Karnataka: Lokayukta to probe 'scam' in procuring raw materials by KSDL

The Lokayukta police are set to probe alleged irregularities in Karnataka Soaps and Detergents Limited (KSDL), two weeks after the employees’ union alleged a scam in the procurement of raw materials worth Rs 800 crore.

The union filed a complaint with the Lokayukta on February 21, citing a Rs 95-crore loss in the KSDL factory. The government-run KSDL manufactures the popular Mysore Sandal Soap and other aromatic products.

Lokayukta Justice B S Patil told DH that the probe was delayed because the union took time to submit documents to substantiate the allegations. The recent raid on the premises of Prashanth Kumar, the son of BJP legislator Madal Virupakshappa, also held up the probe, he added.

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Virupakshappa was the chairman of KSDL, a post he quit on Friday after his son’s arrest.

The union’s complaint has assumed significance in the wake of the bribery scandal. Justice Patil said that the complaint would be investigated soon.

Lokayukta police sources said that the complaint would be investigated by registering a separate case. It will not be linked to the raid on Kumar.

According to the union’s complaint, the KSDL factory has been facing losses for the last four years because of “persistent” corruption in procuring fragrances and other materials. The quality of soap has deteriorated because of the use of substandard raw materials, it adds.

Raw materials and fragrances procured by KSDL are not tested at the Fragrance and Flavour Development Centre (FFDC), which was set up in Uttar Pradesh’s Kannauj by the union government to test raw materials and perfumes.

The complaint alleges that KSDL rejected many tenders on the pretext of testing raw materials and fragrances.

Although some companies bid competitively, KSDL has awarded contracts to select companies in the last 30-35 years. Materials worth Rs 800 crore are said to have been purchased in 2022-23, in violation of the purchase and store manuals. There is no committee to take action on the irregularities, the complaint stated.

Companies taking part in the tender cited an increase in the price of raw materials from 2-3 per cent to a whopping 70-140 per cent, according to the complaint.