IRS officer Prabhat Kumar explains a unique modus operandi used by a woman employee to dupe Pawan Hans Ltd

IN TODAY’S world, a scam worth Rs 1.30 crore does not make headlines. But the kind of modus operandi used by a lady contractual employee to dupe India’s leading state-run helicopter company Pawan Hans Ltd (PHL) for a period of five years between 2008 and 2013, is worth writing. Indian Revenue Service (IRS) officer Prabhat Kumar, currently serving as chief vigilance officer (CVO) in Pawan Hans Ltd, has given a detailed account of the lady assistant’s modus operandi in...
an article written by him in the aviation PSU’s in-house journal “Hansdhwani”.
Kumar writes: "For a small PSU like Pawan Hans Ltd (PHL), having an annual turnover of Rs 500 crore approx., the loss to the tune of Rs 1.30 crore becomes very significant. Since financial irregularities were committed by using a unique modus-operandi, the same is being shared so that such irregularities taking place in other bases of the company can be detected."
It all happened in Lakshadweep (Kavarati) base where pilots and engineers are made base managers which in turn are also the authorised signatories to operate bank accounts for meeting basic expenses. PHL’s two helicopters, leased to Lakshadweep administration, are maintained there, and PHL has to pay all landing and parking charges to Airport Authority of India. But mind it, the authorised signatories, i.e. pilots and engineers are not accountants by any stretch of imagination, and they show virtually no interest in financial transactions in the base.
The result? A lady assistant took advantage of the situation. She prepared cheques for making payment to AAI, but intentionally left anomalies like cutting and overwriting the payee names so that authorised signatories’ signatures are required again. She never got the cheques crossed as “account payee only”. "She used to go to Base Managers, i.e. pilots and engineers for getting their signatures on such times, when the aircraft was either ready to take off or just after landing so that she could get the signatures in a hurry," Kumar writes in the in-house journal. Showing excuse of overwriting, she got their signatures in such a way that she could later cut the original payee names i.e. AAI) and got that replaced with “self” so that cash could be withdrawn.
According to the arrangement with the local Syndicate Bank branch, a cash up to Rs 20,000 could be withdrawn in one go, but the local bank employees used to relax that norm, indicating that there could be involvement of the low-level bank employees too.
So, the amounts meant for paying as landing and parking charges to Airport Authority of India (AAI) were withdrawn in cash and got embezzled. “It is also surprising to note that AAI never raised any outstanding bills to PHL during the period of five years, during which swindling of money was taken place. This also indicates the culpability of officers of AAI posted at Lakshadweep (Kavarati) Base,” writes the CVO.
Significantly, the lady in question was a contractual employee.
Kumar’s article also carries a photograph of one such cheque to demonstrate how cheques are being misused. First, the cheque is not crossed as A/C payee. And then the payee name has been manipulated to “self” which appears to be countersigned by the pilot or engineer – the authorised signatory.