to have supplied to 100 delivery points in a single contract. However, as TNCSC wants to favour select set of firms related to Christy Friedgram group, the requirement of 100 delivery points has been added since it had that experience in other food commodities.

c) The minimum quantity of supply by a bidder namely the Offered Quantity has been arbitrarily increased from 4000 MT to 60% of the tendered quantity which works out to 30,000 MT • Contradictory to the maximum monthly production limit: Many millers are unable to meet the Offered Quantity specification because of the maximum monthly production limit set by the Ministry of Consumer Affairs, Food and Public Distribution for sugar millers. Therefore, this condition has been brought in to eliminate most of the millers by keeping the minimum supply quantity namely Offered quantity as more than their maximum allowed production limit. (Annexure 10) • Limits Competition: This condition clearly indicates the intent of TNCSC to limit the number of bidders supplying Sugar to just 2 or 3 bidders. As a Government department, it the duty of TNCSC to promote competition and to give chance to numerous bidders, and therefore it is irrelevant to have such huge offered quantity from one bidder. Even if they wanted to keep minimum offered quantity of L1 as 60% to ensure bulk of the quantity in a tender to be supplied by one person, then atleast the tenders should have been floated regionwise to ensure that there is maximum participation of existing bidders such as sugar manufacturers. Three tenders were floated with new tender conditions since February 2019, and in all the three tenders, it is only the select set of firms related to Christy Friedgram group who have qualified in the tenders. Kendriya Bhandar also bid on behalf of the select set of firms related to Christy group. The drastic modification of the tender condition over a short period of time is completely baseless and arbitrary, done to favour the select set of firms related to Christy Friedgram group and exclude many other bidders, which is a violation of the TamilNadu Tender Transparency Act, 2000 and CVC Guidelines.

d) Infact, just before this tender where only 3 people participated, there was another tender floated in January which was opened on 28/01/2019 as shown in Annexure 8 where 13 bidders participated with earlier tender conditions. Christy group brought in Kendriya Bhandar and they quoted Rs 32.9 for minimum offered quantity of 4000 MT. So as L1, Kendriya Bhandar was asked whether they can supply the entire quantity at Rs 32.9 per kg. Kendriya Bhandar declined and said they could only supply minimum offered quantity of 4000 MTs alone. Other bidders also declined to match for rest of the quantity as Rs 32.9 was way below market rate of around Rs 37 per kg. TNCSC could have invoked the anti competitive behaviour and market rate comparison rules as per TN Tender Transparency act and rules, could have rejected Kendriya Bhandar and could have got the supply from L2 and others who were ready to supply at market rate. Instead TNCSC cancelled the tender, changed all the tender conditions and this resulted in Christy group alone participating. Kendriya Bhandar whose buy back supplier was Christy seems to have done this purposefully at the behest of Christy inorder to change tender conditions in Christy’s favour. Infact while the market rate remained the same, the same Kendriya Bhandar which quoted Rs 32.9/ Kg in January 2019 quoted Rs 49.9 / kg while bidding in July 2019 in TNCSC/19-20/ET/04 after the competing bidders were driven out. This shows how they colluded with Christy group to drive out all bidders out of TNCSC so that Christy group alone can benefit. The note file attached in Annexure 8A show how Kendriya Bhandar’s low rate resulted in cancellation of tender. However even this doesn’t warrant drastic change in tender conditions and the changes were completely to favour only Christy group.

3) Participation only by Related Parties – Bid Collusion, Bid Rigging, and Nepotism

It is also important to note that in all the three tenders from Feb 2019 until August 2019 after the change of tender conditions, only the related parties of Christy group have qualified. It is reliably learnt that in that even in that tender (TNCSC/19-20/ET/04), Kendriya Bhandar has bid on behalf of the firms related to Christy Friedgram group and it is this group that supplied sugar to Kendriya Bhandar. It is important to note that similar cartelisation by the firms related to Christy Friedgram group is evident in the procurement of other products as well. The table below shows how only the select set of firms related to Christy Friedgram group have qualified and won the Sugar tenders after tender modification. 3.jpg In TNCSC tenders, the tender quantity is procured not only from the lowest bidder, but also from the other qualified bidders who are willing to supply at the price quoted by the lowest bidder. Therefore, when only firms related to Christy Friedgram group, the tender quantity is procured only from these firms.

3 (i) Relationship Among Bidders

Mr. Thirumangalam Sengodan Kumarasamy is the Managing Director of the Christy Friedgram Industry Private Limited and is the main person behind the Christy group of firms. He is also the Managing Director of Suvarnabhoomi Enterprises Private Limited and the Whole-time Director of Fair Deal Food Ventures Private Limited. Apart from Thirumangalam Sengodan Kumarasamy, Vincent Joseph is a director in Suvarnabhoomi Enterprises Private Limited and Fair Deal Food Ventures Private Limited. Therefore, the two firms Suvarnabhoomi Enterprises Private Limited and Fair Deal Food Ventures Private Limited have two common directors.

Suvarnabhoomi Enterprises Private Limited and Rasi Nutri Foods are related firms as Muthu Gounder Subramaniam is the Director in Suvarnabhoomi Enterprises Private Limited, while his son Subramani Velmurugan is a Partner in Rasi Nutri Foods and the two Directors share the same address. Muthusamy Muraleeswaran is a director in both Rasi Nutri foods and Natural Food Products. Common Directors/Partners and related Directors/Partners across these firms shows the close association among these firms and confirms that they are related parties. The officials of the TamilNadu Civil supplies Corporation seem to have conspired with these related parties to change the tender conditions in their favour and enable only these related firms to participate and win tenders amongst themselves. This has led to a great loss to the exchequer as shown in the next section.

The relationship among these bidders for various products is summarized in the table below. 4a.jpg 4b.jpg 4c.jpg

4) Procurement at Abnormally High Prices Causing Huge Losses to Exchequer and Unjust Enrichment of firms related to Christy Friedgram group

Limiting of bidders and participation of related parties resulted in anticompetitive behaviour. The bidders along with officials colluded amongst themselves and started quoting artificial prices at rates much higher than the market rate. Consequently, this resulted in a huge loss to the exchequer and unjust enrichment of a few.
5a .jpg 5b.jpg The annexures mentioned gives the proof of the quote given by the bidders and the final order copy with rate issued by TNCSC. The table above clearly shows that the price difference between the market price and tender awarded price has increased after the tender conditions have changed. The market rate is extracted from https://chinimandi.com/wholesale-prices/ and adjusted by Rs 1.25 per Kg and Rs 300 per MT for unloading and transport expenses. GST of 5% has also been added to the market rate. The wholesale market rate for NIT No. COM1/028000/2019 as in Chinimandi is given in Annexure 9. It must be understood that market prices include profit as well. Annexure 9 shows that as per chinimandi, the wholesale price of sugar on the date of tender opening is Rs 3450 for 100 Kgs. Therefore the wholesale market price including packing and loading/unloading at Godowns is calculated as under 6.jpg While a conservative estimate of wholesale price is Rs 37.85, Sugar Tender NIT No. COM1/028000/2019 which was opened on 02/08/2019 was awarded at Rs 47.5 at Rs 10 more than the market rate. Amudham is a departmental store run by Tamilnadu civil supplies corporation itself. It sells retail products at a profit. Amudham’s retail rate at the time of tender awarding was only Rs 38.62. We have attached the bill for 1 Kg of sugar bought at Amudham Departmental store on 08/08/2019 in Annexure 9A. It must be understood that since TNCSC procures them in huge quantities, the price of procurement should be even less than the wholesale price. However, the tender was awarded for such huge quantities at almost Rs 9 more than even the retail arket rate. The difference between the tender awarded rate and wholesale market price is drastic for the August 2019 tender, which is around Rs 10 per kg amounting to a total estimated loss of more than Rs 72 crores in this one tender alone. The total estimated loss (comparing the tender awarded price and market price) in the tenders awarded to select set of firms related to Christy Friedgram group is approximately Rs 111 crores as calculated in the above table for tenders awarded in 2019 alone.

