Kind Attention: The Secretary, The Vice President, The President ICAI, New Delhi
CC: Council Members
Dear Sirs,
Re: Rs. 100 Crore Deal--Shocking and Frustrating situation –Report of the Group An eye wash !—Stringent actions needed
1. On
the internet I noticed some of the papers out of the “Report of the
Study Group” dated 30/1/2012. It was most shocking as well as
frustrating to read the contents. It is difficult to
comprehend how a Deal of Rs. 100 Crores lacking on the parameters of
Process, Size, Location and Valuation becomes acceptable when it gets curtailed to 10% of its original size/value.
2. Enough time and money have now been spent. Council term is expiring soon.
3. The
report of the Group should not be accepted at all and the members of
the Group be subjected to stringent questioning as to their methodology
of study and the unacceptable quality of their report.
4. No
investigation from outside independent professional investigating
agencies is recommended. No legal opinions are suggested to be obtained
for fixing the responsibilities on the functionaries. No security
deposits or Indemnity letters are planned to be taken from all the
concerned functionaries by holding them Collectively responsible till
the time exact responsibility gets identified.
5. The Report is lacking in fulfillment of basic expectations as to finding what
happened, whether something was wrong, where were the shortcomings, who
were responsible, what corrective actions are necessary in the short term and the long term to protect ICAI interests and Governance norms etc.
6. Apart
from the basic issues like why 7th member is introduced in the final
stages in January in a 6 member Group and why the so called extension in
time for submitting the report, there are issues of far reaching consequences like the Group not reporting at all on the matters of terms of reference and recommending something which is very highly objectionable for only one Nagpur project and
that too which is not at all in their purview. It is not clear why the
time is not extended further if there is paucity of time, papers are
voluminous
and there is delay in receiving relevant papers from ICAI Office. Not
reporting on all the 13 projects as per the terms of
reference and not on important aspects like Regulations, approvals,
costs, tendering, monitoring is very serious particularly when the only one point is being hurriedly put forward is proposal of Developer for 10% area.
7. The
term of the Council is expiring soon and it is of utmost importance
that the responsibilities be fixed for violation/dilution of Governance
norms if any.
8. People
do suspect and One cannot rule out the possibility of collusion of the
functionaries and the vendors when the Contract Deals run into Crores of
Rupees and the interests of the institution like ICAI are at stake. The
entire aspect of pushing the revised proposal of the Developer for 10%
of the Original Contract also is likely to create suspicion in the minds
of people.
A few questions which come to the mind on reading the part of the Report are as under--
9. The inclusion of 7th member in the Study Group whether , why and when was approved by the Council ,because it was a 6 Council Member Group as informed by the President in the “Facts on proposed project of COE Nagpur.
10. When did the Council extended the term of submission of Report by the Group from 31st December 2012 to 31/1/2013?
11. Why
the 7 th Member was introduced in the Group then in January 2013 i.e.
after December 2012, the time limit granted to the Group for Report?
12. Why the Duplication of the terms of reference to a great extent--There are two Study Groups already formed earlier as Group to Formulate a Policy for Acquisition of Land or Building. Council Affairs/M-626/2012 3rd August, 2012 and Constitution of Groups on Centres of Excellence and pieces of land acquired in Rohini,
Delhi and I.P. Marg, Delhi. - Council Affairs/M-626/2012 4th August, 2012 and the part of terms are the same as given to present Group ?
13. Not
only the original agreement but the supplementary agreement also with
the Developers were clearly contrary to and defeating the above two
study groups objects of formation.
14. When did the Council agreed for amendment of terms of reference? The terms of reference to the Group as per the President in” Facts on the proposed project of Centre of Excellence at Nagpur 27/11/2012 “are as under--With
a view to facilitate systematic study &compilation of facts in the
form of a White Paper for COE project at Nagpur in particular and all
other projects other than Branch offices in general from 2004 onwards, a
six Council Member Group is
constituted by the Council at its said meeting.
15. Why the interim report by the Group presented on 10-12 January not informed to general members at large?
16. The Group has not reported the white paper on Nagpur COE.
17. The Group has not reported white paper on other infrastructure projects.
18. The
Group has not reported on the Process aspects for future and in fact
has requested for formation of another Group to decide future Process.
19. What was the basis on which the Group ascertained that the present project as per agreements needs not to be continued .
20. What was the basis on which the Group considered that the present project can not be discontinued in its entirty.
21. What is the basis on which the Group wants to curtail the size of the project? Have they ascertained that the Size of 1/10th and Location at Nagpur is right? Most important what is the basis for accepting the valuation for the 1/10th area? CRITICAL aspect is how the PROCESS be right for 1/10th area when it is not right for the 100% agreement area?
