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.
Chencho Dema from Thimphu