5) Firms related to Christy Friedgram Group are only Middleman During the execution of these tenders, the select set of firms related to Christy Friedgram group act only as middleman. After winning the tenders, the firms related to Christy Friedgram group sub-contract the tenders (supply and delivery) to the same firms that were directly supplying the products to TNCSC before the arbitrary and irrelevant modification of tender conditions. The sub contractors do the work of supplying the sugar until the final point of delivery points which are the Godowns of the PDS at wholesale market rates as it already includes profit. Firms related to the Christy Friedgram group pocket the entire difference of Rs 10/ Kg and the only work they do is to issue invoices to the TamilNadu Civil Supplies Corporation. Therefore, most part of the loss of Rs 111 crores to the exchequer ended up as unjust enrichment of select set of firms related to Christy Friedgram group. The whole set of changes in tender conditions, inclusion of Christy group of firms, exclusion of other bidders, award of tenders to select set of firms related to the Christy Friedgram group at rates much higher than market price etc shows that the public servants of TamilNadu Civil Supplies Corporation in conspiracy with the firms related to the Christy Friedgram group illegally transferred the wealth of the exchequer into the hands of firms related to the Christy Friedgram group. Apart from the above, TNCSC has floated 3 tenders in the year 2020 and early 2021 for Sugar namely File tender No. COM1/014050/2020 Tender opening date: 06/05/2020 (Event No: TNCSC/20-21/ET/02) for 60000 metric tonnes S-30 Sugar, File tender No. COM1/022280/2020 Tender opening date: 28/09/2020 (Event No: TNCSC/20-21/ET/10) for 60000 metric tonnes S-30 Sugar and File tender No. COM1/001302/2021 Tender opening date: 04/02/2021 (E tender No: TNCSC/20-21/ET/21) for 25000 metric tonnes S-30 Sugar. The tenders were won by Christy group’s Natural Food Products or Suvarnabhoomi Enterprises Pvt Ltd and has been awarded at Rs 10 more than the wholesale market rate which remained around Rs 36 to 38/ Kg including unloading, transport charges etc. The proof of tender quotes are shown in Annexure 11, 11 A and 11 B. The other bidders who have been brought by Christy such as MMTC, State Trading Corporation of India, Kendriya Bhandar and NACOF is to show as though there is a competition but in reality they are just proxy bidders for Christy group of firms. The proofs of how these public sector enterprises are proxy bidders of Christy group has been explained with document proofs in the next section. The total metric tonnes in these 3 tenders in the year 2020-2021 is equal to 1,45,000 tonnes which is equal to 14,50,00,000 Kgs of sugar.

Estimating the loss at Rs 10 per Kg, the loss to the exchequer and unjust enrichment of Christy group is equal to 14,50,00,000 Kgs * Rs 10 / Kg = Rs 145,00,00,000 Therefore, the total loss to the exchequer in Sugar procurement between Jan 2019 to March 2021 is Rs 111 Crores + Rs 145 Crores = Rs 256 Crores. Almost the entire amount is the unjust enrichment to Christy group which is a clear case of Corruption.

II. Corruption in Palmolein Oil Tenders

We submit that similar to the procurement of Sugar, a series of illegalities and irregularities have led to corruption and unjust enrichment of firms related to Christy Friedgram group for Palmolein Oil supply (1 Litre pouches) to TNCSC.

1) Deliberate Alteration of Tender Conditions to Favour a Few Bidders While Excluding Many Other Bidders

Similar to Sugar tenders, the tender conditions of the oil tenders have also been modified to exclude most bidders, and favour a few select bidders. The table below shows comparison of tender conditions of 3 tenders floated for procurement of palmolein oil by TNCSC in June 2016, October 2017 and November 2017. 7a.jpg 7b.jpg 7c.jpg

Detailed analysis of the tender conditions shows the following points:

• Alteration of Prior Experience from Palmolein oil to any food product to include favoured firms: In 2016-2017, the tender conditions required that the bidder should have supplied Palmolien Oil. However, in 2017-2018, this was changed to any food products so as to facilitate the qualification of select set of firms related to Christy Friedgram group. The department cannot claim to have changed this tender condition to increase competition, and include other bidders, because the change to average annual turnover as mentioned below clearly limits the competition

• Drastic and Arbitrary Increase in Average Annual Turnover: The turnover requirement has been increased from Rs. 5 crores in 2016-2017 to Rs 18 crores in October 2017, and then to Rs 22 crores in November 2017.

Therefore, the changes in the tender conditions clearly indicate that the tender conditions have been altered as per the business attributes of the select set of firms related to Christy Friedgram group in order to include them, and to exclude most of the bidders who were supplying oil to TNCSC until then.

In the tender BS3/028001/2019, TNCSC/19-20/ET-6, dated 03.07.2019 for 4,68,00,000 pouches, the conditions have been further changed to exclude bidders (Annexure 14). The conditions include that the bidder:

• Should have supplied not less than 90,00,000 pouches of Palmolein Oil / 15,000 MT of Food commodities in single contract and three such contract should have been executed in any of the last five financial years and the tenderer should have supplied not less than 50% of this tendered quantity of Palmolein Oil / food commodities in any of the last three financial years to any Government / Quasi Government / any Government institutions.

• Should have average annual turnover of at least Rs. 72 crores in the last three financial years

• Should offer a minimum quantity of not less than 60% In addition to modification of tender conditions, a few other methods are also used to exclude bidders from participating/qualifying in the oil tenders. Even if a few other firms meet the new tender conditions, it tis reliably learned that these firms are excluded by TNCSC in collusion with the select set of firms related to Christy Friedgram group by rejecting their samples unnecessarily, blacklisting them on the pretext of quality issues, and other unlawful practices. Due to this, other firms have now become reluctant to bid directly due to loss of reputation and fear of illegal action. Overall, due to the arbitrary modification of tender conditions and other exclusion methods, many of the contractors who were supplying oil to TNCSC became ineligible, and a new set of bidders entered. The tender conditions were primarily changed to suit the new set of bidders.

2) Bid Collusion amongst Participants:

The table below shows the qualified bidders since November 2017 after alteration of the tender conditions. 8a.jpg 8b.jpg 8c.jpg As can be seen from the table above, the change in tender conditions resulted in only 2 types of firms participating. The two types of bidders are a) Participation by related party firms linked to Christy Friedgram group b) Participation by Public Sector Enterprises as proxy bidders on behalf of Christy Friedgram group.

2(a): Bid Collusion: Participation by Related Parties linked to Christy Friedgram group: After tender conditions were modified since 2017, primarily three private firms namely Rasi Nutri Foods, Suvarnabhoomi Enterprises Pvt Ltd, and Natural Food Products have been participating in the tenders repeatedly. It is important to reiterate that these firms are related parties among themselves and to Christy Friedgram group as explained in the table on Page 10 and 11. It must be noted that the firms that were supplying oil earlier have not been able to participate and the new set of contractors after change of tender conditions are related parties.

2(b): Bid Collusion: Participation by Public Sector Enterprises as proxy bidders on behalf of Christy Friedgram group: As stated earlier, apart from the select set of firms related to Christy Friedgram group, the Public Enterprises have also been participating in the Oil tenders after the modification of tender conditions.
Generally, participation by Public Sector Enterprises adds credence to the tender process. However, Arappor Iyakkam has accessed documents that prove that Public Sector Enterprises/ societies (the State Trading Corporation of India Limited, Kendriya Bhandar, and MMTC Limited) are actually participating in TNCSC tenders on behalf of the select set of firms related to Christy Friedgram group alone. The Public Enterprises are having buy back agreement with the firms related to Christy Friedgram group alone and are participating on behalf of these firms (Christy Friedgram, Suvarnabhoomi Enterprises Pvt Ltd, and others). Having the Public Enterprise as a co-bidder helps reduce suspicion, and this strategy has been primarily used after corruption expose with reference to supply of eggs tenders for the mid-day meal scheme. Therefore, Christy group of firms seems to have got into a conspiracy with public sector enterprises such as State Trading Corporation, MMTC and Kendriya Bhandar. Christy group ensured that only their companies were part of the empanelled list in all the public sector enterprises or ensured that they get quote from Christy group of firms alone. The empanelled list is a list of firms from whom these public sector enterprises will get quote everytime they participate in TamilNadu civil supplies tenders. These public sector enterprises have colluded with Christy group of firms to ensure they alone are part of the empanelled list. The attached evidence has the empanelment tender of MMTC in 2018 (Annexure 40) to select buyback suppliers for a period of 2 years. It shows that the gap between Document publishing date and bid submission date is just 1 day. The Document publishing date and the bid submission start date is 19.03.2018 while the bid submission closing date is 20.03.2018. While tender rules demand that atleast 30 days of time between publishing and bid submission date, it is very clear that this whole tender process to select buy back suppliers has been a sham. They seem to have operated with a predetermined and probably preannounced to Christy group alone so that their set of companies alone could participate. This is one of the ways of excluding other companies from being buy back suppliers. Our RTI to MMTC seeking copy of letters inviting quotes from buy back suppliers revealed that Christy Friedgram Industry, Rasi Nutri Foods and Natural Food Products, all of whom were part of Christy group were the ones from whom MMTC had got quotes for civil supplies tenders. This can be seen in Annexure 41

