HC orders company directors' arrest in iron certificate scam
In a scam amounting to approx Rs 10 crore, directors of Hira Steel Ltd managed to bribe an official to forge 1,040 documents in order to sell inferior quality iron at a higher price to a Chinese buyer
The Bombay High Court has directed the MRA Marg police to arrest the director and some officers of the Raipur-based company Hira Steel Limited (HSL) for their alleged involvement in a fake iron ore certificate scam.
On November 23, the Bombay High Court directed the MRA Marg police to probe into the fake iron ore certificate scam and has given 72 hours to the directors of HSL before their arrest. “The honorable High Court has ordered the arrest of the directors of HSL by giving them 72 hours advance notice,” said Shivaji Phadtare, investigating officer, MRA Marg police station.
Scam comes to light
The racket was unearthed when on May 14, the directors of Geo-Chem — the company supplying one of the test certificates — were informed that the Raipur police had raided their Goa office and were inquiring about their branch manager Jagannath Rao. The cops added that they had also registered a FIR against an iron ore exporter by the name of Prasanna V Ghotage and others. Later, Rao admitted that he had issued fake iron ore testing certificates.
Reacting to the arrest of their manager, Geo-Chem filed a complaint under Section 156 (3) before the Additional Chief Metropolitan Magistrate, 38th Court, Ballard Pier. Based on the court order, MRA Marg police registered an MECR against Rao and Ghotage.
When the police summoned the HSL directors for their statements, instead of helping the investigations, the HSL directors moved the High Court demanding that the MECR against them should be quashed. In reaction to that, the Geo-Chem’s lawyers put the entire matter before the court, wherein the court ordered the arrest of the directors of HSL. Digging into the scam, the police realised that HSL directors Jagdish Prasad Agrawal, Amit Agrawal, Ajay Ahluwalia and Pankaj Agrawal were also involved.
“We found that Ghotage had paid a bribe of Rs 5 lakh to Rao and HSL knew of the fake certificates. We also recovered 1,040 such fake certificates printed by Rao in his drawer,” said Pradip Palav, general manager, Geo-Chem.
According to Palav, HSL said that Ghotage had signed an agreement with them on May 7, 2011 to supply China with 1,10,000 metric tonnes of iron ore with 51 per cent iron content. However, Ghotage supplied only 41,253 metric tonnes of iron ore to HSL. In July 2011, prior to the cargo reaching China, the Chinese buyer sent an e-mail to Geo-Chem’s head office inquiring about the authenticity report.
At that moment, Geo-Chem immediately replied that the report was a fake, as the certificates did not have the hologram and a pre-printed identification number along with a disclaimer.
Later, when the Chinese buyer received the iron ore supply, it was revealed that the iron ore was of inferior quality only containing 41 per cent iron content.
After repeated attempts Pankaj Agrawal, one of the directors of HSL, remained unavailable for comment. Confirming the order, defence lawyer Filji Fredrix said, “Technically it is protection given by the High court to our clients. High Court has directed the MRA Marg police to issue notice to our clients, before placing them under arrest. “