Thiruvananthapuram: Ahead of the distribution of subsidised essential goods for Onam, middlemen have surfaced to broker illegal commission deals. Information reveals that a commission agreement worth ₹40 lakh has been struck solely for Consumerfed’s coconut oil procurement. Consumerfed purchases coconut oil exclusively from co-operative societies. Middlemen are securing these deals by leaking confidential tender price details directly from officials.

In Supplyco, the trade by middlemen is taking place through depot managers. Coconut oil is the only commodity that Consumerfed purchases without going through an e-tender process.

A total of 15 lakh litres of coconut oil is required for the Onam markets. Tenders are invited for this from co-operative societies that produce coconut oil. The societies submit their quoted rates and supply capacities "confidentiality" via email. The deadline to submit quotations was 3 pm on Thursday. However, even before a final decision was made, certain officials at Consumerfed reached an agreement to route 5 lakh litres of coconut oil through these middlemen. However, it is reported that information regarding the rate quoted by the government institution Kerafed was not leaked to the middlemen prior to the tender deadline.

How the fraud operates

Middlemen contact co-operative societies capable of supplying coconut oil. The deal is simple. They offer to secure the contract for the societies in exchange for a 3 per cent commission on total sales. To land the contract, the societies must participate in the tender by quoting the amount recommended by the middlemen. The final figure is decided at the last stage. Prior to that, officials at Consumerfed leak the rates from incoming email quotations to the middlemen.

Based on this information, the societies that struck deals with the middlemen are told what amount to enter in their quotations. Orders are then distributed among the lowest-bidding societies. In return, the societies pay a 3 per cent commission to the middlemen.

The quotation received from the societies, the contracts awarded to them, and the funds remitted into their accounts – everything appears meticulous on paper. The unique feature of this fraud is that neither the middlemen nor the colluding officials leave any trace to get caught anywhere in the process.

At Supplyco, the fraud is executed in a different manner. Depot managers have the authority to directly execute transactions up to ₹1 lakh. The operations of the middlemen leverage this loophole. Orders placed by depot managers with suppliers are routed through this cartel of middlemen, ensuring their commission. The shocking revelation is that these middlemen operate openly in the market, claiming to be close associates of government ministers.