Malabar Cements graft case: Kerala govt sanction against ex-MD, other accused

The 2008 corruption case pertains to Malabar Cements Ltd purchasing fly ash from ARK Woods and Metals Pvt Ltd, promoted by industrialist VM Radhakrishnan, who is a co-accused.
Malabar Cements
Malabar Cements
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In a major development in the corruption related to the Public sector institution the Malabar Cements Limited, the Kerala state Industries department had issued an order to prosecute former Managing Director of MCL, M Sundaramoorthy, and three others. The 2008 graft case pertains to MCL purchasing fly ash from ARK Woods and Metals Private Limited, promoted by VM Radhakrishnan, with inflated bills. MCL ran into a loss of Rs 2.8 crore.

The corruption case involves a nine-year agreement (2004 to 2013), stating that ARK Wood and Metals Pvt Ltd will supply fly ash to Malabar Cements Ltd in Palakkad district of Kerala. However, in 2008, ARK Woods and Metals unilaterally backed out from the contract and stopped the supply of the dry fly ash to MCL, Balasubramaniam, a retired Deputy of Superintendent, who was part of the Vigilance and Anti-Corruption Bureau (VACB) team investigating the case, told TNM.  

MCL had also provided Rs 50 lakh as bank guarantee to ARK Woods and Metals for the due performance of the contract. However, after backing out, the private company allegedly illegally withdrew the bank guarantee amount along with interest, due to which MCL sustained a loss of Rs 52 lakh. It was alleged that the money was released in connivance with Coimbatore-based ARK Wood and Metals and MCL. The persons arraigned in the case include MCL’s M Sundaramoorthy and legal officer Prakash Joseph, ARK Wood and Metals’ Radhakrishnan and executive director AR S Vadivelu.

The order, which has been accessed by TNM, was signed by the Industries Principal Secretary, APM Muhammad Haneesh on January 20. According to the order, Sundaramoorthy and Prakash Joseph, while in their respective capacities and as public servants, “abused their official positions, committed criminal misconduct, entered into criminal conspiracy” with each other in different occasions and with ARK Wood and Metals’ Radhakrishnan and Vadivelu.      

The order also noted that the MCL allowed the private company to invoke the bank guarantee of Rs 50 lakh from the Canara bank (Palakkad branch), “without taking proper actions and by delaying the legal proceedings.” It also alleged that the private company obtained an “undue pecuniary advantage” of Rs 50 lakh. 

As a result, MCL sustained a huge financial loss, including the bank guarantee amount and its interest, reportedly to the tune of Rs 2,78,49,381. “These persons have committed criminal conspiracy and criminal misconduct,” it read. 

The order also states that the actions of the accused amount to offences punishable under section 13(2) [imprisonment for public servant who commits criminal conduct)],  read with 13(1) (c) and (d) [dishonestly or fraudulently misappropriate properties under public servant for own gain] of Prevention of Corruption Act 1988, as well as Sections 409 (criminal breach of trust by public servant), 420 (cheating and dishonestly inducing delivery of property) and 120B (party to criminal conspiracy) of Indian Penal Code.

M Sundaramoorthy was appointed as the Managing Director of the Malabar Cements Limited when current CPI(M) Member of Parliament Elamaram Kareem was the Industries Minister of Kerala in the VS Achuthanandan government (2006-2011). The MP is alleged to have played a role in the corruption. Sundaramoorthy worked with the Chettinad Cements Limited prior to that. 

The death of the former secretary of MCL, too, had landed many in trouble. It was widely alleged that Sundaramoorthy tried to oust the former company secretary of the Malabar Cements Limited, V Saseendran after the latter informed the then Chief Minister and the Vigilance department, in 2009, about the corruption involving the Malabar Cements Limited, including the one involving ARK Woods and Metals. Saseendran was allegedly intimidated, following which he resigned. However, two days after the chargesheet in the case was finally filed in 2011, Saseendran and his two young sons were found dead in the house at Kuriakadu in Palakkad district.

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