Seven former managing directors are accused of causing a loss of Rs 642 crore to state-owned mining company.

The State government has asked the Lokayukta to conduct a fresh inquiry into the allegation of irregularities against officials in Mysore Minerals Limited (MML), the govern­m­ent-owned mining company.

Citing certain lapses in the investigation, the government has recommended to the Lokayukta to reopen cases against the officers to examine their role in the alleged irregularities which caused a loss of Rs 642 crore to the MML. The government sought fresh inquiry on March 17. The chief secretary’s office has sent a letter to the Lokayukta registrar in this regard.

The Lokayukta had named six IAS officers in the MML irregularities: V Umesh, I R Perumal, K S Manjunath, D S Ashwath, Mahendra Jain and G V Kongwad. The lone IPS officer, who was the MD from 2004 to 2007, was Jija Madhavan Harisingh. These officers held the posts of MML managing director from 1999 to 2008. In its previous report on illegal mining (part I) submitted to the government on December 18, 2008, the Lokayukta had recommended strict action against officials who allegedly caused a loss of Rs 642 crore during the tenure of the seven MDs.

Huge losses

But the Commerce and Industries (C&I) department, under which MML is a public limited company, has defended the officers in question. The allegations such as causing losses to MML “cannot be substantiated in toto”, it said and suggested that the huge losses could be attributed to other factors like excess manpower, unremunerative prices of minerals, high cost of production etc.

Meanwhile, the former MDs contended that the Lokayukta neither issued them any preliminary notices nor gave them an opportunity to present their case before it conducted investigations. The Lokayukta report is “ultra vires” and the investigation ad hoc (sic), they claimed. The defendants also said there was no sufficient evidence against them, as mentioned in the Lokayukta’s original report, to prove their involvement in the irregularities. The Lokayukta had withdrawn the notice issued to Kongwad later during their investigation, based on the recommendations of the C&I department, as he was the MD of MML for only six months.

CAT moved

While Harisingh and Ashwath have moved the Central Administrative Tribunal (CAT), contesting the allegations against them, the four other IAS officers have denied the allegations in their response to Lokayukta’s notices.

Based on this defence by the C&I department and the “loopholes” claimed by the defendants, the government has asked the Lokayukta to “consider the State government’s stand and further necessary action” into the alleged irregularities at MML.

Top officers in the Lokayukta, however, said the communication had not reached them officially, though they had learnt about it. The ADGP of Lokayukta police, H N S Rao, said: “We have not received any communication so far to reopen the investigation,” he said.