CBI makes first arrest in MMTC scam

Chennai:

Central Bureau of Investigation (CBI) has arrested V Gurumurthy, former general manager (Finance and Accounts) MMTC Ltd for his alleged involvement in the irregularities worth several crores in the Union government run premier foreign trade behemoth, the Minerals and Metals Trading Corporation of India (MMTC).

Gurumurthy was arrested after the anticipatory bail plea was withdrawn, sources said. He was produced before principal CBI judge Yousuf Ali on Monday and was remanded to 15 days judicial custody.

Following arrest of Gurumurthy more arrests are likely to follow in the case. This comes in the wake of CBI filing a First Information Report (FIR) which alleged that during the period 2007-09 at Chennai and other places, S Gurusamy, former chief general manager of south zone, MMTC Limited, Chennai Regional Office, Gurumurthy and some unknown officials entered into a criminal conspiracy with Surana Corporation Limited (SCL) to cheat MMTC in bullion (gold and silver) trading.

According to FIR available with Express, “The officials abused their official position by extending undue favours to the firm by intentionally omitting to debit and recover the difference exchange rate from the firm thereby causing a loss to the tune of Rs 18 crore.

During the period 2007-09, the firm used to import gold and silver under the Stand-by Letter of Credit (SLBC) scheme. It used to deposit the cost of bullion arrived on the basis of a “notional price and notional exchange rate” prevailing on the date of delivery of consignments.

As per the system and procedure, SLBC transactions are routed through the online Bullion Trading System (BTS). However, the two officials along with others dispensed with the all important BTS mode and made all transactions manually to allegedly favour the firm.

“The officials deliberately treated the provisional invoice as the final. They showed the difference in cost [difference between the provisional and the final invoice] as a variation in the purchase rate.”

The officials manipulated the system and intentionally failed to reconcile the difference in exchange rate and to recover the premium and other accompanying costs, the FIR added.

Interestingly, the officials also “covered up” the wrongful loss to MMTC by allegedly showing the debit balance of Rs 18 crore in favour of Foreign Vendors Account in their book of accounts.

Sources reveal that following the registration of cases against the MMTC officials for criminal conspiracy, cheating and for various offences under the Prevention of Corruption Act, the CBI sleuths conducted raids in various places on June 20, 2012 including the residences of the officials, godowns and corporate offices of Surana Corporation Limited.

Interestingly, Gurusamy after his retirement from MMTC on June 2008 joined the SCL as director while Gurumurthy, who retired on November 30, 2011, joined a leading jewellery firm in Chennai that buys gold from Surana.

The MMTC is dealing with the export and import of precious metals and minerals. It is India’s largest foreign trade enterprise.