Our RTI to State Trading Corporation also revealed that Christy Friedgram Industry and Rasi Nutri Foods were the only buy back suppliers from whom they have got quote for civil supplies tenders. Infact for each of the tender, there is not even 2 people from whom STC has got quotes, but only got it from either Christy Friedgram Industry or Rasi Nutri Foods as can be seen from Annexure 42 The notice for inviting trade margin quotes from EOI Empanelled parties for public sector enterprise STC clearly mentions that “The shortlisted backup supplier should submit an undertaking that in the subject tender they shall be exclusively participating only through STC and will not directly or through any other company participate in the said tender. If the same is found so, at a later date the said supplier will be debarred for further tender participation through STC under intimation to all state and central government department” . Sample document of STC for one of the tenders for palmoil attached in Annexure 43. However, there are several tenders where STC, MMTC and Kendriya Bhandar have participated amongst themselves in palmoil and for each of them, Christy group of companies has been the only empanelled list of suppliers. Therefore, it violates the clause in the STC tender mentioned above in point 1 as the same Christy group has provided quotes for all the three bidders. The clause clearly prohibits the buy back supplier participating in the TNCSC tenders directly or indirectly. This proves that there is very clear meeting of the minds and collusion in the bids. For example, in the tender BS3-07575-2018, the buy-back supplier for STC is Christy Friedgram Industry and MMTC has invited quotes for the same tender from Christy Friedgram Industry. Similarly, in the tenders BS3-40941-2018 and BS3-018910-2019, the buy-back supplier for STC is Rasi Nutri Foods and MMTC has invited quotes for the same tender from Rasi Nutri Foods. This can be verified from MMTC and STC documents in Annexures 41 and 42. For Kendriya Bhandar as well, we have accessed documents to show that Christy group is their buy back supplier as well. We are also willing to show it to investigating authorities if we are called in to show this document. In Tenders in 2020, they have also brought in NACOF as another bidder whose buy back supplier is also Christy group. Therefore, on the face of it, it appears that the tender is awarded to a firm after competition from 3 to 5 firms, while the fact being that it is the same Christy group that decides the quote for each of them even if it is a public sector enterprise. Once TNCSC floats a tender, the public sector enterprises gets a quote from Christy group which includes the margin for public sector enterprises and these public sector enterprises quotes it as such in TNCSC tender. These public sector enterprises withhold only a small margin of 0.5 to 1.1% and passes on the entire unjust enrichment to Christy group. Therefore, the quote for all the firms is decided by Christy group headed by Kumarasamy. In net, all these are just single bid tenders.

Much more importantly, it must be noted that the quotes were way above market rates and the entire unjust enrichment went to Christy group.

When Public Enterprises participate as trading companies in these tenders, it is their responsibility to check the market price of the product and quote accordingly. However, evidences indicate that the officials of these Public Enterprises have colluded with the select set of firms related to Christy Friedgram group and passed on the maximum profit to the Christy Friedgram group. The pricing leading to huge loss to exchequer in explain below

3) Collusion in bidding resulting in Procurement at Abnormally High Prices and heavy loss to Exchequer

Collusion of TNCSC officials, Christy firms and public sector enterprises resulted in a huge loss to the exchequer in palmoil tenders

For example, in the tender BS3/028001/2019 for procurement of 4,68,00,000 pouches which was opened on 26/07/2019, STC quoted Rs 83.10 which is a quote submitted to them by Rasi Nutri Foods (Annexure 42), part of Christy group. Natural Food Products and Suvarnabhoomi Enterprises Pvt Limited, both part of Christy group were the other 2 bidders. The lowest bidder namely Suvarnabhoomi Enterprises Pvt Ltd, quoted Rs 83. STC quoted Rs 83.10 and Natural Food Products quoted Rs 83.55 (Annexure 33) At this point of time, the wholesale market rate including packing and transporation cost and GST was Rs 61.35/ litre only, and even the retail price in Amudham Departmental store for 1 Litre pouch was only Rs 65.65 (Annexure 44). The difference between lowest bidder and the market rate is Rs 21.75, while the difference between the second bidder and lowest bidder rate is only Rs 0.10, which clearly reiterates the bid collusion. 9.jpg The wholesale market price has been calculated based on the spot prices at https://www.mcxindia.com/market-data/spot-market-price. The market price per pouch has been calculated from this website plus the charges for transportation, packing charges, and GST. So this is the wholesale market price with profit for upto delivery at the TNCSC godown.

Note: Calculation of Whole sale Market Price on 26/07/2019 10.jpg The retail bill of 1 pouch (910 grams/ 1 litre) bought at Amudham Departmental store on 27/07/2019 for Rs 65.65 is attached in Annexure 44 The above example shows the huge loss in this one tender. The above table shows unjust enrichment of Rs 17.60 for 1 pouch of palmoil. For 4,68,00,000 pouches, the unjust enrichment to Christy group is Rs 82,36,80,000 in this 1 tender alone.

Here is another example. This table shows the prices at which each of them supply to the other. This is done for tender BS3-022555-2019 for procurement of 1,56,00,000 pouches of palmoil 11a.jpg 11b.jpg The proof of the above is also available with us and we are ready to show the investigating authorities as and when required. Similarly, in the tender BS3/011950/2018, STC has procured oil pouches from Christy Fried Gram Industries at Rs 85.50 per pouch and supplied it to TNCSC at Rs 86.10, while the market price during the same time is Rs. 75.57. (Annexure 47)
It is evident from the table above that the margin for the Public Enterprises is very less, while there is a huge margin for the select set of firms related to Christy Friedgram group. STC in their RTI reply has given that they only withhold 0.7% of the price (Annexure 42) It is important to note that the select set of firms related to Christy Friedgram group only participate in the tenders directly or through Public Enterprises, but the actual supply is sub-contracted to the same contractors who were supplying Oil to TNCSC before modification of tender conditions. If it was not for select set of firms related to Christy Friedgram group and this tender collusion, TNCSC would be purchasing the products directly from the sub-contractors at/below wholesale prices which is much much lower. The above table shows how the major portion of the unjust enrichment goes to Christy group while the sub-contractors and public sector enterprises withhold a very meager margin.

3 (i) Loss to Exchequer due to Palmoil:

It must be understood that this unjust enrichment of Christy group has created a huge loss for the exchequer which is explained below The difference in tender awarded price and wholesale market rate is tabulated below for a few tenders where we clearly have evidences. It could be seen how palmoil was procured at near wholesale market rate during pre Christy time and how it increased after Christy entered the fray. The order copies are attached in annexures. The wholesale market rate was calculated based on the rate on the date of tender opening as described in page 26 of this complaint. 12.jpg The above table is based on sample tenders for which we have clear evidences as attached in the annexure. Based on the information in the above table, the weighted average price difference between the Market price and Tender Awarded price in the above mentioned tenders (after change in conditions) is Rs 15.95 per pouch. Total Unjust Enrichment and Loss to Exchequer: The total pouches procured from Christy group directly/ indirectly through these tender illegalities is 56,56,00,000 pouches as explained in the table in page 21. Given an average loss of Rs 15.95 per pouch, the total loss to the exchequer is Rs 15.95 * 56,56,00,000 pouches = Rs 902,13,20,000 Overall, collusion and illegalities in the Tenders of Palmolein has resulted in an estimated loss of Rs 902.13 crores to the exchequer and most part of this resulted as unjust enrichment of Christy Friedgram related firms.

