When a trade deal between the importers and distributors over the Covid-19 test kits ran into litigation in Delhi High Court, the matter of a heartless corruption came into light. Indian Council of Medical Research (ICMR) had placed an order to buy 5 Lakh kits @600 per test (+ GST), 2.76 lacs kits have been delivered so far, while 2.24 lacs kits were about to land. Kits were being shipped in a bid from a China-based manufacturing company Wondfo Biotech to a Chennai based importer’s Matrix Labs Pvt Ltd. There seemed to be absolute anarchy in the procurement of these test kits. Why was ICMR purchasing test kits for Rs.600 per piece which was imported for Rs.245 only? The recent legal dispute in Delhi High Court raised a pertinent question.
What is the dispute?
The dispute arose after Matrix labs demanded upfront payment from Delhi based Rare Metabolics, the sole distributor of antibody test kits in India. It said the payment could only be made after ICMR releases the fund and a consignment of 2.76 lacs rapid antibody tests have already been supplied to ICMR for which payment is still due. The distributer in the case filed a petition in Delhi High Court for the release of the remaining 2.24 lacs test kits.
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What exactly is the case?
- Manufacturer, Wondfo Biotech provided test kits for 3$ each, which means the price of 1 testing kit is Rs.245 only including freight costs, thus 5 lacs kits amount to Rs. 12.25 crores.
- The ICMR engaged Rare Metabolics Life Sciences Pvt Ltd, a firm at Dwarka in Delhi to supply five lakh test kits for Rs.600 +GST each.
- Distributor, Rare Metabolics engaged Importer Matrix Labs to supply and enters into an exclusive deal. As per the exclusive deal, Rare Metabolics will be the exclusive distributor of the test kits in India imported by Matrix labs from China.
What a super deal! Chennai firm will import for Rs.245 and supply to Rare Metabolics @400 for each kit which will be further supplied to ICMR for Rs.600. The order given by ICMR to Rare Metabolics was to supply five lakh kits for Rs.30 crores when the actual cost was 12.25 crore only.
What did the verdict say?
Delhi High Court’s Judgment on April 24 by Justice Najmi Waziri said the profit mark-up of the deal is more than sufficient for the seller. Private gain must not outweigh the public interest in present circumstances and slashed price for every kit by 33% from Rs. 600 to Rs. 400 per test.
The Delhi High Court’s Judgment exposing the Covid-19 test kits purchase scam is published below:
However, the government’s apex medical body ICMR said that it has not made any payment for these supplies because the test kits did not meet ICMR standards, and had put testing on hold after some states red-flagged these faulty kits. A total of 716733 samples have been tested on 28 Apr 2020. ICMR decided not to accept any new consignment before it assess the efficacy of this testing method once again, which means the government does not stand to lose any money.
Such a mindset of profiteering exposes heartless uncouth crooks. Our country’s resources are scarce; we have to optimise them and not allow companies to make such arbitrage in these transactions. This is not only unethical but also immoral and cruel. The role of ICMR officials must be probed.
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