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Why CBI must investigate the NFDC scam, arrest and prosecute those who aided and abetted nepotism and loot 

The NFDC scam may not involve thousands of crores like 2G or the coal scam, yet the nature of the crime and the modus operandi is the same

In the last three articles in our NFDC EXPOSE series, we informed you about how the National Film Development Corporation (NFDC) officials, its MD Nina Lath Gupta, and senior bureaucrats in the Ministry of Information & Broadcasting (MIB) engaged in nepotism, corruption, and loot; tried to thwart attempts to investigate their wheeling-dealing; and treated NFDC as their personal fiefdom.

If you carefully look at the report of the MIB inspection team and its findings, it’s prima facie a case for deeper criminal investigation by the Central Bureau of Investigation (CBI) and arraignment of those who abused their positions to do undue favors to a few and to themselves, causing losses to the public exchequer.

The ambit of such investigation should include even past and present chairpersons and directors of NFDC, who let its top brass flout established norms by signing on dotted lines as NFDC board members, as quid-pro-quo for undue favors received by them. The case of the amorous chairman who got his ex-wife’s film 100% funded by NFDC is one of the examples.   The dubious role of the just retired secretary of MIB, Bimal Julka, should be part of this investigation too.

We informed you last week about how the Electronic Media Advertisement policy and norms were flouted by NFDC while releasing  advertisements of its client ministries, govt. departments, and sundry PSUs to TV channels. There was another area in which  the established norms set by the Central Vigilance Commission (CVC) were clandestinely and criminally transgressed. No govt. department can get away with such acts. However, the babus in MIB, for some inexplicable reasons, let these  pass too.

How NFDC flouted CVC guidelines on tendering, lied and acted ‘criminally’

Not following tendering guidelines prescribed by CVC and other conditions related to grant of funds to a wholly owned corporation of GOI is a very serious transgression for a public sector undertaking . What NFDC did was undoubtedly a criminal act. For similar misconduct in 2G and the Coal Block allotment scams ministers and bureaucrats have been sacked, jailed and being prosecuted for criminal conduct.

NFDC’s criminal subterfuge in Film restoration tendering process

The inspection team of MIB somehow could access a file related to the GOI’s Film Heritage Mission for a day. The file was taken back from them without any reason and explanation later. The team could just have a cursory glance over the file and that proved to be quite revelatory. 

NFDC was the nodal PSU for the film and sound restoration work under the Mission. Under the Rule 150 of General Financial Rules (GFR) and NFDC’s own rule book if the amount of the order/purchase is more than Rs.50 Lakhs, it must float an open tender. NFDC resorted to a criminal subterfuge here. Though the MD of NFDC was aware that the film restoration job order would be worth more than Rs.50 lakhs, she understated the amount to avoid the mandatory open tender process. As a vendor was selected through a closed bidding process, the NFDC officials submitted yet another proposal. They said that to expedite the job, they would need  additional vendors. The MD, based on the quote of the first selected vendor, issued new job orders to additional vendors.

Why did she want to avoid the open tender process if nothing fishy was involved? There was a reason for that. An open tender process would expose her to greater public scrutiny and that’s what she did not want. Moreover, it would not have left room for manipulation and blatant nepotism that became too apparent in one particular case. 

How a job was awarded to a vendor at double the rate of the lowest quote

The inspection team also discovered that personal discretion was exercised in selection of vendors against clearly defined CVC guidelines. There was a case where a particular vendor was inexplicably ignored and denied the job of sound restoration. He was found to be competent and had the wherewithal to do the job. He had also quoted the lowest rate. The job was awarded to another vendor at double the rate causing a direct loss of more than Rs.18 lakhs to NFDC.

This was a serious violation and a clear-cut case of administrative corruption that should have called for immediate suspension of the MD, and her arrest and a criminal investigation and prosecution by the CBI.  That did not happen as the new Secretary of MIB, Bimal Julka, took charge. For some strange reasons, known only to him, Julka chose to ignore the severe indictment of the MD in the inspection report of MIB and initiated an elaborate departmental process to save her. 

