CID (crime) officials arrested the chairman and managing director of the scam-hit Aatash Norcontrol Pvt Ltd, Jinofur Bhujwala, and four other persons including a senior government official, in connection with a fraud that has caused a loss of Rs 134 crore to the exchequer.
The arrests were made following a complaint by the state maritime regulator, Gujarat Maritime Board (GMB), which had awarded a contract to Ahmedabad-based Aatash Norcontrol in 2007. The company is a joint venture between the Bhujwala-controlled Aatash Group, which has a 51% equity stake, and Norway’s Kongsberg Maritime.
“If the project was allowed to continue for its full term, it would have cost GMB Rs 4,972 crore,” a senior CID (crime) official said.
Aatash Norcontrol had allegedly set up shell companies to round-trip money, producing fake project reports and fake invoices and inflating investment figures to pocket a larger share of revenue from the project, CID (crime) sources said.
In 2018, the Comptroller and Auditor General of India (CAG) pointed out that Aatash Norcontrol had earned an exorbitant sum from the project, much higher than what it was contractually entitled to under the concession agreement with GMB.
The CAG also issued an ‘audit-para’ in this regard with its initial findings showing the additional income of at least Rs 134 crore was pocketed by Aatash Norcontrol. The company failed to deposit the excess income it earned despite repeated notices from GMB.
An FIR has been lodged at CID (crime), Gandhinagar zone, in which eight persons, including retired GMB chief nautical officer S C Mathur, and Chetan Dalwadi of Aatash Norcontrol, both absconding, have been named as accused, a CID (crime) official said.
“Jinofer Bhujwala, his son Zubin Bhujwala, residents of the Sola area of Ahmedabad, along with a Bapunagar-based couple, Sudarshan and Rekha Sharma, and superintending engineer (mechanical) Harshad Rajpal, were arrested in the case,” a CID (crime) official said. Jinofer’s daughter Nazneen has not been arrested as she has a two-month-old child.
The accused were charged under IPC Sections 406 (criminal breach of trust), 409 (criminal breach of trust by public servant, or by banker, merchant or agent), 420 (cheating), 465 (punishment for forgery), 468 (forgery for purpose of cheating), 471 (using as genuine a forged document) and 120B (criminal conspiracy) along with sections of the Prevention of Corruption Act, 1988.
GMB had awarded a long-term Vessels Traffic and Ports Management System (VTPMS) contract for the Gulf of Khambhat on Build-Operate-Own-Transfer (BOOT) basis to Aatash Norcontrol. The project became operational in August 2010.
According to the concession agreement with GMB, against an investment of Rs 100 crore, Aatash Norcontrol would be entitled to get 15% return on equity. In case the project cost was less than Rs 100 crore, then the Vehicle Traffic System (VTS) fees would be reduced. However, if the project cost was higher than Rs 100 crore, Aatash Norcontrol would have to pay only 20% of the VTS fees collected to GMB, while it could keep 80%.
“In its attempt to garner more income, the company produced eight fake invoices of Rs 16.31 crore and diverted funds to shell companies,” according to details in the complaint.
CID arrests 5, files FIR against 8 in 134 cr GMB scam
