How officials looted and killed a company

How officials looted and killed a company
BAJINDER PAL SINGH

CHANDIGARH, AUG 27: It's an old schoolboy trick. Write something in pencil and ink it later. And Punwire officials have taken quite a few leaves out of his book. Inking bills and cash vouchers is one of the many tricks that some in the management of the telecom giant resorted to while milking the Government undertaking dry.

No wonder then that Punwire has been declared sick. The Punjab and Haryana High Court has appointed a provisional liquidator for the company. Production stopped a long time ago, and the employees have been without salary for nearly 15 months. Ironically, Punwire was once one of the few profit-making public sector companies in the state and it was touted as an example of how Government companies should be run.

Inking of pencil writings apart, the web of telecom companies woven around Punwire led to a major money-laundering operation. The maze of companies led to fake accounts, fake selling and buying and fake octroi receipts being manufactured for public and official consumption.

The case of Punwire selling pagers to Punwire Mobile Communications Limited (PMCL), a sister concern, is a telling example of how companies acted as conduits for transfer of money and as loan guzzlers. In 1998-99, PMCL took a loan from the Punjab and Sind Bank on the plea that it has to pay Rs 2 crore to Punwire for purchase of over 6,000 pagers. Based on investigations by Pricewater House, the FIR lodged by PMCL alleges that there was no movement of pagers from Punwire to PMCL and as a result a loan was obtained from the bank, and the money transferred from one company to another without any actual sale taking place. This, alleges the FIR, was resorted to so that Rs 2 crore could be transferred from PMCL's account to Punwire.

The mesh of sister companies served other purposes also. For instance, Punwire inflated the paging project cost while selling telecom equipment to PMCL. A transmeter, which cost Rs 2.4 lakh to Punwire was sold at Rs 25.5 lakh to PMCL. And not one, but 58 such transmeters were sold. The inflation in the cost of terminals was less, from Rs 8.7 lakh to Rs 14.6 lakh.

These two alone cost PMCL an extra Rs 15 crore. The interesting aspect about the deals is that the funds provided to PMCL was given by Punwire itself and the funds received as equity were to be returned to Punwire through purchase of paging equipment.

Another misappropriation revealed by Pricewater House is regarding ``photocopied invoices'' with no stamp of gate entry. In the case of purchase of computers, the FIR lodged by Punwire alleges that neither were quotations invited from the supplier, and nor any formal purchase order issued. None of these allegedly purchased items arrived in the company premises, as the invoice was only a photocopy attached with a purchase voucher.

Fake octroi payments have been detected by the company as another way of embezzlement. In the years 1997-98 and 1998-99, octroi expenses were made on the basis of duplicate octroi receipts. In order to make the transaction look genuine, the signature of claimants were forged. The company was defrauded of nearly Rs 2.2 crore in this manner, according to Pricewater House investigations.