The Dismissal of Rajiv Bhatia

Rajiv Bhatia, an alumnus of IIT Delhi (1994), was dismissed from his position at SAIL prematurely, which many consider an unprecedented move in the organization’s history. Bhatia, who had been a pivotal figure within SAIL, has publicly challenged the company's Chairman, Amrendru Prakash, to a one-on-one debate to discuss the circumstances surrounding his termination. This challenge has not only raised questions about internal governance but has also ignited discussions about accountability within public sector enterprises in India.

Allegations of Corruption & Mismanagement

In a recent article published by The Wire, Bhatia detailed numerous allegations of corruption and mismanagement within SAIL. He claims that the company has been plagued by financial irregularities, including questionable selling practices and favoritism in contract awards to traders disguising them to be construction projects at discounted prices. These allegations have led to increased scrutiny from regulatory bodies, including the Lokpal and the Central Vigilance Commission, which have initiated investigations into the company's operations. Bhatia's revelations have sparked public interest and concern regarding the governance framework of this major public sector undertaking.

Crux of the Matter

SAIL’s Central Marketing Organization, responsible for the pan-India sale of steel from all its plants, has a long-standing practice of entering Memoranda of Understanding with clients, ensuring buyers commit to annual steel purchases in return for Turnover Discounts upon fulfilment. According to a report by The Wire, such an MoU was executed between SAIL and Venkatesh Infra Projects Pvt Ltd for products like rebar and plates. However, Mr. Bhatia alleged that Venkatesh Infra was not an end-user but a trader who profiteered by reselling SAIL steel, especially when rebar from primary producers was scarce, thus earning undue gains and exploiting the TOD system.

Whistleblower Fallout & Official Complicity Unveiled

Whistleblower Rajiv Bhatia, a former SAIL marketing officer, first flagged irregularities internally before escalating the matter to the Prime Minister’s Office; he was later suspended in 2022 and prematurely retired, while 29 others, including VS Chakarvarty Director Commercial, AK Tulsiani Director Finance & four Executive Directors of CMO, linked to the scam were reinstated post the 2024 General Elections. In its January 2024 order, the Lokpal found prima facie evidence of negligence by SAIL officials and suggested possible collusion with Venkatesh Infra Projects Pvt Ltd. Though SAIL claimed no financial loss and defended VIPPL’s legitimacy as a dealer, findings by both the Central Vigilance Commission and Lokpal indicate a deeper nexus involving forged documents and internal complicity.

Forged Credentials, Subsidised Steel & Electoral Bond Nexus

In a damning exposé by The Wire, APCO Infratech Pvt Ltd has been named in a CBI FIR filed in October 2024, following revelations by the Lokpal and Central Vigilance Commission, implicating the firm in a Rs 400 crore scam involving the illegal procurement and resale of subsidised steel; the FIR accuses APCO of issuing a fraudulent work experience certificate to Venkatesh Infra Projects Pvt Ltd, a shell entity created just days before signing a Memorandum of Understanding with SAIL in October 2020, falsely claiming VIPPL's involvement in 11 major infrastructure projects, a fabrication later debunked by the National Highways Authority of India; The Wire's Hindi report by Ankit Raj, translated by Naushin Rehman, cites FIR documents and CVC findings revealing how this bogus credential allowed VIPPL to access steel under SAIL’s “Project MoU Scheme” at subsidised rates, only to divert it for profit in the open market, with SAIL officials allegedly turning a blind eye by approving the MoU without document verification, ultimately facilitating VIPPL’s acquisition of over 1.1 million tonnes of steel, including about 300,000-400,000 tonnes even after the matter of Venktesh Infra was placed with top management of SAIL, including erstwhile  Chairperson Ms Shoma Mondal and Mr VS VS Chakarvarty, meant for genuine public works; notably, between 2020 and 2023, APCO also purchased electoral bonds worth Rs 30 crore, entirely encashed by the BJP, while simultaneously bagging several infrastructure contracts from government bodies, raising concerns over possible quid pro quo arrangements.

The Role of The Wire

The Wire's coverage of Bhatia's claims has brought significant attention to the internal issues at SAIL. The article highlights specific instances where procedural lapses and unethical practices allegedly occurred, contributing to financial losses for the company. For instance, Bhatia pointed out cases where contracts were awarded to companies with questionable credentials, raising concerns about the integrity of the sale process. This media spotlight has prompted calls for a thorough investigation into SAIL's governance practices, with many stakeholders demanding transparency and accountability.

Impact on SAIL's Reputation

The allegations made by Bhatia and the subsequent media coverage have the potential to tarnish SAIL's reputation, which has historically been seen as a pillar of India’s industrial landscape. As a state-owned enterprise, SAIL is expected to uphold the highest standards of integrity and accountability. The ongoing controversy could impact investor confidence and the company's relationship with government stakeholders, further complicating its operational landscape. Analysts suggest that the fallout from these allegations could hinder SAIL's ability to attract foreign investment and partnerships.

Governance Challenges in Public Sector Enterprises

Bhatia's case is emblematic of broader governance challenges faced by public sector enterprises in India. Issues such as lack of transparency, political interference, and inadequate oversight mechanisms have often hindered effective management. The situation at SAIL serves as a reminder of the need for robust governance frameworks that ensure accountability and ethical conduct within public institutions. Experts argue that reforms are essential to restore public trust and enhance the operational efficiency of state-owned enterprises.

Call for Investigations

In light of the serious allegations and the media attention surrounding Bhatia's dismissal, there have been renewed calls for investigations by regulatory authorities. Stakeholders, including industry experts and civil society organizations, are advocating for a comprehensive review of SAIL's governance practices. Such investigations are seen as crucial for restoring public trust and ensuring that accountability measures are effectively implemented.

Key Takeaways 

- Rajiv Bhatia's premature dismissal from SAIL raises questions about governance practices.

- Allegations of corruption and mismanagement have been detailed in The Wire, highlighting internal issues.

- Calls for investigations into SAIL's governance practices have intensified following Bhatia's revelations.