Gele­phu air­port con­trac­tor li­able to resti­tute over Nu 42.7mn

Business Bhutan - - Front Page - Chen­cho Dema from Thim­phu

The Anti-Cor­rup­tion Com­mis­sion (ACC) as­cer­tained that the con­trac­tor of Gele­phu Do­mes­tic Air­port, M/s T- Kun­zom Con­struc­tion and Hir­ing Ltd, is li­able to resti­tute to the state Nu 42.767mn in­clud­ing fines and penal­ties.

Ac­cord­ing to the ACC, the com­mis­sion has also formed an opin­ion

that the in­ves­ti­ga­tion has ob­tained suf­fi­cient ev­i­dence to prose­cute Gyem Dorji (en­gi­neer with the Depart­ment of Civil Avi­a­tion (DCA), Min­istry of In­for­ma­tion and Com­mu­ni­ca­tions (MoIC)), Dago Tsh­er­ing (Man­ag­ing Di­rec­tor of M/s T-Kun­zom Con­struc­tion and Hir­ing Ltd), and other as­so­ci­ated in­di­vid­u­als un­der ap­pro­pri­ate crim­i­nal charges.

Mean­while, ACC started in­ves­ti­gat­ing sus­pected bribery and col­lu­sion be­tween en­gi­neer Gyem Dorji and con­trac­tor M/s T-Kun­zom Con­struc­tion and Hir­ing Ltd in re­la­tion to the con­struc­tion of Gele­phu Do­mes­tic Air­port in 2011-2012 on Novem­ber 29, 2017.

Back in 2013, the Royal Au­dit Au­thor­ity (RAA) had also for­warded the Gele­phu air­port case to ACC. How­ever, the com­mis­sion de­nied to in­ves­ti­gate the case af­ter pre­lim­i­nary re­view as the is­sue in con­sid­er­a­tion ap­peared to be of ad­min­is­tra­tive na­ture. But in Au­gust 2016, the RAA re­ferred the mat­ter back to the com­mis­sion with cer­tain piece of ad­di­tional in­for­ma­tion, which im­plied pos­si­ble ex­is­tence of fraud­u­lent prac­tices sur­round­ing the sup­ply of cer­tain item. Also, there was al­ready an anony­mous com­plaint lodged with the com­mis­sion in­di­cat­ing cor­rupt pay­ment of Nu 1.50mn to the en­gi­neer by the con­trac­tor in ex­change for ma­nip­u­lat­ing the con­tract doc­u­ments to win the con­tract.

Mean­while, the MoIC, through an open ten­der­ing in June 2011, awarded the con­struc­tion of Gele­phu Do­mes­tic Air­port to M/s Tashi Kun­zom Con­struc­tion for a con­tract price of Nu 192.222mn with sched­uled date of com­ple­tion set in April 2012. At the end of the pro­ject, the to­tal cost es­ca­lated to Nu 271.556mn.

At the rel­e­vant pe­riod, Gyem Dorji, then Deputy Ex­ec­u­tive En­gi­neer was the Site En­gi­neer as well as the Pro­ject Co­or­di­na­tor. He was also in­volved in pre­par­ing the cost es­ti­mates for the pro­ject.

The pro­ject was soon caught up in con­tro­versy af­ter the RAA de­tected se­ries of ir­reg­u­lar­i­ties un­der­ly­ing the es­ca­lated cost, trig­ger­ing pro­tracted ar­bi­tra­tion and le­gal tus­sle be­tween the MoIC and the con­trac­tor.

One of the ir­reg­u­lar­i­ties on which the RAA in­vited the at­ten­tion of the com­mis­sion per­tained to sus­pected col­lu­sion sur­round­ing the es­ti­ma­tion and mea­sure­ment adopted by the en­gi­neer in re­la­tion to sup­ply­ing, fix­ing and lay­ing of con­certina wire over the 2206.66m perime­ter wall.

The in­ves­ti­ga­tion aimed to es­tab­lish whether or not there ex­isted any cor­rupt prac­tices in steer­ing the work to the con­trac­tor or af­ford­ing the lat­ter with priv­i­leged in­for­ma­tion, specif­i­cally, the es­ti­mate rate of con­certina wire from which the con­trac­tor du­bi­ously prof­ited over Nu 22mn.

Al­though in­ves­ti­ga­tion could not prove that Gyem Dorji trans­mit­ted the priv­i­leged in­for­ma­tion to the con­trac­tor at the time of the ten­der­ing, ev­i­dence showed that he had known about the mar­ket price of con­certina wire at the time of pre­par­ing cost es­ti­mate con­trary to his claim that he did not make ef­fort to con­duct price in­quiry. De­spite his knowl­edge that con­certina wire cost only Nu 75 per me­ter, he had in­flated his es­ti­mate us­ing Nu 450 per me­ter as per BSR 2009.