4. Recent Palmoil Tenders with relaxed Tender Conditions have provided clear evidences of unjust enrichments in the previous tenders:

As can be seen from the above set of evidences, palmoil pouches were bought at Rs 15 to Rs 20 more than the market rate. However, as explained earlier this is due to the lack of competition artificially created by changing tender conditions in 2017. After the new MD took over in TNCSC, we had sent a representation to him on 17/05/2021 and 18/05/2021 seeking relaxation in tender condition for tender BS3/016300/2021 (Annexure 50A) and other future tenders. We had explained how the past tenders were manipulated by Christy to unjustly enrich themselves. Tender conditions were relaxed by TNCSC immediately and this can be seen in Annexure 50B. This relaxed tender condition ensured for the first time since 2017 that other people apart from Christy were also able to participate. This competition brought down the prices quoted by Christy group significantly. The tender was opened on 1/6/2021 and as it can be seen in annexure 50C that Christy firms themselves quoted less than market rate inorder to win tenders. While the market price of palmoil pouch is around Rs 131 to Rs 134 per 1 litre pouch on 1/06/2021, Christy firms Rasi Nutri foods, Suvarnabhoomi enterprises and Natural food products quoted Rs 128 to win the tender. This shows how Christy firms has been cheating the exchequer and Government all these years in quoting and supplying palmoil at rates of Rs 15 per pouch more than market rate. Restricting competition through favourable tender conditions to Christy was the important modus operandi. Once this was cracked and fair competition was allowed, competition ensured fair prices and prevented big losses to the exchequer.

III. Corruption in Dhal Tenders

TNCSC procures various types of Dhal, including Yellow Lentil and Tur Dhal. Similar to the tender violations for procurement of Sugar and Palm Oil, there are severe tender violations for the procurement of various types of Dhal as well. We have explained the violations in Yellow Lentil tenders as an example.

1) Deliberate Alteration of Tender Conditions to Favour firms related to Christy Friedgram group

The tender conditions for procurement of Yellow Lentil have been drastically changed in 2015 to favour select set of firms related to Christy Friedgram group and exclude firms that were supplying Dhal to TNCSC for many years. The table below shows a comparison of the previous and modified tender conditions for three sample tenders. 13a.jpg 13b.jpg

Detailed analysis of the tender conditions shows the following points:

• Alteration of Prior Experience

o Modification from Dhal to pulses or food items:

Until 2014, the tender conditions required that the bidder should have supplied Dhal. However, since 2015, this was changed to any food products so as to facilitate the qualification of select set of firms related to Christy Friedgram group. The department cannot claim to have changed this tender condition to increase competition, and include other bidders, because the other tender condition modifications clearly limit the competition.

o Additional prior experience requirements have been added:

For example, in BS6/08870/2017 tender, the eligibility condition stated that at least one contract of value not less than 20 crores of pulses/ food items to Government departments/Government organizations in 3 financial years

• Drastic and Arbitrary Increase in Average Annual Turnover:

The turnover requirement has been increased from Rs. 3 crores in 2014 specifically for Dhal to Rs 40 crores in 2017 for similar sized procurement

• There was no Grading Capacity tender condition in 2014. The grading capacity requirement of 25% of tender quantity was added since 2015. The above facts indicate that tender conditions have been modified to favour the select set of firms related to Christy Friedgram group. It is shocking to note that for the most recent tender, BS6/28006/2019 dated 25/07/2019, the tender conditions were made more unreasonable, and the tender quantity was also arbitrarily increased (Annexure 54).

• Tender quantity is increased to 60,000 MT

• The bidder should have 15,000 MTs of pulses / food commodities in a single contract and three such contracts should have been executed in any of the last five financial years

• Bidders should have supplied not less than 50% of this tendered quantity of pulses / food commodities in any one of the last 3 financial years to any Government / Quasi Government / any Government institutions

• Minimum Offer Quantity was drastically increased to 60% of the tendered quantity.

• The Average Annual turnover requirement for the last three financial years was increased to Rs 80 cores.

Until 2014, the tenders conditions facilitated participation of even new/small-scale bidders. Bidders who did not meet the prior experience and turnover requirements can participate/qualify by giving paying an additional security deposit of 5% of the total value of the ordered quantity. However, such conditions were removed, which excludes the participation of small/new firms.

2) Deliberate Alteration of Product Specification and Acceptance of Product Not Matching Specification

Prior to 2015, these Canadian yellow Dhal tenders were floated for “Whole Husked” dhal. Since 2015, the product specification has been changed to “Split Husked” Canadian yellow Dhal. Bidders, including firms related to Christy Friedgram group, find that it is not feasible to supply split dhal of huge quantities as it’s a time taking, cumbersome and expensive process. Firms related to Christy Friedgram group bid for “Split husked” as per tender specifications while they actually supply “Whole Husked” only. This is a gross mismatch between the product specified in the tenders and the actual supply. In spite of this mismatch, TNCSC accepts the delivery of Whole husked Canadian yellow dhal instead of Split dhal from firms related to Christy Friedgram group alone due to tender collusive practices. Inspite of our complaint about this to Food Secretary and Government, the practise has continued. I have attached the photo of whole husked Canadian yellow dhal sample that is being given in ration shops inspite of the specification being split husked. (Annexure 55A)

3) Participation only by Select Set of Firms/Related Parties – Bid Collusion, Bid Rigging, and Nepotism

After tender conditions were modified, it is reliably learned that in most of the Dhal tenders, primarily only select set of firms related to Christy Friedgram group are able to qualify since 2015. Consequent to the modification of the tender conditions, the number of bidders qualifying for Dhal tenders also reduced. The below table shows bidders for sample tenders, before and after modification of tender conditions. 14a.jpg 14b.jpg

4) Decrease in Competition and Procurement at Abnormally High Prices

Once Christy group of firms alone participated due to change in tender conditions, these firms started quoting rates much higher than the market rate causing huge losses to the exchequer. Before change in tender conditions, it could be seen that competition in tenders ensured rates at or below wholesale market rates 15a.jpg 15b.jpg

*The market price mentioned are the wholesale market prices including profit that existed at the time of tender opening Approximately calculating all the tenders floated, Christy Friedgram group would have approximately supplied around 5,00,000 MTs of Dhal to TNCSC since 2015. Even on a very very conservative basis, the weighted average difference between the awarded rate to Christy group of firms and market rate is atleast Rs 15/ Kg. Therefore, the estimated loss to the ex-chequer for the supply of atleast 5 lakh metric tons of Dhal since 2015 is estimated as Rs 750 crores. Infact, recently, this gap between supply rate and market rate has increased to Rs 30 to Rs 50 per Kg resulting in massive losses to exchequer. A full investigation will reveal the actual quantum of losses which could be much more. In addition, it is known that firms related to Christy Friedgram group primarily procure the Dhal from the same firms who were earlier supplying Dhal to TNCSC before modification of the tender conditions, and then supplies the Dhal to TNCSC. Therefore, it is stated that the firms related to Christy Friedgram group are acting only as middleman and is the major beneficiary of this unjust enrichment.

