The Name of a Company that Donated Rs 30 Crore to BJP Surfaces in SAIL's Steel Scam

New Delhi: In the last few years, the Lokpal has received numerous complaints indicating that the Steel Authority of India Limited (SAIL), a government-owned entity, has incurred losses amounting to crores due to corruption. Following preliminary investigations conducted by the Central Vigilance Commission (CVC), some of these cases were referred to the Central Bureau of Investigation (CBI) by the Lokpal, while others have been directly assigned to the CBI.

The CVC's preliminary inquiry report submitted to the Lokpal in July 2023, along with the FIR filed by the CBI in October 2024, named a company that made crores of electoral bond donations to the Bharatiya Janata Party (BJP). This company, APCO Infratech Private Limited, claims on its website to be a significant contributor to realising Prime Minister Narendra Modi's vision of a $ 5-trillion Indian economy. 

Moreover, data released by the Election Commission on March 14, 2025, reveals that the company acquired electoral bonds totalling Rs 30 crore between January 15, 2020, and October 12, 2023, all of which were encashed by the BJP.

APCO is accused of causing significant financial loss to SAIL in collusion with Venkatesh Infra Projects Private Limited (VIPPL). The Lokpal made scathing remarks regarding the relationship between the companies and SAIL in its ruling dated January 10, 2024.

A panel comprising Justices Abhilasha Kumari, Archana Ramasundraam, and Mahender Singh stated:

"We are of the view that there is prima facie material on record to indicate that, there was lack of due diligence on the part of the concerned officers of SAIL in providing material at lower costs to M/s Venkatesh vis-à-vis other similar customers that resulted in loss of opportunity for maximising profit to SAIL."

Raising serious questions on SAIL, the Lokpal said:

"It is not only a question of how much monetary loss has actually occurred but also relevant is the intention to manipulate the system in order to cause loss to SAIL and gain to the entity concerned. The system can be manipulated and played by experienced players in the steel market with the connivance of the concerned officers of SAIL, whomsoever they may be."

Who are the players of the steel market? How are they in connivance with SAIL?

A Lokpal complaint seen by The Wire Hindi alleges irregularities within SAIL and the nexus between its officials and private companies. 

The primary complaint against SAIL is that it sold over 1,100,000 metric tonnes of steel at reduced prices to more than 100 companies that were not engaged in any construction activities, yet received discounts from SAIL under the pretence of construction work. In addition, these companies resold the steel purchased from SAIL at a higher price to other firms. Under its Memorandum of Understanding, SAIL provides 'interest-free loans' to construction companies purchasing steel. If a company opts not to utilise this facility, it receives a discount equivalent to that amount. 

Complaints submitted to the Lokpal claim that SAIL has incurred losses exceeding Rs 400 crore as a result of these irregularities.

The company that benefitted the most

Investigations carried out by different agencies indicates that VIPPL is the primary beneficiary of the alleged misconduct, with APCO implicated in the corruption allegations associated with this company. 

The case traces back to when SAIL entered into a contract with VIPPL on October 20, 2020, based on a certificate provided by APCO, to deliver 150,000 metric tonnes of steel annually. It is alleged that despite lacking the status of a construction company, VIPPL received greater discounts than those available to legitimate construction firms. The agreement stipulated that VIPPL would utilise this steel for construction purposes. However, it appears that VIPPL did not engage in any construction activities. 

According to the investigative agencies, VIPPL procured steel from SAIL at a discounted price and subsequently sold it in the market at inflated rates.

But how did this happen? Was SAIL unaware of the company’s status?

The CVC investigation indicates that SAIL officials failed to conduct due diligence on VIPPL prior to entering into an MoU with the company, which was established only on October 12, 2020. In other words, just a week-old company secured a significant agreement with the leading steel manufacturer in the country. 

Registration certificate of VIPPL issued by the Ministry of Corporate Affairs (MCA) of the Government of India.

SAIL contended that the lack of investigation into VIPPL's involvement in construction activities was due to the absence of such requirements in their MoU policy. 

