20 July 2020
Sharada Subramaniam, an Indian Audit and Accounts Service official, allegedly diverted $2.1million of the Coffee Board into mutual fund causing a loss of $71,000 to the organization and corresponding gain to herself during her posting as its Director, the CBI has alleged in the FIR.
According to CBI, Nagarajan, the then accounts officer of the Coffee Board, G Ananda, also accounts officer in the board, M Gururaj, managing partner of Green Homes and G S Financial Services and Sandeep Dash, ICAS, the then Finance Member, Bangalore Development Authority (BDA) and husband of Subramaniam have connived with her in the fraud. The fraud happened during the period from 1998 and 2003.
Sharada Subramaniam was dismissed on 19 May 2020.
She had submitted a 250-page representation to the Comptroller and Auditor General of India (CAG) on November 7, last year, to counter serious charges brought out against her in the UPSC report, which was shared with her so that she could defend herself against them.
The CAG after examining voluminous documents, issued an order on June 13, 2018, suggesting penalties can be imposed on her under Central Civil Services (Classification, Control and Appeal) Rules, 1965. They ranged from compulsory retirement to dismissal from service under clauses vii, viii and ix of Rule 11 of CCS (CCA) Rules, 1965. Clauses vii and viii talk of removing an officer from service but the punishment does not bar him or her from future employment under the government, while clause ix is invoked for dismissal from service which is also a disqualification for future employment in government.
Subramaniam filed a petition in the Central Administrative Tribunal (CAT) on November 20, 2019, against the CAG’s move to indict her. The matter is still pending with the CAT.
It is alleged that Bangalore Development Authority’s (BDA) more than $387 million were illegally diverted through certain tainted banking services for investments in mutual funds and other organizations including Coffee Board and Bangalore Metro Rail Corporation Limited. Investigations have revealed is that in November 2002, BDA’s $138,000 was put in a mutual fund in the name of Director of Finance of Coffee Board.
Her husband Sandeep Dash was earlier dismissed from Indian Civil Accounts Service (ICAS) after he was arrested by the Karnataka police in 2015 August on charges of embezzling state exchequer in the same BDA scam. He committed irregularities during his tenure as member of finance of BDA from 1997 to 2005. Later he moved as Executive Director (Finance) Bangalore Metro Rail Corporation Limited. Due to investments in mutual funds, the BDA had lost $26 million towards July 2015 end, the CAG had revealed in its 2016 audit report.
The CBI charged that Subramaniam connived with her husband Dash and two brokerage firms — Green Homes India and GS Financial Services — to fraudulently divert Coffee Board’s $2.1 million surplus funds. It was invested in various mutual funds which resulted in wrongful loss of $71,000 to the Coffee Board and corresponding gain for themselves and others. Subramaniam refuted the allegation saying that only $133,000 was invested in mutual funds and that two was with the approval of the Coffee Board.