5. Recent Dhal Tenders with Changed Tender Conditions have provided clear evidences of unjust enrichments in the previous tenders:

The recent Tur Dhal/Canadian yellow dhal tender floated for 20000 metric tonnes has clearly proved the Corruption done by Christy group of firms (Annexure 59A). The tender was opened on 5/5/2021 (Annexure 59B) and had Christy group alone bidding directly/ indirectly. Christy’s firm Rasi Nutri Foods, societies Kendriya Bhandar and NACOF participated that bid as proxy for Christy firms had quoted between Rs 143 to Rs 147 per Kg for Split husked Tur Dhal while the wholesale market rate remained less than Rs 100 per kg after profit (Annexure 59C). The retail rate itself was only Rs 106 as can be seen from the attached Amudham Bill (Annexure 59D). After we wrote about this overpriced tender to the Chief Minister and new MD of TNCSC, the tender was cancelled. A new tender was floated and conditions were relaxed after our representation to allow competition of bidders (Annexure 59E). The new Tur Dhal/ Canadian Yellow Dhal Tender ended on 26/05/2021 and was opened on 01/06/2021. It must be noted that during this interval of 20 days between first and second tender, there was no big increase or decrease in market price of Tur dhal or Canadian yellow dhal. However, due to relaxed tender conditions 11 bidders participated in the bid. Christy’s firm Rasi Nutri Foods that quoted Rs 146.5 per Kg for Tur Dhal 20 days back quoted Rs 87 per Kg for Tur Dhal this time (Annexure 59F). Rasi Nutri Foods that quoted Rs 142 per Kg for Canadian yellow dhal 20 days back quoted Rs 78 per Kg (Annexure 59G). This by their own account is an admission of how much they have been overpricing per Kg of Dhal and is a direct evidence of Corruption. The difference of Rs 60 per Kg for 20000 metric tonnes itself would be Rs 120 Crores which has been saved by the cancellation of the tender. Therefore, this stands as a clear proof that Christy’s firms have been overpricing and looting the exchequer with the help of previous MD Sudha Devi IAS and other public servants in the past. This is enough proof of how restricting competition in the previous tenders between 2015 to 2021 has resulted in massive Corruption of public funds.

Overall, the collusion through change in Tender conditions and corruption in Tenders of Dhal has resulted in a loss to the exchequer of almost Rs 750 crores and most part of this loss resulted as unjust enrichment of Christy Friedgram related firms.

IV: Corruption in Tenders of Hulling of Dhal

The favouritism to firms related to Christy Friedgram group is also clearly visible in the tender (BS6/36196/2018 dated 02.11.2018) floated for hulling of Whole, Un-husked dhal of 1,00,000 MT (Annexure 60). The tender conditions have been made very stringent to restrict the participation of bidders, and the conversion rates awarded were way over and above the practise of TNCSC.

1. Stringent Tender Conditions to Exclude Bidders:

The previous tenders floated for conversion of Dhal was in 2009

• In these tenders, the eligibility criteria were very basic, such as payment of EMD, VAT/CST registration, submission of miller details, income tax clearance certificate, and milling capacity.

• The millers were required to lift the Un-husked Dhal from the TNCSC godown or GOI PSU storage points. And then deliver the converted Dhal at TNCSC godowns. They were provided with 50kg gunny bags by TNCSC.

• Packing, Storage, Loading, Transportation, and Weighment charges were borne by the millers. Only unloading charges of Dhal at TNCSC godowns were borne by TNCSC.

In BS6/36196/2018, the tender conditions included:

• Bidder should have at least three years of experience in processing / milling of Dhal

• Bidder should have processes and supplied atleast an average of 10% of the monthly tendered quantity of 20,000 MTs per month in each of the completed three financial years

• Average annual turnover of Rs 27 crores in the last three financial years

• Minimum offered quantity shall not be less than 60%

• Miller should have a processing / milling capacity of at least 50% of the tendered quantity for supply of Dhal.
These tenders conditions are very stringent, and due to this only two related parties of Christy Friedgram group namely Fair Deal Food Ventures Private Limited and Arogya Enterprises Limited qualified for the BS6/36196/2018 tender (Annexure 61).

2. Additional Charges Paid Leading to Unjust Enrichment of firms related to Christy Friedgram group

In this tender BS6/36196/2018, the millers were paid exorbitant rates for Processing/Milling charges, transportation charges, handling charges and packing charges. Among this, only part of the transport charges and packing charges are acceptable as the Tur needs to be lifted from different cities, and the miller has to purchase the gunny bags. However, the other charges being paid are only because of favouritism to select set of firms related to Christy Friedgram group. It has been a general practise of hulling tenders that no cost or very minimal cost is paid for the milling and handling charges since the millers get their profit from the residue after conversion. For example, for Tur Dhal the conversion out turn expected in tender is 68% and generally the excess outturn and the residue left are the main revenue for the contractors in previous tenders of TNCSC and also tenders being floated in other State Governments. It is reliably learnt that in the 2009 tenders of TNCSC which is the previous tender for hulling, no charges were paid for the conversion of Tur conversion. The by-products of conversion was the remuneration for the millers then.

However, in this Tender BS6/36196/2018, the tender conditions were set to enable only Christy group of firms to participate and they were paid the following charges.

• Milling Charges – Rs 9,500 per MT

• Transportation Charges – Rs. 4,000 per MT

• Handling Charges - Rs. 500 per MT

• Packing Charges – Rs.1,000 per MT

Total of Rs 15000 per metric ton were paid to Christy Friedgram related firms for hulling. However, at market rates, not more than Rs 5000 per metric tons should have been paid for the above hulling charges. It is reliably learnt that a total outurn of around 1,20,000 metric tons of Tur dhal has been supplied after outturn of 68% hulling and therefore, the estimated loss to the exchequer in this hulling tender amounts to atleast Rs 120 crores (1,20,000 metric tons * Rs 10000 per Metric ton loss)

V: Violation of various laws and rules:

  1. Prevention of Corruption act: The above illegalities in Sugar, Palmoil and Dhal is a clear case of Corruption resulting in unjust enrichment of Christy group of firms under the Prevention of Corruption Act.
  2. Indian Penal Code Violations: The fraud, collusion, conspiracy of Christy group of firms along with public servants of TNCSC are clear case of illegalities under various sections of the IPC.
  3. Anticompetitive violations of TN Transparency in Tenders Act: Single Tender in the garb of Competition and anticompetitive behaviour through participation of related parties are violative of the TN Transparency in Tender Act 1998 and its rules 2000. Also the collusion in bids is in violation of prohibition of anticompetitive behaviour as per Tn Tenders Act and rules
  4. Violation of Minimum time for tenders: Sufficient time was not provided for submission of tenders, which is a violation of the section 20 of the TN Tender Transparency rules. For example, in the tender TNCSC/18-19/ET-27 for procurement of Sugar, the tender notification was published in the newspaper on 02.02.2019 and the tender closing date was 08.02.2019. This violation is happening across procurement of other products as well. Section 20 of the TN Tender Transparency rules, 2000 clearly states that a minimum of 30 days should be given between the tender invite notice and tender closing date for all tenders with value above Rs 2 crores. However, the minimum time window was violated. This is true for most tenders
  5. Violation of awarding bids at more than Market rate: It must be noted that Section 10 of TN Transparency in Tenders Act mandates the evaluation committee to compare the bid quoted with market rates. Also, there is power to reject speculative bids where rates are quoted abnormally high. However, the public servants violated these clauses while deciding on the tender.
  6. Violation of General Financial Rules of Procurement: Also General Financial rules 2017, Rule 155 says that

“ Purchase of goods by Purchase Committee. Purchase of goods costing above Rs. 25,000 (Rupees twenty five thousand only) and upto Rs.2,50,000/- (Rupees two lakh and fifty thousand only) on each occasion may be made on the recommendations of a duly constituted Local Purchase Committee consisting of three members of an appropriate level as decided by the Head of the Department. The committee will survey the market to ascertain the reasonableness of rate, quality and specifications and identify the appropriate supplier recommending placement of the purchase order, the members of the committee will jointly record a certificate as under. “Certified that we, members of the purchase committee are jointly and individually satisfied that the goods recommended for purchase are of the requisite specification and quality, priced at the prevailing market rate and the supplier recommended is reliable and competent to supply the goods in question, and it is not debarred by Department of Commerce or Ministry/ Department concerned.”

Clearly the prevailing market rates should have been taken into account. This has not been followed as well.

