Chandigarh Smart City Fund Scam: Internal Inquiry Uncovers Major Financial Discrepancies
The Chandigarh Municipal Corporation's internal inquiry has exposed significant financial irregularities in the transfer of Chandigarh Smart City Limited (CSCL) funds to the municipal body in March 2025. According to the investigation report, serious discrepancies have been detected in the financial amounts transferred during the handover process.
Massive Financial Mismatch Detected
The inquiry revealed a concerning mismatch of between Rs 20 crore and Rs 25 crore, including interest, when comparing CSCL's financial records with the funds formally transferred to the Municipal Corporation. Officials have indicated that this amount might undergo slight adjustments once complete reconciliation is conducted with banking institutions.
Initial investigations have uncovered that several fraudulent transfers allegedly occurred from CSCL's bank accounts at IDFC First Bank, Sector 32, even before the official closure of CSCL in March 2025. These funds were subsequently handed over to the municipal corporation as part of the transfer process.
Multiple Fraudulent Transactions Identified
The internal inquiry report has confirmed that three fresh fraudulent debit entries, collectively amounting to approximately Rs 8.22 crore, were identified within the MC's financial records. These transactions surfaced after CSCL funds had already been transferred to the municipal corporation, raising serious concerns about lapses occurring both before and after the official handover.
"The mismatch detected during reconciliation was extremely concerning," sources familiar with the investigation told media outlets. "Officials of the MC's accounts department failed to properly examine records during the handover and takeover of financial data from CSCL, leading to unchecked discrepancies."
Police Investigation and Disciplinary Actions
As the internal inquiry pointed toward suspicious roles of certain employees and IDFC First Bank officials, the UT administration has directed the Municipal Corporation to submit the Internal Committee's report to Chandigarh Police. The administration has instructed that a detailed investigation be conducted to identify officials and other individuals possibly involved in preparing fake fixed deposit receipts (FDRs) and forged bank statements linked to the scam.
A senior UT official confirmed that the findings of the internal inquiry have been thoroughly discussed with senior officers of the Chandigarh administration. The entire report will be handed over to police authorities within one or two days for further criminal investigation.
Comprehensive Audit and Bank Reconciliation
In addition to police involvement, the Municipal Corporation has written to the office of the UT Accountant General (AG), seeking a comprehensive audit of all financial records from before and after the transfer of CSCL funds. Sources indicate that the MC wants a third agency to independently verify accounts to ensure every aspect of the fund transfer is examined thoroughly.
Senior bank officials have been summoned and asked to complete detailed reconciliation of account statements in a time-bound manner to establish a clear financial picture and identify the full extent of fraudulent activities.
Key Findings from the Internal Inquiry
- Several fraudulent transfers of funds from CSCL's bank accounts at IDFC First Bank, Sector 32 Branch occurred before the closure of CSCL in March 2025
- Three fraudulent debit entries totaling over Rs 8 crore were identified after transfer to the Municipal Corporation
- Complete reconciliation of amounts will be conducted with IDFC First Bank
- The Internal Committee report will be submitted to police for detailed investigation regarding fake FDRs and bank statements
- The UT Accountant General has been requested to conduct a detailed audit of accounts before and after the transfer
- Disciplinary action has been initiated against three officials of the accounts branch found negligent in performing their duties
The internal inquiry has already led to disciplinary action being initiated against three officials of the MC's Accounts Branch who were found negligent in performing their duties during the review and handover of financial documents. The request for the AG's audit followed directions from senior UT officials involved in reviewing the inquiry findings.
