KSDL involved in another Rs. 20 crore scam: Government documents

KSDL involved in another Rs. 20 crore scam: Government documents

Mar 08, 2023, 03:07 pm
3 min read

KSDL involved in another Rs. 20 crore scam: Government documents
The scam-hit KSDL has been found to be involved in yet another scam of Rs. 20 crore, as per government documents

Scam-hit Karnataka Soaps and Detergents Limited (KSDL) has been found to be involved in yet another scam of Rs. 20 crore.

Government documents revealed financial irregularities relating to the firm’s procurement of substandard raw materials for its products, including the famous Mysore Sandal Soap.

Karnataka’s Principal Secretary of the Commerce and Industry Department wrote to KSDL’s managing director on February 28 in this regard.

Why does this story matter?

  • The KSDL is a public enterprise owned by the Karnataka government.
  • Last week, BJP MLA from Channagiri, Madal Virupakshappa resigned as KSDL’s chairman owing to corruption charges.
  • The KSDL Employees Union accused the purchase committee of misappropriating funds to the tune of Rs. 300 crore.
  • The revelations could hurt the incumbent BJP as the Karnataka Assembly polls are slated to be held before May.

Investigation team formed in 2020 recommended action against officials

According to KSDL sources, the scam began in 2020, and an investigation team was formed accordingly. The probe revealed that at least four high-ranking KSDL officials received their positions based on degrees from an unrecognized university.

Following this, the investigation team recommended action against the individuals, and the Lokayukta also recommended recovering the embezzled money from the officials under investigation.

KSDL failed to submit any report to the government

The Karnataka government then asked the KSDL to submit a report on action taken against the officials in May 2021. The KSDL, however, neither informed the government of the action taken on Lokayukta’s recommendation nor submitted the report regarding action on the investigation team’s findings.

KSDL officials allowed private group-run hotel on its land

In a letter to KSDL’s MD, the government said the company signed an agreement allowing the Karnataka Milk Federation to use 1,450 square feet of land on its campus.

However, the officials colluded to allow a private organization to run a hotel on 3,000 square feet of land.

A purchase scam of Rs. 4.63 crore by KSDL had also come to light in 2014.

Lokayukta caught Virupakshappa’s son taking Rs. 40 lakh bribe

Last week, Lokayukta officials caught Virupakshappa’s son Prashanth Kumar MV accepting a bribe of Rs. 40 lakh from a contractor at the KSDL office, allegedly on Virupakshappa’s behalf.

Following this, officials raided his family residence and seized Rs. 8.23 crore cash, huge quantity of gold and silver jewelry, and property documents relating to large investments in land.

Virupakshappa resigned from KSDL a day later.

Virupakshappa cleared inflated tenders and purchase orders

Notably, Prashanth is an official of the Karnataka Administrative Services and the chief accounts officer of the Bangalore Water Supply and Sewerage Board.

Virupakshappa maintains that the case is a conspiracy against him and his family members.

The employees’ union claimed that Virupakshappa cleared inflated tenders and purchase orders to make money before the election while embezzling the company’s Corporate Social Responsibility (CSR) funds.

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