  1. Also rule 173 of General Financial rules 2017 states that xix) Rejection of all Bids is justified when a. effective competition is lacking. b. all Bids and Proposals are not substantially responsive to the requirements of the Procurement Documents. c. the Bids’/Proposals’ prices are substantially higher that the updated cost estimate or available budget; or d. none of the technical Proposals meets the minimum technical qualifying score. (xx) Lack of competition in rule 173(xix) shall not be determined solely on the basis of the number of Bidders. Even when only one Bid is submitted, the process may be considered valid provided following conditions are satisfied: a. the procurement was satisfactorily advertised and sufficient time was given for submission of bids. b. the qualification criteria were not unduly restrictive; and c. prices are reasonable in comparison to market values (xxi) When a limited or open tender results in only one effective offer, it shall be treated as a single tender contract. However, this has also been clearly violated

7.Violation of Code of Integrity:

Code of Integirty of Rule 175 of General Financial Rules 2017 states that No official of a procuring entity or a bidder shall act in contravention of the codes which includes (i) prohibition of (a) making offer, solicitation or acceptance of bribe, reward or gift or any material benefit, either directly or indirectly, in exchange for an unfair advantage in the procurement process or to otherwise influence the procurement process. (b) any omission, or misrepresentation that may mislead or attempt to mislead so that financial or other benefit may be obtained or an obligation avoided. (c) any collusion, bid rigging or anticompetitive behavior that may impair the transparency, fairness and the progress of the procurement process. (d) improper use of information provided by the procuring entity to the bidder with an intent to gain unfair advantage in the procurement process or for personal gain. (e) any financial or business transactions between the bidder and any official of the procuring entity related to tender or execution process of contract; which can affect the decision of the procuring entity directly or indirectly. (f) any coercion or any threat to impair or harm, directly or indirectly, any party or its property to influence the procurement process. (g) obstruction of any investigation or auditing of a procurement process. (h) making false declaration or providing false information for participation in a tender process or to secure a contract; (ii) disclosure of conflict of interest. (iii) Disclosure by the bidder of any previous transgressions made in respect of the provisions of sub-clause (i) with any entity in any country during the last three years or of being debarred by any other procuring entity.

8. Violation of STC’s tender rules:

Christy Friedgram has also violated rules of State Trading Corporation in these tenders. Notice for inviting trade margin quotes from EOI Empanelled parties for public sector enterprise STC clearly mentions that “The shortlisted backup supplier should submit an undertaking that in the subject tender they shall be exclusively participating only through STC and will not directly or through any other company participate in the said tender. If the same is found so, at a later date the said supplier will be debarred for further tender participation through STC under intimation to all state and central government department”. (Annexure 43)

9. Violation of Kendriya Bhandar’s procurement policy:

Apart from this, the collusion by Christy group and officials of Kendriya Bhandar is also violative of eligibility criteria of Kendriya Bhandar’s purchase policy (Annexure 62) and Clause 1 of indemnity bond for empanelled suppliers (Annexure 63). The eligibility criteria attached in Annexure 62 clearly shows that firms who are doing only commission sales are not eligible. Also, sister firms having common proprietor/ partner are not eligible. However, Christy firms have been allowed to supply to Kendriya Bhandar violating these clauses as well.

10. Fake Billing:

Fake bills, GST records, and Income Tax records of Christy Friedgram Pvt Ltd, Suvarnabhoomi Enterprises Private Limited, Fair Deal Food Ventures Private Limited, Rasi Nutri Foods, Natural Food Products, and Arogya Enterprises Limited. A comparison of GST and Income tax needs to be carried out. Also, it must be noted that Christy group’s margin and the loss to the exchequer estimated in this complaint is also the profit made by these companies as they have almost negligible expenses in actual to carry out these operations. However, all these companies have shown lot of expenses in their balance sheet and minimal profit. Therefore a thorough investigation for fake bills needs to be done.

11. Violating Tenders act by giving orders without tenders:

TNCSC follows a regular practice of procuring an additional 25% over the tender quantity over the recent years. Procurement upto 25% over tender value is allowed as per TN Tender Transparency Act in exceptional cases. However, following this for most of the tenders as a regular practice in most tenders indicates that this has also been done for favouring firms related to Christy Friedgram group avoiding the tender process altogether.

VI: Other Tenders to be investigated:

It is learnt that Transportation tenders of TNCSC to transport the products between the TNCSC Godowns for the next 5 years has been won by Christy related firms as well and requires investigation. It is said that while previously the rate for 0 to 5 Kms was given at Rs 150, it is said that this has been drastically increased to Rs 900 and has been given to Christy friedgram group. While they don’t own lorry/ transport, it is learnt that the same modus operandi of using the earlier bidders as subcontractors is currently being practised in this as well. Therefore, this requires a thorough investigation as well Other companies/firms in which Thirumangalam Sengodan Kumarasamy is a Director/Partner should also be investigated for diversion of the unjust enrichment earned from the PDS tenders. Investigation should also cover all the beneficiaries of this unjust enrichment of Christy.

VII: Overall Loss to the Exchequer and Unjust Enrichment of Christy Group of Firms

Overall, the total loss to the exchequer and unjust enrichment of the Christy group of firms estimated in all the above tenders are presented below 16.jpg

The various violations, losses and Corruption mentioned in the complaint are based on information received and provides an approximate estimate of the losses to the exchequer and unjust enrichment to Christy group in the TNCSC tenders. However, a thorough investigation is required to determine the exact quantum of the losses to the ex-chequer which could be much more.
Therefore, across various products, TNCSC has altered tender conditions to favour firms related to Christy Friedgram group, products have been procured at very high prices when compared to the market rate, and various other collusive practices. The change in tender conditions are arbitrary and malafide to decrease competition and unjustly enrich Christy group of firms. Corruption is the biggest malice of our society. It has not only created a heavy loss to the exchequer but has also denied the rights of basic services for lakhs of underprivileged people of TamilNadu. Rigged tenders is also the biggest source of black money in our country. The black money and its economy today is threatening our democratic process and is the biggest challenge to free and fair elections.

VIII: People responsible for the scam:

Sudha Devi IAS, other Managing Directors between 2015 to 2021:

The Managing Director of TNCSC is the Tender Inviting Authority and is directly liable for this massive Corruption. The Managing Directors during the time of 2015 to 2021 including Sudha Devi IAS, K. Gopal IAS, Ka.Balachandran IAS, Chandrasekaran IAS and others needs to be investigated. It is said that when the Income Tax raided Sudha Devi IAS in 2018, incriminating documents were seized from her house. Therefore, DVAC should also access a copy of the documents seized by Income Tax

Sub Committee Members:

The sub committee consisting of MD of TNCSC, Commissioner- Civil Supplies & Consumer Protection Department and Deputy Secretary – Finance of the Finance Department is the committee that negotiates and finalizes the rate for awarding tender. They were also primarily responsible for changing the tender conditions inspite of knowing that this will reduce competition. Therefore, the role of all the subcommittee members who were responsible for change in tender conditions and responsible for approving supply rates way above market rates needs to be investigated.

Ex Minister of Food - Kamaraj:

Ex Minister of Food Kamaraj was not only the Minister but also the Chairman of the Board of TNCSC. Therefore, all the above tenders are approved by the Board Chairman and he is also directly liable for the Corruption. It needs to be probed if he or his relatives accumulated assets disproportionate to their income through this Corruption.

Other officials of TNCSC:

The other officials of the TNCSC such as General Manager (Business) and other officials who are part of the Tender committees and quality committees are also directly liable for the fraud and Corruption.

T.S.Kumarasamy and other Directors of Christy group:

The main beneficiary of this unjust enrichment is Christy group of companies. The Corruption is of unimaginable scale and T.S.Kumarasamy of Christy group is the main architect of this. He has also been raided by Income Tax and many incriminating documents have been seized from his place. Such documents needs to be collected from Income Tax as part of the investigation.

Officials of MMTC, STC, Kendriya Bhandar and NACOF: Officials of MMTC, STC, Kendriya Bhandar and NACOF responsible for tenders that acted as proxy bidders for Christy group inorder to fraudulently and artificially show that there is competition in tenders violating their own procurement policies and various laws should also be booked.

FIR needs to be booked on all the above and investigated thoroughly. After filing of FIR, the Investigating agency in the course of investigation should also call for records including buy back agreements, bills and invoices from Public sector Enterprises, Christy group and the subcontractors of Christy who were participating before and after the change in tender conditions and investigate them thoroughly.

We would also like to disclose that a complaint was also given to the CBI on 28/12/2019 covering most of this. CBI has not proceeded so far. Since most of the Corruption happened in TamilNadu Civil Supplies Corporation with active collusion of many state Government officials, I request the DVAC to act immediately. My earlier complaint to CBI doesn’t preclude the DVAC to take action on this complaint by law.