What prompted Bimal Julka to ignore the findings of the inspection team?

The CBI must examine what prompted the just retired Secretary MIB Bimal Julka to ignore the findings of the inspection team and its report that contained enough material and evidence for the CBI to start a criminal investigation and chargesheet the NFDC officials for corruption and abuse of their position.

Bimal Julka did not just ignore those findings, he also set in motion an administrative process to restore NFDC’s agency status  under the EMA policy, even before its malafide intentions and actions could be investigated fully. It was a deliberate attempt to hush up an obvious case of corruption and brazen nepotism, which in itself amounts to administrative malpractice. What was Julka’s motivation? Why did he go beyond his brief to help NFDC wriggle out of the tight spot it was in? In our view, the following points must be investigated by CBI:

  1. Bimal Julka should have ordered further investigations into NFDC affairs taking a serious view of its non co-operation with the investigating team. He did not do it and thus obviously neglected his responsibility as the Secretary, MIB. If that was not enough, he began the process of hushing up the matter.
  2. He hurriedly formed a committee consisting of Bhaskar Ghosh and Somi Tandon to examine the issue of suspension of NFDC’s  agency status  under the Electronic Media Advertising (EMA) policy of MIB and GOI and if EMA could be delinked from the ongoing investigations. This was a highly irregular move in view of the serious nature of the findings of the special investigation team.  It would also provide room to NFDC to whitewash its records and cover its nepotism and corruption tracks.
  3. One does not know if the Bhaskar Ghosh Committee ever deliberated on the matter. As per our sources, the committee simply signed on the dotted lines. The sole purpose of instituting the committee was to create a credible high profile alibi for restoring NFDC’s  agency status under the EMA policy. As per our latest information update, it has already been done, which is totally out of order. How can you reappoint an agency that has been found to be indulging in corrupt practices like blatant violation of EMA guidelines, overpayment to TV channels, and purloining the agency commission that should have been passed on to the client ministries?  What more, the investigations into the misdeeds of the agency have not yet started.
  4. It’s also clear that Bimal Julka took an extra-ordinary personal interest in the case. Why? What was the quid-pro-quo here? Why was he trying to save the NFDC officials? He even over-rode the opinion of his juniors in the process.
  5. CBI must also investigate the beneficiaries of NFDC largesse and if there were ‘kickbacks’ involved and who  received these. This will help CBI unearth micro-corruption of babus and officials. 
  6. So far, nothing suggests a direct involvement of the Minister I&B in the hush-up act, but it will be worthwhile for the CBI to investigate their involvement as well.

NFDC Scam is symptomatic of bureaucratic micro-corruption and maladministration that impact our governance and economy adversely

NFDC and hundreds of other government run and aided organizations and institutions are funded by public money. Bureaucrats and politicians use them as convenient conduits of micro-corruption, and nepotism. Organizations like NFDC are sustained through clandestine and foul means under one pretext or another. The bureaucracy invents justifications for their existence. There are a whole lot of ‘freeloaders’ and ‘mutual backscratchers’ who have been living off these organizations and establishments and who would want them to continue. These self-serving beneficiaries of the ‘unproductive’ establishment are like leeches and parasites.

Various organizations working under the auspices of the Ministry of Information & Broadcasting i.e. Films Division (FD), Children’s Film Society of India (CFSI), the Directorate of Film Festivals (DFF), NFDC, etc. have long lost their relevance and usefulness (We shall examine this in detail in our coming issues.). They are an unnecessary drag on precious public resources. They also perpetuate the legacy of micro-corruption, and maladministration and strengthen the debilitating and damning general perception - ‘Sarkari maal udaane ke liye hai’. 

