An internal audit at Barauni Sudha Dairy, operated by the Deshratna Dr Rajendra Prasad Milk Producers Cooperative Union Ltd., has flagged alleged financial irregularities, procedural violations and suspected misuse of resources, including the reported use of vegetable oil in dairy-related operations.
Based on the audit findings, Barauni Dairy management has filed a First Information Report (FIR) against former in-charge Managing Director Ravindra Prasad and current chairman Vijay Shankar Singh at Fulwaria police station. Police have begun examining the audit report, tender documents and financial transactions.
Audit Raises Questions Over Procurement
The audit reportedly identified irregularities in procurement and payment procedures, including purchases made without following prescribed approval processes and allegations of financial loss to the cooperative.
Items cited in reports include chemicals, electrical materials, medicines, furniture, laptops and other supplies. The audit has also raised questions over procurement of food-related materials, including refined oil, with allegations that rules and internal procedures were not properly followed.
The reported findings remain allegations under investigation and have not been established as criminal wrongdoing by a court.
Alleged Irregularities in Vehicle Bills
The audit also reportedly identified discrepancies in vehicle hiring and reimbursement records.
One reported case involved a vehicle associated with the chairman's family. The dairy was allegedly charged ₹2,215 per day, compared with an earlier approved rate of ₹1,450, while the mileage calculation was also reportedly changed.
Another allegation concerns a travel bill in which a journey between Barauni and Varanasi, reportedly around 400 km by road, was allegedly recorded as 1,120 km, resulting in a bill of approximately ₹65,276.
Reports also say that a vehicle registration number appearing in documentation was found during verification to correspond to a different type of vehicle.
Questions Over Loans and Financial Management
The FIR reportedly includes allegations relating to loans obtained without following the cooperative's prescribed approval procedures.
According to reports based on the audit findings, approximately ₹100 crore in term loans and ₹110 crore in overdraft facilities were allegedly obtained, contributing to a significant debt burden and additional interest costs for the dairy.
The allegations are now part of the police investigation, and the reported figures should be understood as claims contained in the complaint/audit material rather than confirmed financial losses.
FIR and Further Investigation
Barauni Dairy management has reportedly submitted the internal audit report, a summary of allegations and supporting documents to the police.
The investigation is examining individual financial transactions, procurement files, tender procedures and other records identified during the audit. Recent reports said administrative facilities available to the chairman, including use of official stationery and a vehicle, were also restricted while files were taken into custody for examination.
For a farmer-owned dairy cooperative, the allegations are significant because financial governance and procurement practices directly affect the institution's ability to process milk, operate efficiently and protect the interests of its member producers.
The case remains under investigation, and the allegations against the individuals named in the FIR will be subject to the applicable legal process.
Source: Dairynews7x7 06 Oct, 2026 Read full story here
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