Udupi: The Brahmavar Dakshina Kannada Cooperative Sugar Factory has been hit by a major financial scandal, with an investigation confirming a loss of ₹13.92 crore in the sale of old machinery. Minister for Textile, Sugarcane Development, Sugar and Agricultural Marketing Shivanand Patil has given approval for criminal prosecution against the factory’s management board and ordered a departmental inquiry against two former officials.
The probe revealed that negligence and irregularities by the management board, the technical committee overseeing tender-cum-auction, and former managing directors Praveen B. Nayak and G. N. Lakshminarayana were directly responsible for the massive loss. The Cooperation Department has also directed that the financial damage be recovered from the guilty officers.
The scam came to light after allegations were raised by MLC Manjunath Bhandari and the Udupi District Farmers’ Association, prompting the government to appoint retired District Judge K. Radhakrishna Holla as the inquiry officer. His report confirmed serious violations of tender norms.
The management had sold the building and machinery to New Royal Traders, Chennai, but instead of adhering to the rules, they allegedly allowed sales on a per kg basis against tender guidelines. Records show that while 1139.37 metric tons of scrap were officially declared, in reality 2245.65 metric tons were removed, leaving ₹12.63 crore unpaid. In addition, building materials worth ₹1.28 crore were sold without proper accounting.
The sugar factory, established in 1985, stopped crushing sugarcane in 2003-04 due to shortages and lack of working capital. With machinery left idle for 17 years, the management sought to sell assets through auction. However, the irregular sale process has now led to criminal action being pursued against board members and technical committee officials.
Minister Shivanand Patil confirmed that strict measures, including filing criminal cases and departmental probes, will be initiated to ensure accountability.