Haffkine gets rap from CAG

Mumbai

The Comptroller and Auditor General (CAG) of India report on the financial statements of the Maharashtra government-owned Haffkine Biopharmaceutical Corporation Limited, has observed that the company not only failed to comply with the Supreme Court order in a tender process worth ₹52.80 crore but it also hid its own bank account opened in 2015, which resulted in the submission of the incorrect balance sheet to the legislature through the annual report, which could attract breach of privilege motion against the officials of the company.

The report titled comments of the CAG under section 143(6)(b) of the companies act, 2013, which is in possession of the The Hindu contains the supplementary audit of the Financial statements of the said company for the year ended March 31, 2020.

The report observed that the apex court had upheld the irregularities in the tender process of the company procurement of polio bulk in a case involving Haffkine, the contractor Bionet-Asia Co.Ltd and second-lowest bidder Nirlac Chemicals. The court had directed that the contractor shall purchase and the company should sell the remaining 66 million doses (worth ₹52.80 crore) of the 70 million doses of vaccines as per the confirmed order placed by the contractor with the company. This was to be completed by December 31, 2017.

“However the above transaction is not executed as on date,” said the CAG report, dated March 9, 2022. “The company stated that the contractor arranged for the sale of 80 million vaccine doses through UNICEF instead of purchasing the remaining 66 million doses of vaccine. Audit observed that the sale of vaccines to UNICEF was a separate transaction based on company’s offer (February 6, 2017) to sell vaccines to the UNICEF in response to the request for proposal floated by it,” it said.

In addition, the CAG audit has also found a bank account with ICICI bank opened by the company in June 2015 to collect tender fees and Earnest Money Deposit (EMD) from e-tendering process. “However this account was not disclosed by the company and the transactions therein were not accounted for till previous year (2018-19). The bank account had a balance of Rs 51.01 lakh as on March 2020, which was accounted for as a liability,” said the CAG report.

A source who shared the report with The Hindu said that being a state-owned company it has to present the annual report to the legislature. “All these years, the account was not part of it. This means all the reports presented to the state legislature were incorrect. It attracts breach of privilege of the legislature in addition to the contempt of the apex court,” the source said.

As per the procedure, state government does not reply to the comments of the CAG on financial statements of the company but the management and stationary auditor does. The final report available with The Hindu is prepared following inserting comments from them. HBPCL plays a vital role in development and production of a wide range of bacterial and viral vaccines for diphtheria, tetanus, whooping cough, plague, poliomyelitis and rabies. The Corporation also formulates pharmaceutical products, disinfectants, ointments, injectables, syrups and mixtures.