SC issued notice to Government on a plea challenging Appointment of Atul Kumar Rai as CEO of IFCI

The Supreme Court on 5 September 2011 issued notice to the government on a plea challenging the appointment of Atul Kumar Rai as the chief executive officer and managing director of the Industrial Finance Corporation of India (IFCI) despite his alleged involvement in corrupt practices.

An apex court bench of Justice Aftab Alam and Justice R.M. Lodha issued notice on a public interest litigation (PIL) filed by the Centre for Public Interest Litigation (CPIL). The CPIL accused Rai of financial irregularities. After Rai took over the reigns of IFCI he introduced the incentive scheme in August 2007 and, in the  process rewarded himself and his associates with hefty amount of incentives.

Referring to another instance of irregularities after the arrival of Rai in IFCI, the petition highlighted that the financial body purchased five percent stakes in a company at Rs.35 per share whereas the Union Bank of India and Bank of India bought these at Rs.10 per share.

The apex court had earlier observed that before a petition could be moved before it, the matter should go to the competent authorities, including high court. However, senior counsel Prashant Bhushan appearing for the CPIL mentioned that the peitioner did not approach different authorities but gave representations to various authorities, including the prime minister and MPs.

According to Bhushan the CPIL had no qualms about going to the high court but the apex court was approached first because the matter needed to be dealt with expeditiously.

While a huge amount of government money was going into IFCI, the institution was functioning without accountability. The court was told that the government had already pumped nearly Rs.5000 crore in IFCI.