In response, the CVC remarked:

'With reference to M/s Venkatesh, it is found in this context that this company was not an established customer of SAIL. Therefore, even though their requirements were large and the circular did not apply to its case, the matter warranted scrutiny. It appears logical that instead of believing whatever documents had been furnished by M/s Venkatesh, due diligence should have been made with regard to the genuineness of the requirements.'

Caption: SAIL had signed the agreement with VIPPL on the basis of a certificate given by its old customer APCO, which stated that VIPPL is associated with them.

The series of allegations does not end here. 

According to the complaint, a significant portion of the steel, approximately 124,000 metric tonnes, acquired from SAIL was not directly ordered by VIPPL at its construction site, but rather in the name and address of other firms. This suggests that VIPPL was procuring steel from SAIL and distributing it to other entities. 

The underlying reason for the agreement between VIPPL and SAIL: A certificate from APCO

SAIL entered into the agreement with VIPPL based on a certificate issued by APCO, which as engaged in construction activities. Issued on September 12, 2020, the certificate stated that VIPPL was collaborating with APCO on 11 projects, including expressway initiatives, and that their performance was satisfactory. Significantly, the certificate was issued a month before the VIPPL was established on October 12, 2020. 

In light of these discrepancies, SAIL Vigilance reached out to APCO on March 23, 2023, requesting copies of the work orders assigned to VIPPL and the rationale behind the issuance of the certificate. APCO responded on April 22, indicating that VIPPL's promoter, Ekta Agarwal, has a longstanding relationship with them and that the company previously operated under the name Venkatesh Steel. The name VIPPL was sanctioned by the Ministry of Corporate Affairs on September 7, 2020, after which APCO transferred the previous orders to this new entity. 

However, APCO stated that it could not provide the old work orders as most of those projects have since concluded. 

In addition, APCO clarified that they had not issued the certificate for SAIL. 

The question is: If the certificate was not directed to SAIL, how then did SAIL supply steel to a newly established company at reduced rates?

Caption: CVO-SAIL submitted this report to the Ministry of Steel on May 6, 2023.

Chief Vigilance Officer (SAIL) found that APCO had made misleading claims when issuing the certificate. The certificate claimed that VIPPL and APCO were jointly engaged in reinforcement and structural steel work for 11 infrastructure projects throughout India, including several projects under the National Highways Authority of India (NHAI). However, the CVC discovered that this assertion was unfounded. NHAI informed CVO-SAIL that APCO was involved in three projects with them, but VIPPL was not a subcontractor for any of these. Given these circumstances, the CVO-SAIL noted, 'The claim of having long term association and work having been done on its (M/s APCO) does not prima facie look convincing'. The CVO-SAIL emphasised that 'the business relationship between VIPPL and APCO is at the core of the issue.'

Caption: This document states that VIPPL was purchasing goods from SAIL and sending them to APCO. Also, most of the material purchased from SAIL was billed at the locations of other firms.

APCO's BJP connection

According to the Election Commission, APCO, which is registered at a Lucknow address, acquired electoral bonds worth Rs 30 crore between January 15, 2020, and October 12, 2023, which were subsequently encashed by the BJP. During that period, according to news reports, the company enjoyed favourable attention from the BJP. In recent years, APCO has been awarded numerous significant and prestigious government contracts, amounting to thousands of crores of rupees. 

The company's website states that it is involved in 10 expressway projects across India, including the nation's first 14-lane Delhi-Meerut Expressway. Additionally, it is undertaking major initiatives such as the Z-Morh tunnel project in Jammu and Kashmir, a cable-stayed bridge in Mumbai, and an elevated viaduct metro project in the Delhi-NCR region.