As al­leged in the com­plaint, the com­mis­sion’s in­ves­ti­ga­tion also re­vealed that some­time in early July 2011, a month af­ter the pro­ject started, the con­trac­tor drew two con­sec­u­tive cheques, one of Nu 800,000 and an­other Nu 700,000 out of its busi­ness Over Draft (OD) ac­count.

These two cheques were drawn in the name of its em­ployee, Pema Wangchen (de­ceased), the Fi­nance Di­rec­tor, but in­structed by the Man­ag­ing Di­rec­tor, Dago Tsh­er­ing to be paid to Gyem Dorji. The com­mis­sion’s in­ves­ti­ga­tion found com­pelling ev­i­dence from the com­mu­ni­ca­tion record which cor­rob­o­rated with the state­ment of one key wit­ness (also former em­ployee) who had been con­fided by de­ceased Pema Wangchen about Dago Tsh­er­ing’s in­struc­tion.

The same day when the first cheque amount­ing Nu 800,000 was drawn, Gyem Dorji pur­chased one sec­ond-hand Hyundai SUV cost­ing Nu 850,000. Few months later, he also bought a plot of land at Zom­lingth­ang, Gele­phu for Nu 1.350mn. Dur­ing the in­ves­ti­ga­tion, he and his rel­a­tives ei­ther gave mis­lead­ing state­ments or failed to ac­count or pro­vide con­sis­tent ex­pla­na­tion about the source of fi­nanc­ing of these as­sets.

The in­ves­ti­ga­tion also re­vealed that some­time in De­cem­ber 2011, Gyem Dorji cer­ti­fied for pay­ment of a forged in­voice of M/s Global Trader, Kolkata for pur­chase of con­certina wire at an in­flated rate of Rs 200 per me­ter. In re­al­ity, the con­trac­tor bought this ma­te­rial from an­other man­u­fac­turer M/s Shiva En­gi­neer­ing Co Pvt Ltd, Kolkata at Rs 5.95 per me­ter. The forged in­voice was passed with in­tent to ad­van­tage the con­trac­tor in ob­tain­ing Nu 6.619mn se­cured ad­vance when the con­trac­tor would have been oth­er­wise en­ti­tled to claim only Nu 196,944.85.

Ac­cord­ing to ACC, ev­i­dence proves that Gyem Dorji, at the time of cer­ti­fy­ing the forged in­voice, had prior knowl­edge that the wire should have come from M/s Shiva En­gi­neer­ing Co Pvt Ltd not from M/s Global Traders. Fur­ther, the fact that there had been many au­dit ir­reg­u­lar­i­ties in­volv­ing ex­cess and un­just pay­ments to the con­trac­tor re­sult­ing in the cost es­ca­la­tion stands to show that Gyem Dorji failed to per­form his pub­lic du­ties and re­spon­si­bil­i­ties.

The com­mis­sion con­cluded that omis­sion of his du­ties is, in part if not whole, was be­cause he so­licited and re­ceived cor­rupt fi­nan­cial ad­van­tage from the con­trac­tor which have trans­lated into his un­ex­plained as­sets.

ACC’s in­ves­ti­ga­tion also re­vealed that M/s Tashi Kun­zom Con­struc­tion had will­fully evaded Cor­po­rate In­come Tax through ma­nip­u­la­tion of cer­tain ex­penses dur­ing the tax fil­ing for the year 2012. It tran­spired that prior to fil­ing tax re­turn, Dago Tsh­er­ing had en­gaged his sub­or­di­nates (in­clud­ing some al­ready re­signed) to fab­ri­cate se­ries of muster roll sheets and falsely ex­pensed Nu 41.302mn. All per­sonal draw­ings by Dago Tsh­er­ing from the busi­ness ac­count were ex­pensed by ad­just­ing with fic­ti­tious muster roll pay­ments.

Ac­cord­ing to ACC’s in­ves­ti­ga­tion, the fraud was car­ried out with the help of one lo­cal ac­count­ing firm called Leo Con­sul­tancy who was hired to com­pile and con­sol­i­date fi­nan­cial state­ments for tax fil­ing pur­pose. In ad­di­tion to the fic­ti­tious muster roll expense, an­other Nu 15.957mn was charged in the fi­nal in­come state­ment on ac­count of iron and steel with­out any sup­port­ing doc­u­ment. These fic­ti­tious ex­penses re­duced the tax­able in­come by Nu 56.732mn, thereby de­priv­ing the gov­ern­ment of Nu 10.099mn in tax rev­enue.

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