Our complaint along with the annexures containing all the necessary evidences clearly establishes the appearance of Cognizable offence under Prevention of Corruption act and various other laws.

I pray the DVAC to immediately register a FIR on ex Minister Kamaraj, Managing Director of TNCSC Ms Sudha Devi IAS and others, public servants of TamilNadu Civil Supplies Corporation, officials of MMTC, STC, Kendriya Bhandar, NACOF and key functionaries of Christy related firms including T.S.Kumarasamy and investigate and prosecute all those involved under Prevention of Corruption Act, IPC and other relevant acts. Money lost by the exchequer shall also be recovered from these firms.

Sincerely Jayaram Venkatesan, Convener – Arappor Iyakkam (Ph: 9841894700) Enclosures: Annexure 1 to Annexure 63 - Page 1 to Page 190 Link - https://bit.ly/2028CrRationScamAnnexure

தமிழில்:

ரூ 2028 கோடி ரேஷன் ஊழல் குறித்து அறப்போர் இயக்கம் லஞ்ச ஒழிப்பு துறையில் புகார்

தமிழ்நாடு சிவில் சப்ளைஸ் கார்ப்பரேஷனில் (TNCSC) ரேஷன் கடைகள் பொருட்களான சர்க்கரை, பாமாயில் மற்றும் பருப்பு கொள்முதலில் கிட்டத்தட்ட ரூ 2028 கோடி ஊழல் நடந்துள்ளது குறித்து ஆதாரங்களுடன் அறப்போர் இயக்கம் லஞ்ச ஒழிப்பு துறையான ஊழல் தடுப்பு மற்றும் கண்காணிப்பகத்திற்கு புகார் அளித்துள்ளது. இதற்கு இந்த துறை அமைச்சர் காமராஜ், முன்னாள் இயக்குநர்கள் சுதா தேவி IAS உள்ளிட்ட பொது ஊழியர்கள் மீதும் குமாரசாமியின் கிறிஸ்டி சம்பந்தப்பட்ட நிறுவனங்கள் மீதும் பொதுத்துறை நிறுவனங்களான MMTC, STC, கேந்திரிய பண்டரின் ஊழியர்களின் மீதும் ஊழல் தடுப்பு சட்டங்களின் கீழ் நடவடிக்கை எடுக்க கோரியுள்ளோம். உடனடியாக இவர்கள் மீது முதல் தகவல் அறிக்கை பதிவு செய்து விசாரணை நடந்த வேண்டும்.

