Government accepts due diligence failure by PSUs for rice exports to Africa news
20 November 2010

The government yesterday conceded in the Lok Sabha that in the matter of export of non-basmati rice to some countries in the period from December 2007 to March 2009 some irregularities had been committed as a result of PSU officials failing to comply with due diligence, which resulted avoidable losses to the PSUs.

In a statement made in the midst of noisy interruptions, the union commerce and industry minister, Anand Sharma, recalled his statement of 30 July, 2009, in which he had pointed out that though the government authorised the release of about 13.5 lakh tonnes (lt) of non-basmati rice, the actual quantity shipped was about 1.22 lt.

Stating that the transactions  were to be conducted on a commercial basis with the African countries, Sharma said, that with respect to transactions with five countries, - Comoros, Ghana, Madagascar, Mauritius and Sierra Leone, the importing African countries had nominated both the importing agency in their country and domestic supplier based in India.

However, a subsequent scrutiny of transaction revealed infringements, and an enquiry was ordered with the  additional secretary in the department of commerce as the enquiry officer.

He added that transactions with Mauritius (by STC and MMTC) had been found to be competitive and transparent.

However, he said that with the exception of Mauritius, the exporting PSUs of the department of commerce failed to conduct the transaction through a transparent procedure in selection of domestic associates or determination of the price at which the rice was exported.
In such cases, the enquiry revealed, the importing country nominated the importing agency in the recipient country and selected a domestic supplier in India, without involving the PSUs.
The government agency in the importing country fixed the selling price (purchase price for importing country) settling the selling price in negotiations with the domestic India supplier without involving the PSUs, the designated government agencies.

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Government accepts due diligence failure by PSUs for rice exports to Africa