Another case of favouring son's company surfaces against Delhi Chief Secy Naresh Kumar

New Delhi: In more trouble for Delhi Chief Secretary Naresh Kumar, an allegation of giving tender to MetaMix Technologies Pvt Ltd, where his son Karan Chauhan is a founder to develop AI software for ILBS hospital without issuing any tender, has surfaced.

According to sources, Naresh Kumar, who is also the Chairman of the ILBS Hospital, gave the work to develop AI software without any tender to MetaMix.

According to the Delhi government sources, another tendering irregularity came to the fore after a note was received from Chief Minister Arvind Kejriwal on November 10, forwarding a complaint received from one complainant alleging irregularities in compensation awarded by the erstwhile DM (Southwest District) Hemant Kumar in a land acquisition matter in Bamnoli village under NHAI's Dwarka Expressway project on May 15.

The source said that in the course of the inquiry by Vigilance Minister Atishi, it was further discovered that Chauhan is also the Founder or Director in a web of companies, many of which have been awarded contracts by government agencies, including in Delhi.

“The investigations in the NHAI land acquisition matter and the complex web of undisclosed commercial relationships have given rise to a reasonable suspicion that the Chief Secretary may have unduly favoured other companies associated with his son, or may have used his power and influence on other persons to accrue unlawful benefits to the companies associated with his son,” the source said.

“One particular relationship that was unearthed in the inquiry was that Chauhan is the founder of a company called MetaMix Technologies Pvt. Ltd (hereafter called 'MetaMix). This company was founded on May 10 last year by Chauhan, Anish Sarin, also promoter of Anant Raj Limited, which is also involved in the commercial relationships discovered in the NHAI land acquisition case and Saksham Harivyasi,” the source said referring to the preliminary report by the Vigilance Minister.

It has also been brought to the notice of the undersigned that MetaMix has been working with the Institute of Liver and Biliary Sciences (ILBS) as an esteemed knowledge partner and is developing a research lab in ILBS.

“A Memorandum of Understanding (MoU) for the partnership between MetaMix and ILBS was executed on January 25 this year,” the source claimed.

The source said that during the preliminary probe by Vigilance Minister revealed that “from the examination of all existing records and relevant information in the public domain, it is apparent that the Chief Secretary, who is also the Chairman of ILBS hospital has used his position and influence to enable his son’s startup MetaMix to gain huge financial benefits, industry experience, reputational gain and other intangible benefits from a government body, whose decision-making process he directly controlled".

“In a textbook case of nepotism, Chief Secretary influenced the resources and expertise of ILBS to be used to develop MetaMix’s technology free-of-cost, even getting ILBS to play a role in promoting and marketing the technology. All of this was achieved through signing of a MoU on a nomination basis with MetaMix… which has been modelled as an all-in-one success recipe for Naresh Kumar’s son’s startup,” the source said, mentioning the report.

The source further stated that while signing the MoU with MetaMix, ILBS agreed to provide unrestricted access to valuable datasets, case data and set data that are crucial for developing augmented reality models, which no other private company can access for free.

The source said that the report mentioned that data is the most precious asset of institutions of eminence in healthcare such as ILBS and can be easily valued at billions of dollars. “MetaMix has therefore provided huge illegitimate profits at the cost of the public exchequer since ILBS has received financial support of Rs 1,350 crore from the Delhi government over the last 10 years,” the source said, stating the findings of the report.

The source further said that ILBS also agreed to sponsor its doctors and provide free medical expertise to MetaMix, while any other tech company would have to pay money to avail such expertise.

The MoU also provided MetaMix access to the 3500 square feet office space at the Virtual Reality Lab of ILBS, which amounts to a direct financial benefit of Rs 1.44 crore in terms of free commercial space, at the cost of public exchequer, the source said.

“Incidentally, the VR Lab was newly built and inaugurated by the Chief Secretary cum Chairman-ILBS on January 14, just 10 days before the signing of the MoU between ILBS and MetaMix,” the source claimed.

The source referring to the report said that there was a clear and premeditated intent on behalf of ILBS officials, acting under the influence of its Chairman and Chief Secretary to decide to set up Virtual Reality or Augmented Reality Labs at ILBS in their 51st Governing Council meeting on December 16 and immediately, on the next day moved the file for approval of MoU with the startup of Chief Secretary’s son with practically “no due diligence” carried out of the “technical competence” of the company.

He also stated that the MoU was expeditiously signed on January 24 this year without even obtaining approval from the legal advisor of ILBS or the competent authority, who approved it months later on March 7, 2023.

The source again referring to the report stated that MetaMix was founded on May 10 last year and it was surprising that in a short duration of merely eight months, the company was able to land such a prestigious, high-stakes, and potentially lucrative collaboration with one of the premier medical science institutions of the country and Asia, despite lacking any kind of special expertise or prior experience in advanced healthcare diagnosis or development of AI or virtual reality algorithms at the cutting edge.

“The Principal Investigator from MetaMix for this research collaboration was their 27-year-old Founder with a BSc in Finance and no prior experience in carrying out any advanced scientific research. The fact that no due process was followed while selecting MetaMix on a nomination basis and a project of such significance requiring advanced technological know-how was given to a fledgling startup with no prior history of working in this space points to a clear attempt to provide undue benefits to the people associated with the company,” the source said quoting the report by Vigilance Minister.

He also said that ILBS built its assets -- database, medical expertise, research and credibility -- with the resources given by the Delhi government and these assets were meant to be used only in the public interest.

“So their use by MetaMix to develop a commercial AI-based technology is effectively using the public exchequer for private gain. However, this loss to the public exchequer is doubled, since these assets could have been monetised by a process of competitive bidding. Private companies would have spent large sums of money to access these ILBS assets,” the source said, quoting the report.

“This would have meant the inflow of money into the public exchequer. However, ILBS headed by its Chairman and Chief Secretary Naresh Kumar, made these assets available free-of-cost to MetaMix, his son’s startup,” the report by the Minister alleged.

“The findings give rise to a reasonable belief that Chief Secretary Naresh Kumar has abused his position as the Chairman of ILBS to obtain the arrangement with ILBS for his son’s startup, MetaMix,” the source said referring to the report.

The source also said that as per the report the Chief Secretary has failed to disclose his conflict of interest arising from his official duties in the Governing Council with the company in which his son has a financial interest. In this context, Rule 4(3) of the All India Services (Conduct) Rules, 1968 may also be taken note of.

“Thus, prima facie it appears that Naresh Kumar has acted in violation of the AIS Conduct Rules and has used his position to enable a lucrative collaboration for his son’s company, at a loss to the public exchequer. If ILBS’ expertise and database were made commercially available through competitive bidding, large sums of revenue would have accrued to the Institute. Instead, it was provided free of cost to a 7-month-old startup, with no experience or expertise. This loss to the public exchequer must be investigated further,” the source said referring to the report.

Calls and messages by IANS to the Chief Secretary for his comments remained unanswered by the time of filing this report.