The present government must act boldly and should go for a paradigm shift in its approach towards such organizations. The Prime Minister made a bold move and scrapped the Planning Commission. The Ministry of Information & Broadcasting should follow the same policy and route and act boldly and decisively.

Curious cases of NFDC funding for ‘That Girl In Yellow Boots’, ‘Shanghai’ and ‘Dabba’

NFDC receives grants from MIB to produce films in regional languages. This also provides room for co-production of films. Can  ‘That Girl In Yellow Boots’, ‘Shanghai’ and ‘Dabba’  by any stretch of imagination be considered regional language films and did  they actually deserve to be funded by NFDC? One does not know if any established procedure was followed before committing ‘public finds’ to such joint ventures.

 ‘Shanghai’ was produced by PVR Films. It’s unimaginable that Dibakar Banerjee will ever face a funds crunch with a producer like Ajay Bijli backing him. He has never had problems finding high-profile producers. Yash Raj Films produced his last film. He can get big production banners to back even films helmed by his assistants. Now, what came off the NFDC and Dibakar Banerjee deal? Nearly nothing except that the personal relationship of Dibakar and his writer Urmi Juvekar with Neena Gupta was further cemented. 

Likewise ‘That Girl In Yellow Boots’ is Anurag Kashyap’s film produced by Guneet Monga’s banner Sikhya and Anurag himself. NFDC gave Rs.60 lakhs to the film and was supposed to be its co-producer, which meant it would have a share in the film’s profit. A year after the film’s release, Guneet Monga returned the principal sum to NFDC and squared up everything. NFDC was no more the co-producer and Sikhya got an interest free-loan for a year, all at the cost of NFDC. It was a sweet, friendly gesture of Ms. Gupta towards a personal friend.

NFDC is one of the co-producers of ‘The Lunchbox’ directed by Ritesh Batra. The film did very well in the art-house cinema circuit and returned a cool profit. That’s what the producers claim. One does not know what was NFDC’s financial involvement in this film and  its share in the profits, if there was any. It can be said with certainty that the film did not actually need any funding from NFDC.

So, why did NFDC fund these films that already had their funding in place? They added neither to the bottom-line of NFDC nor served its noble goal of unearthing hidden regional gems. Though the inspection team of MIB presumes that these producers leveraged their NFDC association to get into the festival circuit, I don’t subscribe to that view. This was a typical case of ‘you scratch my back, I scratch yours’.

The MD of NFDC likes to hobnob and network with high-profile individuals and simply uses public funds to achieve that end. So, it’s not so much the NFDC brand as its money and free five-star travel and board, wining and dining that keep a whole lot of freeloaders in the art-house film circuit on good terms with her. They in turn spread the positive word, provide her limited access to a haloed circle, and help her in her personal PR. Among the freeloaders are a few journalists as well.

This has nothing to do with discovering talent. It’s all about becoming a round peg in a round hole, and part of a decadent establishment that has almost lost the capacity to discover true talent.

What is common to the funding of these films is that no norms were followed. All decisions were taken at the whims and fancies of the MD and a few NFDC officials, disregarding every financial and procedural norm.

Via Darjeeling - Another case of arbitrary & personalized decision-making

It’s the story Moxie Entertainments (P) Ltd. the producers of the film Via Darjeeling. The film was picked up arbitrarily for post-production funding. All established procedures were given a go-by while  the MD and a few of her pliant officials took the decision. NFDC became an equity partner, contributing Rs.70 lakhs to the  film’s funding; this  unusual arrangement was objected to by Pyarelal, the then Joint Secretary, Films, in MIB. After the initial approval of the board, the terms and conditions of the agreements were arbitrarily and irregularly changed as a ‘special’ favor to the producers. The NFDC board was never informed of those changes. In a most arbitrary and ridiculous manner, 50 prints of the film were ordered instead of one or two, at a cost of nearly 12 lakhs. Only one print was used. The film was not even released properly. The money just went down the drain.