Shares of HCL Infosystems and MTNL took a hit in early trade on the BSE today after the CBI carried out searches in the premises of former top officials of both companies in connection with alleged irregularities in a Commonwealth Games project
New Delhi: The Central Bureau of Investigation (CBI) on Wednesday carried out searches in the premises of former top officials of Mahanagar Telephone Nigam (MTNL) and Noida-based HCL Infosystems for allegedly inflating the cost of setting up a broadcast network for the Commonwealth Games (CWG) by nearly Rs400 crore, reports PTI.
Soon after registering a new case, sleuths of the country’s premier investigating agency swooped down on the residential premises of MTNL’s then CMD RSP Sinha, executive director SM Talwar, GM (corporate sales) NK Jain and DGM Jitendra Garg in Delhi, Noida, Jaipur and Patna, CBI sources said.
“During searches conducted so far, documents relating to immovable and movable property belonging to accused persons and other incriminating documents have been recovered,” CBI spokesperson Dharini Mishra said in a statement, adding searches were on at these places till late evening.
When contacted, Mr Sinha said he was in office till 9 January 2010 during which only the letter of intent was issued but there was no approval during his tenure. He said he was out of Delhi.
“Everything was approved by the Department of Telecommunication (DoT) and the MTNL board after I left. Somebody wants to drag my name,” Mr Sinha told PTI.
The agency has registered the case for against officers of MTNL and HCL Infosystems dealing in optical fibre transmission for criminal conspiracy and provisions of Prevention of Corruption Act.
“It is alleged that MTNL awarded the work of broadcast network based on IP/MPLS technology at an exorbitant price of approximately Rs570.12 crores by manipulating specifications in such a manner as to make them tailor-made for the said bidder to the said private company (HCL),” Ms Mishra said.
The agency alleged that initial estimate of broadcasting data transmission project for the sporting extravaganza was very limited with an initial estimate of Rs31.43 crore but MTNL officials included a Broadcast Video Network based on IP/MPLS technology which resulted in cost escalation by Rs380.04 crore.
The CBI alleged that this change in specification was done with an intention to cause huge pecuniary advantage to contract firm—HCL Infosystems causing loss to exchequer, sources said.
“The enhancements in the scope of work and engineering of conditions of contract were made by the officials concerned of MTNL in such a manner that sub-contract could be awarded only to the said private limited company,” Ms Mishra said.
The high-level Shunglu Committee constituted by the prime minister has also criticised the project.
“MTNL was tasked with providing inter-connectivity between Games venues and the broadcasting centre at ITPO. Its costs were so high that a working group had to be constituted and costs were reduced to less than half of what had been proposed,” the report had said.
HCL Infosystems and MTNL took a hit in early trade on the Bombay Stock Exchange (BSE) today after the CBI carried out searches in the premises of former top officials of both companies in connection with alleged irregularities in a Commonwealth Games project.
Shares of IT firm HCL Infosystems tumbled by 11.43% to hit a month’s low of Rs92.55 on the BSE. Later, the stock managed to erase some of the losses and was trading at Rs96.45, down 7.70% from its previous close.
The MTNL stock also came down to Rs43 from the previous close of Rs44.95. Later, the scrip was quoting at Rs44.05, down 2% from the previous close.
According to marketmen, the fall in these stocks was due to the negative news. The searches were carried out after the market close yesterday.