IMS Scam

Creation of multiple companies by a single person is not unheard of in fraud cases. It is the unusually high profit, 200% at that on some products, pocketed by an accused in Insurance Medical Services (IMS) by creating four firms, is leaving people astonished.

Sleuths of Anti-Corruption Bureau (ACB) probing the IMS scam involving close to ₹1,000 crore public money found that one of the accused, Srihari Babu alias Babji, floated four firms. Omni-Medi, Omni Enterprises, Omni Healthcare and Legend Enterprises were created allegedly by him. A supplier of medicines and medical kits, the accused used to purchase products directly from the manufacturers and supply to others by taking some profit.

Suppliers make profits from 5% to 25% maximum. But the accused made more than 200% profit on products he had supplied to directorate of IMS! It is herefloating of four firms helped him to jack up price of a product and earn profit double the product’s cost.

A classic example is a medical kit called HemoCue, used to assess white blood cells, he had supplied.

Investigators found that the Sweden-based company making the kit was selling it for nearly ₹11,000. But the same kits were purchased by the IMS officials for ₹36,000 for each!

“The supplier would purchase first with one of the four firms, add some profit margin, and sell to second firm. And then to third and fourth,” the investigators said.

By the time the last of the four firms supplies the kits to the IMS office, the price of each kit would reach ₹36,000. It is not yet known if the IMS authorities were aware that the accused floated all the four firms and was minting money. However, the authorities laid hands on documents which suggest that the indent relating to kit supplies involving all four firms were signed in a couple of days.