PAC pulls up Textiles Ministry for not taking immediate action in AEPC case

The Public Accounts Committee has pulled up the textiles ministry for not taking "immediate necessary" measures in a case where undue benefit was given to a private party by Apparel Export Promotion Council (AEPC).

According to the PAC report tabled in the Lok Sabha Wednesday, the Executive Committee of AEPC had extended unfair benefits in letting out office space at Bhikaji Cama Place to Teesta Urja Limited (TUL) in 2007, which resulted in a loss of Rs 17.42 crore to the Council.

"... the Ministry of Textiles had not taken immediate necessary measures to resolve the aforesaid discrepancy highlighted by audit," the PAC report said.

The report further said that the textiles ministry remained a "mute spectator" instead of taking the officials of AEPC to task.

The panel observed that while the AEPC had purchased the office out of the export promotion fund and fashion design cum office building reserve fund in 1991, with the grant from the government of India, the Executive Committee of AEPC has "miserably failed" in enforcing relevant financial rules.

The committee sought to know whether responsibility has been fixed against officials responsible for the lapses in discharging fiduciary duties and appropriate action taken against the officials.

Noting that an application is pending with the NCLT with regard to the management and functioning of AEPC, the panel sought to be apprised of the arrangements made by the textiles ministry to oversee the functioning of the council, before a decision on the matter is taken by the National Company Law Tribunal (NCLT).

The ministry in 2016 had asked the Corporate Affairs Ministry to appoint a government administrator and supersede the executive body of the council.

The Corporate Affairs Ministry has filed an interlocutory application before the NCLT.