Chennai: A major scam involving the loss of several crores of rupees over nine years through the misuse of smartcards for purchase of subsidised goods, mainly groceries and liquor, from military canteens in Chennai, Bengaluru and Kadapa has been unearthed, top military sources said.

On July 2, 2015, documents available with TOI show, the Chennai military station commander in a complaint to police commissioner S George said grocery items and liquor, meant for defence personnel, were procured from military canteens illegally and sold in the local market with the help of touts.

It named the civilian touts, Army staff, canteen operators and executives of Noida-based Smart Chip Pvt Ltd (CIMS), the authorised firm for issue of smartcards for use in military canteens, as beneficiaries of the scam.

The complaint was then forwarded for further inquiry to the Central Crime Branch (CCB) of the Chennai police. On July 23, the CCB police registered a First Information Report in the scam, estimating the loss to the Army at ’60 crore but the actual loss could be much higher, the sources said. The charge that the city police were dragging their feet on the issue and hinted that the case may be handed over to the Central Bureau of Investigation.

Old smartcards deposited with CIMS for issue of new ones had to be hotlisted (blocked) to stop their misuse.But the firm violated this.

Since 2006-07, executives from CIMS head office and its Chennai branch with connivance of military canteen staff collected thousands of old cards in Chennai, Bengaluru and Kadapa in Andhra Pradesh and reactivated them for fradulent use, top military brass said.

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Source: TOI-Che