  1. கடந்த 6 ஆண்டுகளில் கிறிஸ்டி ஃப்ரைட்கிராம் சம்பந்தப்பட்ட நிறுவனங்கள் மட்டுமே பங்கு பெறும் வண்ணமும் இத்தனை வருடங்கள் ரேஷன் துறையான TNCSC ற்கு ரேஷன் பொருட்களை விநியோகம் செய்து வந்த நிறுவனங்கள் பங்கெடுக்க முடியாத வண்ணமும், டெண்டரில் பங்கெடுப்பதற்கான தகுதி விதிகள், சர்க்கரையில் 2019 லும் பாமாயிலில் 2017 லும் பருப்பில் 2015 லும் மாற்றப்பட்டன.
  2. கிறிஸ்டி ஃப்ரைட்கிராம் சம்பந்தப்பட்ட நிறுவனங்கள் மற்றும் கிறிஸ்டி போர்வையில் பொதுத்துறை நிறுவனங்கள் மட்டுமே பங்கு பெறச்செய்து, அதுவரை சப்ளை செய்த நிறுவனங்கள் பங்குபெற முடியாத வகையில் நிதி தகுதி(turnover), அனுபவம் போன்றவை மாற்றப்பட்டு, டெண்டர் சட்டத்தின் முக்கிய இலக்கான ஆரோக்கியமான போட்டி இல்லாமல் செய்யப்பட்டது. மேலும் பொதுத்துறை நிறுவனங்களான MMTC, STC, கேந்திரிய பண்டர் கிரிஸ்டி சம்பந்தப்பட்ட நிறுவனங்களின் முகமாகவே இதில் பங்கெடுத்தனர். அவர்கள் இப்பொருட்களை மீண்டும் கிறிஸ்டி சம்பந்தப்பட்ட நிறுவனங்களே சப்ளை செய்ய கொடுத்தனர்.
  3. மிக முக்கியமாக, கிறிஸ்டி ஃப்ரைட்கிராம் சம்பந்தப்பட்ட நிறுவனங்கள் பங்கெடுக்கும் முன் வரை மற்ற நிறுவனங்களிடம் இருந்து கிட்டத்தட்ட சந்தை மதிப்பிற்கு பொருட்கள் வாங்கப்பட்டது. ஆனால் கிறிஸ்டி ஃப்ரைட்கிராம் சம்பந்தப்பட்ட நிறுவனங்கள் பங்கெடுத்து டெண்டர்கள் எடுக்க ஆரம்பித்ததில் இருந்து சந்தை மதிப்பை விட மிகவும் அதிக விலை கொடுத்து சர்க்கரை, பாமாயில் மற்றும் பருப்பு வாங்கப்பட்டது. இதனால் மிகப்பெரிய அளவில் நமது வரிப்பண இழப்பும், இதனால் கிறிஸ்டி ஃப்ரைட்கிராம் சம்பந்தப்பட்ட நிறுவனங்கள் சட்ட விரோதமாக பெரும் லாபத்தையும் ஈட்டினர்.
  4. கிறிஸ்டி ஃப்ரைட்கிராம் சம்பந்தப்பட்ட நிறுவனங்கள் இந்த பொருட்கள் சப்ளை செய்யவில்லை. அவர்கள் அந்த வேலையை ஏற்கனவே போட்டி போட்டுக்கொண்டிருந்த நிறுவனங்களுக்கு சந்தை விலைக்கு கொடுத்து விட்டனர். Godown வரை அவர்கள் தான் போய் இறக்குகிறார்கள். கிறிஸ்டி ஃப்ரைட்கிராம் சம்பந்தப்பட்ட நிறுவனங்கள் வெறும் பில் போடும் வேலையை மட்டும் செய்து, கிலோவிற்கு ரூ 10 முதல் 30 வரை ஊழல் செய்துள்ளார்கள்.
  5. உதாரணத்திற்கு கனடியன் மஞ்சள் பருப்பு / துவரம் பருப்பு டெண்டர்களில் டெண்டர் விதிகள் 2014 மற்றும் 2015ல் கிறிஸ்டி நிறுவன சார்பில் மாற்றியது ரேஷன் துறை. 20000 மெட்ரிக் டன் கனடியன் மஞ்சள் பருப்பு கொள்முதல் விதிகளில் கிறிஸ்டி நிறுவனத்தை உள்ளே கொண்டுவருவதற்காக பருப்பு சப்ளை செய்த அனுபவம் வேண்டும் என்பதை மாற்றி ஏதாவது ஒரு உணவு பொருள் சப்ளை செய்த அனுபவம் இருந்தால் போதுமானது என்று மாற்றப்பட்டது. இதன் மூலம் முட்டை சப்ளை அனுபவம் இருந்த கிறிஸ்டியை உள்ளே கொண்டு வர வழிவகை செய்தனர். மேலும் அதுவரை பத்திற்கும் மேற்பட்ட பருப்பு மில் மற்றும் வியாபாரிகள் பங்கெடுத்து வந்தனர். ஆனால் turnover ஐ 3 கோடியில் இருந்து 40 கோடியாக மாற்றினர். மேலும் ஒரே ஒப்பந்தத்தில் 20 கோடி உணவு பொருள் சப்ளை செய்த அனுபவம் வேண்டும் என்று மாற்றினர். இந்த மாற்றங்கள் மூலம் அதுவரை போட்டி போட்டுக்கொண்டு இருந்த அனைத்து பருப்பு மில் மற்றும் வியாபாரிகளை பங்கு பெற முடியாத படி செய்தார்கள். அதுவரை சந்தை மதிப்பிற்கு கொள்முதல் செய்த ரேஷன் துறை சந்தை மதிப்பை விட ரூ 10 முதல் 30 வரை கிலோவிற்கு அதிகமாக கிறிஸ்டி நிறுவனமிடமிருந்து கொள்முதல் செய்தார்கள். இதே போல் பாமாயில் டெண்டரில் 2017லும் சர்க்கரை டெண்டரில் 2019லும் டெண்டர் விதிகளை மாற்றி கிறிஸ்டி நிறுவனங்களை மட்டும் போட்டி போடும் வண்ணம் மாற்றியது ரேஷன் துறை.
  6. மே 5, 2021 முடிவடைந்த பருப்பு டெண்டரில் கிறிஸ்டி குழுவினர் மட்டும் நேரடியாகவும் மறைமுகமாகவும் பங்கு எடுத்து ஒரு கிலோ துவரம் பருப்பு ரூபாய் 143 முதல் 147 வரை ஒப்பந்தப்புள்ளி தந்தார்கள். அதேபோல் ஒரு கிலோ கனடா மஞ்சள் பருப்பிற்கு ரூபாய் 139 முதல் 145 வரை ஒப்பந்தப்புள்ளி கொடுத்தார்கள். ஆனால் இரண்டின் சந்தை மதிப்பும் ரூபாய் 100 விட குறைவு. இந்த ஆதாரங்களை வெளிக்கொண்டு வந்த பிறகு புதிதாக பதவியேற்ற தமிழக அரசு கிறிஸ்டி நிறுவனங்களுக்கு அதிக விலைக்கு கொடுக்கப்பட்ட டெண்டர் ஒப்பந்தத்தை ரத்து செய்துவிட்டு மீண்டும் புது டெண்டர் போட்டனர். ஆனால் இந்த முறை நாம் கேட்டுக்கொண்டபடி பல விதிகளை பழையபடி தளர்த்தினார்கள். கிறிஸ்டி நிறுவனங்களைத் தவிர மற்றவர்களும் பங்கு பெற வழிவகை செய்த உடனேயே இந்த ஒப்பந்தத்தில் 11 பேர் பங்கெடுத்து பலரும் 100 ரூபாய்க்கு குறைவாக ஒப்பந்தப்புள்ளி தந்தனர். கிறிஸ்டியன் ராசி நிறுவனம் ரத்தான ஒப்பந்தத்திலும் புது ஒப்பந்தத்திலும் பங்கெடுத்தது. மே 5 இந்த நிறுவனம் ஒரு கிலோ துவரம் பருப்பு விலை 146.5 ரூபாய் என்று ஒப்பந்தப்புள்ளி கொடுத்தது. ஆனால் அதே நிறுவனம் இருபதே நாட்களில் மே 26 அன்று 87 ரூபாய் என்று ஒப்பந்தப்புள்ளி கொடுத்தது. இந்த இடைப்பட்ட காலத்தில் சந்தை மதிப்பில் எந்த பெரிய மாற்றமும் இல்லை. அதேபோல் கனடா மஞ்சள் பருப்புக்கு மே 5 142 ரூபாய் ஒப்பந்தப்புள்ளி கொடுத்த ராசி நிறுவனம் தற்பொழுது மே 26 அன்று ஒரு கிலோ 78 ரூபாய் என்று ஒப்பந்தப்புள்ளி கொடுத்துள்ளது. அவர்களே ஆவண ரீதியாக இத்தனை நாட்களாக ஒரு கிலோவிற்கு எத்தனை ரூபாய் கொள்ளை அடித்துக் கொண்டிருந்தார்கள் என்பதை பதிவு செய்துள்ளார்கள். இந்த ஆதாரங்களையும் மேலும் மற்றவர்களை போட்டிபோடா வண்ணம் வைப்பதன் மூலமாக எப்படி விலை அதிகமாக பெற்று கிறிஸ்டி நிறுவனம் அரசையும் மக்களையும் ஏமாற்றினார்கள் என்பதன் ஆதரங்களையும் புகாருடன் இணைத்துள்ளோம்.
  7. அறப்போர் இயக்கம் இந்த புகாரில் சர்க்கரை பாமாயில் பருப்பு ஒப்பந்த ஆவணங்களை விலாவாரியாக ஆய்வு செய்து அதை ஆதாரங்களாக இணைத்துள்ளோம். மேலும் கொள்முதல் விலையை அன்றைய சந்தை மதிப்புடன் ஒப்பிட்டு எப்படி சந்தை மதிப்பைவிட மிக அதிகமாக விலை கிறிஸ்டியின் நிறுவனங்களுக்கு கொடுக்கப்பட்டுள்ளது என்பதற்கான ஆதாரங்களையும் புகாரில் இணைத்துள்ளோம். சந்தை மதிப்பிற்கான ஆதாரங்களையும் இணைத்துள்ளோம். மேலும் கிறிஸ்டி நிறுவனம் மட்டும் பங்கு பெறும் வகையில் டெண்டர் ஆவணங்கள் எப்படி மாற்றப்பட்டது என்பதற்கான ஆவணங்களையும் புகாரில் இணைத்துள்ளோம். மேலும் எம் எம் டி சி, எஸ் டி சி போன்ற பொதுத்துறை நிறுவனங்கள் போர்வையில் கிறிஸ்டி எப்படி இந்த டெண்டர்களில் போட்டி போட்டது என்பதற்கான ஆவணங்களையும் புகாரில் இணைத்துள்ளோம். இவை அனைத்தும் பொது ஆவணங்கள் மற்றும் தகவல் பெறும் உரிமைச் சட்டம் மூலமாக பெறப்பட்ட ஆவணங்கள். விசாரிக்கப்பட வேண்டிய பொது ஊழியர்கள் பட்டியல் மற்றும் அவர்கள் எப்படி இந்த கூட்டு சதியில் ஈடுபட்டார்கள் என்பதையும் புகாரில் வைத்துள்ளோம்
  8. பாமாயில் டெண்டர்களில் கடந்த 4 ஆண்டுகளில் கிறிஸ்டி குழு நிறுவனங்களிடம் வாங்கிய 56..56 கோடி பாக்கெட்டுகளில் அரசாங்கத்திற்கு ஏற்பட்டிருக்கக்கூடிய இழப்பின் மதிப்பு ரூ.902 கோடி. மேலும், பருப்பு டெண்டர்களில், கடந்த 6 ஆண்டுகளில் கிறிஸ்டி சம்பந்தப்பட்ட நிறுவனங்களிடமிருந்து கொள்முதல் செய்யப்பட 6 லட்சம் டன் பருப்பு வகைகளில் ஏற்பட்ட இழப்பு ரூ.870 கோடி.மேலும் சர்க்கரையில் கிறிஸ்டியிடம் கொள்முதல் செய்த 2.7 லட்சம் சர்க்கரையில் ஏற்பட்ட இழப்பு ரூ 256 கோடி. குறைந்த பட்சமாக கிறிஸ்டி நிறுவன ஊழலால் மட்டும் தமிழக அரசு இழந்த பணம் ரூ 2028 கோடி
  9. உடனடியாக லஞ்ச ஒழிப்பு துறை FIR பதிவு செய்து துறை அமைச்சர் காமராஜ், இயக்குநர் சுதா தேவி IAS உள்ளிட்ட பொது ஊழியர்கள் மீதும் கிறிஸ்டி சம்பந்தப்பட்ட நிறுவனங்கள் மீதும் மத்திய அரசின் பொதுத்துறை நிறுவனங்களான MMTC, STC, கேந்திரிய பண்டரின் ஊழியர்களின் மீதும் ஊழல் தடுப்பு சட்டங்களின் கீழ் நடவடிக்கை எடுக்க வேண்டும். உடனடியாக இவர்கள் கைது செய்யப்பட்டு விசாரணை செய்யப்பட வேண்டும். இயக்குநர் சுதா தேவி IAS மற்றும் சம்பந்தப்பட்ட பொது ஊழியர்கள் இடைக்கால பணி நீக்கம் செய்யப்பட வேண்டும். மேலும் தமிழக அரசு உடனடியாக கிறிஸ்டி குழு நிறுவனங்களை கருப்பு பட்டியலில் வைக்க வேண்டும். மேலும் இழந்த பணத்தை உடனடியாக மீட்க வேண்டும்.