The Wire Impact: Railways Divest Key PSU Head Named in CBI FIR With 'Immediate Effect'

After 'The Wire' sent queries to the ministry's bodies, on October 15, the director of the Railway Board issued a letter saying Amitabh Banerjee will be divested of the charge chairman and managing director of IRFC 'with immediate effect until further orders.'

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New Delhi: Days after The Wire sent queries to the Railway Board and the Vigilance Directorate of the Railways seeking their response on why they had confirmed a full term for the chairman and managing director of Indian Railways Finance Commission in spite of a Central Bureau of Investigation FIR naming him in a multi-crore corruption case, the ministry has divested Amitabh Banerjee of charges “with immediate effect”.

The Indian Railways Finance Commission (IRFC) is a public sector unit. 

As per railway ministry sources, on October 15, Manoj Kumar, director of the Railway Board, issued a letter to the IRFC company secretary and the compliance officer in Mumbai, explicitly stating that “the competent authority” in the ministry had decided that Banerjee be divested of the charges of his post of chairman and managing director “with immediate effect until further orders” and sought its compliance as soon as possible.

The same afternoon, the company secretary and compliance officer asked Shelly Verma, director of finance at IRFC, to assume additional charge of the post from Banerjee, sources in the Railway Ministry told The Wire. She complied.

“Since IRFC is a listed company, such a compliance process is necessary if there is a change at the top level of the PSU’s management. This also needs to be informed to the Bombay Stock Exchange and National Stock Exchange,” a Railway Ministry source said.

By the evening of October 16 evening, the order was uploaded on both the BSE and NSE’s websites, thus making it a public document.

Amitabh Banerjee’s page on the IRFC website now contains a note on him having been “divested of the charges/duties” of the CMD’s post.

On September 26, The Wire had sent queries to V. K. Tripathi, the chairperson of the Railway Board, categorically asking why vigilance clearance was granted to Banerjee at the end of his one-year probation in October 2019 inspite of the fact that the CBI had named him as one of the prime accused in the Rs 144-crore corruption case at another PSU, Hindustan Paper Corporation Limited (HPCL) in March 2019.

Additionally, this correspondent had asked Tripathi through an email why Banerjee was still the authorised signatory for the PSU’s business matters – including the authority to pull out thousands of foreign currency from the Reserve Bank of India – even though there was an ongoing vigilance inquiry against him for misappropriating funds (including US dollars) as the chairman and managing director of the IRFC on as many as 30 counts. 

He was also asked as to whether he would confirm that the office of the cabinet secretary refused to clear Banerjee’s official trip to Singapore in April 2022 citing the same vigilance inquiry against him, which eventually forced the PSU to send Shelly Verma and another junior official of IRFC on behalf of the PSU. 

The Wire also reached out to Banerjee on the dame day – September 26. Banerjee denied all charges for which he was being probed by the Railway Vigilance Directorate since June 2021.

For more background and the details of Amitabh Banerjee’s reply, read The Wire’s exclusive story.

Having failed to elicit a reply from the Railway Board chairperson, The Wire wrote to Chandra Vir Raman, principal director of vigilance at the ministry, on September 30, seeking a response not only on why the department had cleared Banerjee’s probation period in violation of the guidelines set by the Central Vigilance Commission but also as to why there was tardy movement in filing a chargesheet in the ongoing vigilance case against Banerjee and some other IRFC employees. The case was filed in June 2021. 

While The Wire failed to prompt a response from Tripathi and Raman in spite of more than a two-week wait, the October 15 action of the Ministry has shown that the Railway Board and the vigilance directorate of the railways had suddenly sped up the vigilance case against Banerjee.

A source at the Ministry told The Wire, “The reason cited by the Railway Board to divest Banerjee of his position is the number of allegations of financial misappropriation committed at IRFC but the point to underline is also that, had the vigilance department of the railways taken note of the CBI enquiry against him and some others while posted at another PSU which ultimately had led to its closure, could this case at IRFC involving public money be avoided in the first place? The CVC proforma had clearly asked the vigilance directorate to check if there was any charge of misappropriating public funds against the officer in the last ten years before he was to be cleared for a full term.”

The charges probed by the CBI against Banerjee and some other officials of HPCL concerned buying bamboo, the raw material to manufacture paper, from Assam’s Dima Hasao district at exorbitant rates.

In due course, the two paper mills of HPCL in that northeastern state had to be closed down, leading to loss of employment to several hundreds. As per the worker’s union, over a hundred employees committed suicide unable to meet their financial needs.

Speaking to The Wire after the IRFC’s decision to divest Banerjee of his post became public, Manabendra Chakraborty, president of the joint action committee seeking justice for the employees of the paper mills said Banerjee’s removal should not be seen as compensation.

“An accused officer’s removal from post will not ensure justice to the people who suffered because of corrupt practices at the highest level of the PSU. As many as 109 workers have died due to non-payment of their salaries,” he said.

Chakraborty said that the CBI’s decision to file a closure report without accusing any person was “shocking.”

“Had the Central government which claims zero tolerance to corruption taken quick action then, both the paper mills and hundreds of jobs and lives could have been saved. We still demand that all the losses made to the PSU be recovered by attaching properties of those involved in the scam and punishment with rigorous imprisonment be meted out to them,” he added.