Finance finds anomalies in cashew corporation

THIRUVANANTHAPURAM: The finance inspection wing of the government has detected irregularities in the functioning of the state cashew development corporation (KSCDC) and accused its board and managing director of lack of transparency in procurement and sale.
The report, submitted to the industries department, accused the corporation of flouting all business norms in procurement of raw material and sale of products. It says the corporation had invited open tenders for procurement of cashew kernels but favoured a Kottayam-based company as vendor. In the sale of the product, the corporation accepts an advance amount promising to sell the product based on the buyer's demand and this becomes a liability for it even if there is a rise in market price of the product.

KSCDC managing director K A Retheesh, however, termed the report as baseless. "Any business policy is based on contract rates aimed at making profits. KSCDC would prefer the export of cashew to an Indian company if it is assured of immediate benefits. The bill clearance for export to a foreign company will happen after packing, shipping and receipt, which will take about 50 days," he said. "A government official had written to the National Investigation Agency (NIA), saying that the KSCDC had imported arms and currency notes along with raw cashew kernels. If the company has such criminal antecedents, the home department should investigate it. Such false allegations are aimed at defaming the company, which is struggling for survival," he said.
Retheesh said the corporation has no working capital as against an accumulated loss of Rs 979.33 crore. However, from being a company on the verge of closure in the 90s, with only 20 working days a year, the corporation offers 288 working days a year now. "The company has suffered owing to political high-handedness and false allegations. Its turnover has come down to Rs 125 crore in 2012-'13 from Rs 275 crore in 2011-'12." The corporation has 30 cashew factories, with around 20,000 employees, and it is forced to ensure employment irrespective of loss or profit as a public sector unit.
An official with the industries department said on condition of anonymity that running a public sector company in Kerala was tough. "The company will have to face allegations of misappropriation if it tries to make profits despite odds while those heading it will have to be held responsible if it shuts down. The system is designed to fail," he said.

India Times