3-member team to probe Aavin milk powder scam

When international milk powder prices came crashing down to Rs 120 per kilo in 2015, it resulted in Aavin stocking nearly 14,000 tonnes of the product as the milk major required Rs 200 per kilo to break even. To ensure that all avenues were explored and piled up stocks were cleared, Aavin took recourse to e-auction through the National Cooperative Dairy Federation of India (NCDFI) and floated tenders.

Srinidhi Enterprises, a Puducherry-based company volunteered to lift 2,000 tonnes to supply to Baba Ramdev’s Patanjali group. The agreement with successful bidder demanded that 2,000 tonnes be lifted within 30 days.

However, the bidder lifted only 800 tonnes at the then rate of Rs120 per kilo within the stipulated time and, despite reminders, sought extension of period for the remaining stock. Meanwhile, international prices went up to Rs.148 per kilo before he could take the entire stock he bid for. Yet, the institution allowed him to clear the balance 1,200 tonnes at the old rate which was a clear violation of tender regulation causing a loss of Rs 28 per kilo for the remaining 1,200 tonnes which worked out to Rs 3.36 crore. The fact-finding team would investigate why the 1,200 tonnes was offered at Rs 120 per kilo and running up a loss for the institution and why the tender was not cancelled or the equivalent in cash recovered from Srinidhi Enterprises when they delayed clearing of the stocks. though the lapse was detected and the official involved in the scam identified, no action was taken.

Aavin Managing Director DC Kamaraj, when asked when the fact-finding committee was expected to submit its report, only said, “I am not at liberty to reveal the details now.”

With international milk powder prices now at Rs 230 per kilo, officials feel that one way to clear the existing 8,000 tonnes stocks would be to ensure its use in milk products including chocolate, paneer and baby food or supply it to the state’s noon meal scheme.