The Anti-Corruption Commission (ACC) has dropped the investigation of alleged corrupt practices in price-fixing in gypsum export to Nepal involving State Mining Corporation Limited’s (SMCL) marketing specialist, and director of marketing and logistics.

However, if new information arises in the future, the ACC could resume the investigation, the commission stated in a press release.

In December last year, the ACC received a complaint against the SMCL’s marketing specialist and director of marketing and logistics alleging them of possible collusion and undue price-fixing in gypsum export to Nepal.

The complaint alleged that the two officials were directly involved in fixing the price and thereby enriching themselves by receiving the difference money from the importers from Nepal.

The ACC formally launched an investigation on March 12 this year.

According to the ACC’s press release on June 4, the investigation revealed that the Ministry of Economic Affairs (MoEA), on October 16 2018, authorised the SMCL to take over the operation of Khothakpa gypsum mining in Pemagatshel along with the infrastructure and staff of Druk Satair Corporation Limited (DSCL) for an interim period of two years from January 2019.

The mandate was assigned to SMCL primarily to ensure seamless business continuity, fulfil the requirements of the domestic industries and avoid loss of established market for Bhutanese gypsum. The SMCL adopted the pricing structure for the export of gypsum.

Based on the market study and intelligence gathered by the SMCL, the board approved the proposed revised rates for gypsum export by approximately Nu 200 per metric tonne and Nu 400 per metric tonne for both Nepali and Indian parties respectively last year.

The press release stated that the investigation found no involvement of the two alleged officials in determining the prices for the export of gypsum as the company’s major decisions, such as fixing mineral prices, providing strategic directions, and maximizing the company’s wealth and profitability, lie on the board of directors.

The marketing specialist and director of marketing and logistics are neither a part of the board of directors nor have any role in the decision-making process but are involved in operational functions of the company. “Given their roles, there is no evidence to suggest their influence or involvement in the price fixation favour the Nepal parties,” the press release stated.

As per the press release, the ACC found the rates of gypsum export to Nepal during the DSCL has remained the same at Nu 1,750 a metric tonne (MT) during the SMCL’s operation for three consecutive years from 2016 to 2018.

The ACC also found that the rate increased from Nu 1,750 per metric tonne in 2018 to Nu 1,775 per metric tonne in 2019 and Nu 1,975 a metric tonne in 2020 and 2021.

The press release stated that the allegation on the total export of 1,989,000MT of gypsum in the past three years was baseless as the total production of gypsum itself was approximately 905,153MT total gypsum production in 2019 and 2020.

“Of the total production in the last two years, the SMCL could only export 816,366MT of gypsum and generated sales revenue of only Nu 1.559 Billion,” the press release stated.

By Kelzang Wangchuk | Samdrupjongkhar

Edited by Tshering Palden