22. The Group has visited Hyderabad, Banglore, Jaipur, Nagpur and still not reported white paper on these properties. Is it fair?
23. How the Group came to the conclusion that there was an impasse as far as Nagpur COE is concerned which needs be resolved?
24. On what basis can the Group decide aspect like “to resolve the impasse in an amicable manner”?
25. Instead
of preparing the white paper how the Group is concerned with the larger
interest of Institute and Profession’s prestige, grace and also honor
of office of President of Institute and efforts to resolve the impasse
in an amicable manner which clearly is outside the purview of the Group?
26. Is
it not fair that the Council be assumed to be wise enough to draw
appropriate conclusions from the fact finding white paper and decide
further course of action?
27. Why
the Group has not reported the relevant authorities who failed on the
Process, Size, Location, Valuation and reporting to Council on all the
Projects as per terms of reference?
28. How
did the Group conclude without indicating the supporting basic
deviations that “the important aspects of Process, Size, Location and
Valuation have not been properly and fully addressed while finalizing
the Nagpur Project.
29. Why
the Group has not asked for further extension of time in reporting on
all the terms of reference rather than giving excuses like-
a. Other
aspects in respect of infrastructure projects are not being commented
upon in the Changed Circumstances including furnishing of information by
office and its examination by the Group and
b. Group
had earlier asked for information in respect of process followed for
acquisition of COE in the past. The replies have come at the fag end of
Group and due to paucity of time the same are not analyzed and commented
upon. and
c. Due
to paucity of time in analyzing the voluminous information, complete
study in this regard was not possible within the time available to the
Group
30. Terms of Reference have been totally ignored—
a. Item 1. --No white paper prepared on Nagpur COE and 12 Other Projects
b. Item 2. --No Comments given as to process for Costs ascertainment and escalation,, Process as regards the ICAI Regulations/ Council Approvals/ /Evaluation of Vendors/ Tendering process etc. or General items particularly
details of process followed in each of the 13 projects from 2004, the
ascertainment of need for infrastructure, Availability of Finance in future, Advantages of Township etc.
For Nagpur COE, only it is mentioned without displaying any any supporting papers that the Process followed was not strictly in line with the defined process and there is silence about Location and Valuation but only suggestion is that the Contract Size be curtailed without even justifying why even that much size is required at all at Nagpur.
c. Item
3.--The matter of recommendation of proposal for 10% area is not “any
other matter within the back ground and objectives for constituting the
Group”
d. Item 4.--Neither the facts nor the recommendations in respect of each of the project are given
31. The Group noted the large range of deficiencies (Item 5.1) in “One or the Other Projects” and project wise exact deficiencies are not indicated.
Most important aspect of DEVIATIONs in “AUTHORIZATION” or “APPROVAL” process have not been given at all, leave aside the project wise details. It is therefore difficult to identify the Responsibilities of the relevant functionaries.
32. The most important aspect of REASONS as to why THE original Contracts needs be Cancelled and scaled down for
Nagpur COE has not been explained in the Report. This is particularly
when the land prices are going up and developer wanted only a profit of
Rs.one per Square Foot.
33. The
offer of the Developer of 10% area is not merely “a part of the report”
of the Group as claimed by the Group, and in fact it is the only matter
referred qualitatively at the cost of entire terms of reference.
34. The
only important relevant remark in the report is that the important
aspects of the process, location, size and valuation have not been
properly and fully addressed while finalizing the Nagpur Project. This
is not shown to have been supported by proper supporting data references.
35. The Report does not indicate ‘what are the changes in the Scenario/Circumstances” and also why only “the perception of the decision making process of Secretary and President’ was seen and not “the actual defined process”.
Actions
36. It
is immediately necessary to hand over the investigation to outside
professional investigating agencies, obtain legal opinions in the mean
time to fix collective responsibility on all concerned functionaries,
recover indemnity letters and security deposits from all the concerned
functionaries.
37. The
report of the Group in its entirty and all the discussions at any of
the Study Groups/Committees or of the Council be displayed on the
official website of ICAI for information of Members at large.
38. The
report of the Group be rejected and its recommendation of curtailing
the contract size to 10% be totally rejected for various reasons
mentioned above.
39. The credibility and trustworthiness of the proceedings at
the council and its Study Groups along with the image of the profession
and the ICAI are at stake please.Immediate corrective actions are
therefore warranted.
40. I
look forward to hearing from you about the actions proposed to be taken
by you in this matter at the earliest please. I have been consistently
following up the issue with you and you may refer my earlier mails in
this context.
Thanking you,
Yours faithfully,
Shashikant Barve
A Member of Pune Branch of WIRC of ICAI
07/02/2013
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