SERIOUS FRAUD INVESTIGATION OFFICE RECOMMENDED AGAINST SESA GOA by Rupert Coutinho, Dubai

This is a welcome news to all the native Goans and the severely affected people and tribals who are battling against mining giants on various issues. Such gross violations and frauds amounts to cheating and stealing from Goa its rich resources and wealth which belong rightfully to its ethnic inhabitants.

While corporates continue to pocket these vast riches with the greed and frauds, the common and innocent people affected by the uncontrolled mining as well as overindulgence in illegal mining are reduced to a life of misery and hardships in terms of the ecological disaster surrounding them. This also includes the various severe impacts of dust pollution, acid mine drainage effects, uncapped tailings dams, radioactive radiation elements in the ore, sulfur dioxide contamination, damage to road infrastructure and well as agricultural lands suffered by the native Goans living in the vicinity of these areas.

In 2009, the SFIO was asked to investigate the affairs of Sesa Goa, following a report of the Registrar of Companies (ROC), which 'prima facie' found the company guilty of fudging invoices. After an investigation spanning over one-and-a-half years, The Serious Fraud Investigation Office (SFIO) recommended prosecution against the company and Sesa Goa's Managing Director, and the Company Secretary for violations under the Companies Act, 1956 on nine grounds, including over and under-invoicing of export/import of over Rs. 1,000 crore. SFIO has uncovered over-invoiced import receipts of coking coal by Rs. 14.6 crore and also sale of iron-ore by Rs. 42.51 crore, while under-invoicing exports by Rs. 1,002 crore.

Under-invoicing is normally done to avoid paying tax. Under the practice, companies mention in their records an amount less than what was actually delivered and pocket the difference.

This breaking news dragged Sesa Goa shares below 4% at the stock exchange. The SFIO has also alleged that Sesa Goa now owned by NRI billionaire Anil Agarwal made excess payment of agency commission to sales agent amounting to Rs. 40.6 crore to facilitate its exports of iron-ores to foreign buyers. The SFIO report named the sales agents which included Mitsui & Co (of Japan and Hong Kong), Nissho Iwai Corpn (Japan), Ahmed Jaffer & Co (Pakistan), and Arim Peks (Turkey).

The report also accused the company's independent directors and statutory auditor of non-cooperation with the investigations, and has also recommended prosecution on this basis.

I would sincerely request SFIO to also investigate seriously all the other mining giants in Goa wherein innocent tribals are facing regular harassment while the owners who are mostly the present MLAs continue to reaping huge benefits of this huge wealth without any social responsibility towards the Goan society.