Ahead of the 2023 Karnataka Assembly polls, the state unit of the Congress has levelled serious allegations against BJP leaders, including Chief Minister Basavaraj Bommai, Union Finance Minister Nirmala Sitharaman, and Minister for Excise K Gopalaiah.
Armed with audio recording as alleged evidence, Congress has accused BJP leaders of taking kickbacks of ₹80 crore to grant permission for molasses export to a Mumbai-based company without following due process.
Based on the series of investigative reports published by The File, KPCC Communication Chairman and Chittapur MLA Priyank Kharge accused the chief minister and his colleagues of indulging in corruption and giving permission for the export of molasses to Mumbai-based KN Resources Pvt Ltd without verifying the GST details and license of the company.
Kharge told reporters: “There are two mandatory licenses (M1 and M2) a company needs to have for the transportation of molasses. M1 license is for domestic consumption, storage and transportation of molasses and M2 license is for storage, transportation and export. There has to be strict documentation to get the license.”
“The Mumbai-based company KN Resources Pvt Ltd does not have any relevant documents or license. Surprisingly, the government has given them all the necessary permissions to export molasses from Karnataka in just two months,” charged Kharge.
He further said: “Even the State Distillery Association has protested against the state government’s decision on giving a nod for the transport of molasses from Karnataka to other states, reasoning that the state might face shortage of molasses.”
“They also pointed out that domestic consumption is high. It will be difficult to reach the estimated target. It will also lead to huge revenue loss to the state government.”
“The state government has set a revenue target of ₹39,000 crore for the Excise Department for the 2023-24 fiscal year. It has set up a huge revenue target for the department and, on other hand, they also permit for the export of molasses from Karnataka. For whose benefit is the government doing this?” questioned Kharge.
He pointed out: “KN Resources Pvt Ltd has not paid Goods and Services Tax (GST) for the last three years. Even after this they applied for a license. Despite multiple discrepancies in their application, they were granted permission to export molasses.”
ಬಿಜೆಪಿಯವರು ಯಾವುದನ್ನೂ ಬಿಡದೆ ಲೂಟಿಗಿಳಿದಿದ್ದಾರೆ. ಅಬಕಾರಿ ಇಲಾಖೆಯಲ್ಲಿ ಕಾಕಂಬಿಯಲ್ಲೂ ಹಗರಣ ನಡೆಯುತ್ತಿದೆ.
ಮುಂಬೈ ಮೂಲದ ಕೆ.ಎನ್ ರಿಸೋರ್ಸಸ್ ಖಾಸಗಿ ಕಂಪನಿ ಬಳಿ ಯಾವುದೇ ದಾಖಲೆ ಇಲ್ಲದಿದ್ದರೂ ಎಂ1 ಎಂ2 ಪರವಾನಿಗೆ ಕೊಟ್ಟಿದ್ದಾರೆ.
— Karnataka Congress (@INCKarnataka) February 28, 2023
“The Finance Department issued an order of allotment of two lakh metric tonnes of sugarcane molasses from various sugar factories across Karnataka during the fiscal year 2022-23 and 2023-24 for export to KN Resources.”
“The company failed to acquire a mandatory license for the possession and storage of molasses in Karnataka, and their application lacked crucial documents such as company GST details, permission to transport and storage of molasses, and a history of permissions granted for dealing with molasses transport and export,” alleged Kharge.
“One metric tonne of molasses costs around ₹10,000 in the Indian market. The two lakh metric tonnes rough cost stands at ₹200 crore. The Mumbai-based company has said that they would export two lakh metric tonnes of molasses from Goa,” he pointed out.
“If it is legal, then they could have transported from the different ports of Karnataka instead of Goa. If they had been transported from Karnataka, the state government would have got tax revenue around ₹10 crore. When Karnataka has ports, why did they give approval for the export of molasses from Goa ports? Why did they do it in a hurry?” Kharge asked the BJP government.
“If the two lakh metric tonnes of molasses is estimated to be about ₹200 crore, the BJP’s standard commission rate is 40 percent. They have cut a deal about ₹80 crore in this,” accused Kharge.
“A complaint has also been registered with Lokayukta on these irregularities. CM Bommai has reportedly held talks with the minister for excise, excise commissioner to clear this file. Even the Union finance minister gave a recommendation letter to clear this file and two BJP MPs are also part of this.”
“These allegations are not made by me. A molasses transport contractor and an employee of KN Resources Pvt Ltd were talking over the phone on how they got license for the overseas export of molasses,” alleged Kharge.
To substantiate the allegations, Congress released the 4.5 minutes purported audio clip of molasses transport contractor Shivaraj and KN Resources Pvt Ltd employee Suresh Ghate purportedly having a conversation over the phone.
In the audio, Suresh is purportedly heard saying: “From Molasses purchase to transportation and getting necessary license from Excise Department is looked after by me. KN Resource Pvt Ltd company is worth ₹3,000 crore. Of the eleven directors in the company, two are BJP MPs, who are big shots. They directly spoke with Bommai to get the necessary license.”
“They also have a Union minister for finance recommendation letter. MMC pressurised the commissioner not to give permission. I was with them. Bommai himself cleared all the hurdles. Even we got the permission to export from Goa,” Suresh is heard telling Shivaraj.
Excise minister refutes allegations
Dismissing the allegations of Congress, Minister for Excise K Gopalaiah told South First: “Ever since I took charge of the Excise Department, I have worked effectively and sincerely.”
“The excise commissioner and Finance Department officials have verified all the licenses and documents before giving No Objection Certificate (NOC) to KN Resources Pvt Ltd.”
“How can the senior officers give NOC to a company without verifying their documents? It is highly impossible. Congress is making baseless allegations against the finance minister and chief minister. We have not received any commission while giving a nod for the company,” Gopalaiah said, adding that the authorities concerned have followed due process.
On the State Distillery Association protesting against this order, he said: “We have sufficient stock of molasses in Karnataka. There are about nine lakh metric tonnes of molasses in stock. The distillery companies will not be able to utilise the available stock fully.”
“The government will not face any kind of revenue loss. We can generate revenue from other sources as well. The grand old party does not have anything against the BJP to fight in this poll. It is just a political gimmick by the Congress ahead of the Assembly polls,” charged Gopalaiah.
On the allegations of involvement of Bommai and his son, Gopalaiah said: “Neither the chief minister nor his son has interfered in my department. We have not indulged in any kind of corruption or scam in this.”
“The decision to export is completely left to the respective companies. The government cannot interfere or direct any company to export molasses from Karnataka. Our responsibility is only to provide licenses and give NOC to the companies,” the excise minister said, clarifying the government’s stand on the matter.
Complaint filed with Lokayukta
Lancha Mukta Karnataka Nirmana Vedike has filed a complaint with the Karnataka Lokayukta against KN Resources Pvt Ltd and the Excise and Finance departments.
In the complaint, the forum has alleged: “The unethical and corrupt practices being carried out by the officials of the state Excise and Finance departments.”
“A large-scale corruption by allotting a Mumbai-based exporter two lakh metric tonnes of molasses produced in Karnataka to export from Goa port, with an ulterior motive of diverting cargo,” read the complaint.
They also alleged that a series of letters have been written to the excise commissioner requesting that permission be given to KN Resources to procure molasses. Despite not having the right license and permissions, the company has been given necessary permission, the complaint said.