Rs 700 crore medical procurement fraud: Delhi ACB arrests pharma distributor

New Delhi: The Delhi Anti-Corruption Branch (ACB) has arrested a pharmaceutical distributor in connection with an alleged Rs 700-crore fraud involving the procurement of medical equipment and hospital consumables for government hospitals.

The accused had allegedly left the country after the case was registered on June 2. He returned from the United States early Thursday and surrendered before the ACB. A city court later remanded him to four days of custody for further investigation.

The ACB had earlier declared him a proclaimed offender and issued a lookout circular against him. His arrest makes him the fourth accused to be taken into custody in the case.

According to investigators, the accused allegedly played a key role in bringing together private suppliers and officials connected with the Directorate General of Health Services (DGHS) and the Central Procurement Agency (CPA). The agency alleged that he set up four companies in the names of people known to him, including employees, and these firms subsequently received contracts to supply medical products.

The ACB has alleged that procurement procedures were not properly followed while awarding the contracts. The investigation relates to purchases of portable X-ray and C-Arm equipment, anaesthesia workstations, medicines, oral rehydration solution and surgical consumables.

An ACB official described the accused as a central figure in the alleged medical procurement scam.

Speaking to Hindustan Times, the official said, “We have already filed a charge-sheet in the case. The recently arrested accused is a mastermind in the entire multi-crore scam, as he was the prime beneficiary of the crime proceeds amounting to nearly Rs 750 crore. He had formed four companies, the owners of which were people known to him, including his employees. These four companies were awarded the contracts to supply the medical supplies. Even the basic norms were violated while awarding the contracts to the companies in question”.  

Another official said he had worked as a pharmaceutical distributor and medical supplies contractor for more than 25 years, and investigators believe his experience helped him exploit alleged weaknesses in the procurement system.

Three other accused, including the former director-general of the DGHS, former head of the CPA’s office and deputy controller of accounts (DCA) have already been arrested in the case that was registered on June 2.

The ACB registered the case after a complaint following searches conducted by the Delhi government’s Directorate of Vigilance at the CPA office. The agency is now examining procurement records, financial transactions and the alleged links between suppliers and officials.