APEC corruption: Smriti Irani approves appointment of govt administrator for apparel traders’ body

In a bid to curb “large scale fraud of government grants” in the Apparel Export Promotion Council (AEPC), Union Textiles Minister Smriti Irani has approved the proposal to appoint a government administrator to look after the management of the traders’ body. In a letter to Corporate Affairs secretary, Textile secretary Rashmi Verma says the Textiles Ministry has decided to appoint and “Administrator” who will take over the management of the Council “to protect public interest,” reports The Indian Express. The letter dated July 12 requests Ray to assess the possibility of superseding the existing executive body of the Council, provided in Section  397 to 400 of the Companies Act, by appointing a government administrator.

The Act has a provision under which the executive body of a Section 8 company can be superseded by government administrator. However,  such administrator can be appointed only through the Company Law Tribunal, which come under the Ministry of Corporate Affairs.The Indian Express reports that the Textiles Ministry has received a number of complaints against the functioning of APEC. Some of them include: malpractices in corporate governance, poor management of funds, “”misuse of Apparel International Mart” and “illegal leasing of office space” to a private company in Delhi.

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The ministry started the process of taking corrective measures in June last year. While several reminders were sent to APEC, the traders body has not been willing to improve its functioning, The Indian Express reports Verma as saying in the letter. The ministry toughened its stance against APEC after Irani was awarded Textiles portfolio in the Modi government’s Cabinet rejig last month.

On July 1, the APEC has informed the ministry that it was an autonomous body, hence it don’t want a government official as its general secretary. On August 2, the CAG had indicted APEC of providing Rs 17.42 crore “undue benefit” to Teesta Urja Ltd, a private firm. The CAG said that the tendering process for leasing out the office accommodation to the private company was flawed.

Set up in 1978, APEC is the official body of apparel exporters in the country.