Financial Daily from THE HINDU group of publications
Wednesday, Mar 09, 2005

Port Info

Group Sites

Corporate - Economic Offences

Govt initiates disciplinary action against ITDC official

Our Bureau

New Delhi , March 8

THE Union Government has initiated disciplinary action against the Vice-President, India Tourism Development Corporation's duty-free division, Mr R.C. Gupta, who has been held responsible for the acts of omission and commission in the orders placed with UDV, manufacturer of various brands of liquor, including Johnnie Walker Black Label.

In a report submitted by the division, it has been shown that ITDC's duty-free division violated the purchase manual in July 2003 when it confirmed to UDV that its `proforma invoice' would be treated as the purchase order. This was to supercede the usual process of calling for proforma invoice, checking details of prices and quantity among other things and then sending it to the high-power committee for internal concurrence if the value of the order exceeded Rs 75 lakh.

An official statement issued on Tuesday states that this change was brought about without the approval of the Chairman and Managing Director of the Finance Department and was done by the Vice-President of the Division, Mr R.C. Gupta.

The statement states that departure from the laid-down process was done only for products of UDV and adds that under this unauthorised dispensation, 42 consignments of goods were allowed to be shipped by the manufacturers without purchase order. The goods were valued at Rs 30. 82 crore.

Besides, in April 2004, a decision was taken to price Black Label at $27. But in spite of the increase, the loss suffered by ITDC on each bottle sold was 14.29 per cent. The statement adds that this loss was to be covered by the profits on other brands of whiskies sold by the duty-free shops. "But nowhere was an attempt made to try and reduce the cost price of Black Label. This led to a loss of Rs 2 crore since the largest quantity brought was of this brand," the statement adds. ITDC sold 14,000 cases of the Black Label brand last calendar year, officials said.

"It has also been reported that due to the irregular practices followed during 2001-02, the turnover of the division came down to Rs 71 crore from Rs 82 crore during the previous year. This was despite opening new shops at Bangalore, Hyderabad, Calicut and Ahmedabad and an increase in the outbound traffic from India during the period," the statement adds.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Marico Ind going in for name change

PSL bags L&T order
FDA team visits Orchid Chem unit
Madhucon bags NHAI deal
Plea to appoint receiver for Priyamvada Birla's belongings
Kerala CM calls meeting on Indal smelter unit
It's advantage corporates on bank deposit arbitrage
Ashok Leyland to sell castings unit for Rs 62 cr
Holcim open offer for ACC delayed
Nod for Vani Sugars' merger plan
Uttam Galva Steels set to double capacity
IHCL to add 10 indiOne hotels over next 10 months
SKP group eyes SME sector in Pune
Chennai may join race for BMW plant
Lupin terminates deal with Allergan Inc
`Mid-Day will foray outside Mumbai in coming fiscal'
Honda sets target of 1 lakh cars a year to make engines in India
VSP Feb sales turnover
Govt initiates disciplinary action against ITDC official

The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription
Group Sites: The Hindu | Business Line | The Sportstar | Frontline | The Hindu eBooks | The Hindu Images | Home |

Copyright 2005, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line