FIR registered with the CBI

Following the order issued by the Lokpal, the CBI filed a first information report (FIR) on October 10, 2024, implicating VIPPL and APCO. The FIR identifies officials from SAIL, Venkatesh Infra Projects Private Limited, and APCO as accused. The charges include criminal conspiracy, fraud, forgery, the use of counterfeit documents, and violations of the Prevention of Corruption Act. It is noteworthy that VIPPL is not the sole entity that has exploited SAIL under the guise of fictitious 'projects'. In total, 43 companies have been reported to the Lokpal over the years for misusing SAIL's policies related to construction. Additionally, numerous complaints against similar companies are currently under review by CVC and CVO-SAIL. Further details will be provided in subsequent reports.

The Lokpal's order

The Lokpal's order says:

'We are of the view that there is prima facie material on record to indicate that, there was lack of due diligence on the part of the concerned officers of SAIL in providing material at lower costs to M/s Venkatesh vis-à-vis other similar customers that resulted in loss of opportunity for maximizing profit to SAIL… The system can be manipulated and played by experienced players in the steel market with the connivance of the concerned officers of SAIL, whomsoever they may be.'

The Lokpal further noted:

‘Steel Ministry is of the view that the matter requires further investigation by an external agency having authority to examine various stakeholders and summon records. As such, Ministry recommends CBI Inquiry/investigation to unearth the linkage of officials with the private companies and business association of the private parties, etc.’

In response, SAIL asserted:

‘No loss has been caused speculative/notional or otherwise… There was no irregularity in approving the proposal of SAIL for selling TMT bars to M/s Venkatesh as the latter was neither a sham entity or a shell company, but a genuine player in the steel market.’

But the Lokpal rejected this defence and said:

'The fact that has emerged is that lack of due diligence on the part of officers of SAIL is prima facie noticed for considering the lower pricing level of M/s Venkatesh vis-à-vis other customers of similar take-off and especially considering their past association with SAIL, that resulted in loss of opportunity for maximising profit to SAIL. Therefore, possible connivance of some officials with M/s VIPPL cannot be ruled out.'

How did the complaint go from top officials to the CBI?

On November 17, 2022, Rajiv Bhatia, the general manager of marketing and product manager at SAIL-CMO headquarters in Kolkata, submitted three complaints to the then chairman of SAIL, Soma Mandal, and director of commercial, V.S. Chakraborty. The first complaint pertained to VIPPL. A week later, on November 24, 2022, Bhatia was suspended without any justification and remained in suspension for a duration of 10 months. During this period, he addressed a letter to the prime minister on December 1, 2022, bringing the issue to his attention and requesting an investigation. 

Later, Bhatia submitted two additional complaints to the Prime Minister's Office, which included references to several other companies in addition to APCO. No action was taken. 

Subsequently, he approached the Lokpal on January 11, 2023. The Lokpal acknowledged these complaints on March 28, 2023, and mandated a preliminary inquiry by the CVC. The investigation report from the CVO-SAIL was submitted to the CVC on August 24, 2023.

On January 10, 2024, the Lokpal ordered the CBI to conduct an inquiry. Soon after, on January 19, 2024, the Ministry of Steel swung into action and suspended 29 officials, which included two representatives from SAIL: VS Chakraborty (Director – Commercial) and Shri AK Tulsiani (Director – Finance), as well as V. Suresh, a director at NMDC. SAIL also suspended several other high-ranking officials, such as Executive Director (Finance & Accounts) CMO, SK Sharma, Executive Director (Commercial) Vinod Gupta, Executive Director (Sales & ITD) Atul Mathur, and Executive Director (Marketing Services) RM Suresh. All suspended officials were reinstated in June 2024 following the General Elections of 2024.

However, the complainant, Rajiv Bhatia, was prematurely retired by SAIL on February 16, this year, alongside several other officials. SAIL stated that these officers failed to meet the standards of 'honesty and accountability'. Notably, Rajiv Bhatia had previously highlighted this issue, yet he was dismissed from his position seven years prior.

What do the accused have to say?

The Wire Hindi contacted all the parties involved in this matter. SAIL refused to officially comment on the subject. We also sent a mail to VIPPL and tried to contact its director Ekta Agarwal. Questions were also sent to APCO via email, but no response has been received so far.

Translated from the Hindi original, published on The Wire Hindi, by Naushin Rehman. 

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