Akshaya Patra Foundation under the scanner

The recent resignation of all independent trustees of the Akshaya Patra Foundation, along with several allegations levelled in a letter by a member of its internal audit committee, cast serious doubts on the integrity of the Foundation’s activities.

Students served by the Akshaya Patra Foundation at Mysuru, at an event commemorating the cumulative serving of three billion meals in February 2019.

For many years now, the Akshaya Patra Foundation (APF) has been criticised for imposing its choice of an upper-caste Hindu diet on lakhs of children in government and government-aided schools across the country through its partnership with the Mid-Day Meal Scheme (MDMS). While the choice of diet is ideologically driven and problematic , explosive revelations that have emerged after the leaking of a letter written by a member of the internal audit committee—following the recent resignation of all independent trustees who were part of the APF Board—have cast serious doubts on the integrity of the APF’s activities.

The APF was founded more than 20 years ago with the vision of ensuring that “no child in India shall be deprived of education because of hunger”. According to information available on its website, the APF “started the Mid-Day Meal Programme in June 2000 by serving mid-day meals to 1,500 children across five government schools in Bengaluru, Karnataka.” From these humble beginnings, the APF has scaled up to provide more than 18 lakh meals daily across 12 States and two Union Territories of India, which means that it caters to the needs of slightly more than 1.5 per cent of the 11.59 crore children enrolled in the scheme across the country. It does this through 52 centralised kitchens set up in different parts of the country. Among Indian States, it reaches the largest number of schoolchildren in Gujarat and Karnataka, where it provides meals to around four lakh children in each State through 2,169 and 3,008 schools respectively.

Serious allegations over governance issues came to light after four independent trustees, all marquee names in the Indian corporate world, resigned this year. The first to depart was Abhay Jain, a founding trustee, who submitted his resignation in February, severing his almost two-decade association with the APF. Jain is at present advisor to the Manipal Education and Manipal Group (MEMG) and was formerly associated with the Aditya Birla Group. The other three trustees, who resigned in October, are Mohandas Pai, founding trustee of the APF, former chief financial officer (CFO) of Infosys Limited and current chairman of Manipal Global Education Services; V. Balakrishnan, trustee of the APF since 2006 and former CFO, Infosys; and Raj Kondur, trustee of the APF since 2002 and co-founder of the private equity firm ChrysCapital. Mohandas Pai was arguably the most visible face of the APF who, with his frequent public engagements endorsing Hindutva, also bolstered the APF’s ideological moorings.

In a statement to mediapersons, Mohandas Pai attributed his resignation to “non-addressal of serious governance issues” and “overriding the views of independent trustees by having insiders make up the majority of trustees in the very recent past”. The details of the gaps in governance issues that Mohandas Pai refers to can be gleaned from a hard-hitting letter written by Suresh Senapaty, former CFO, WIPRO, and member of the internal audit committee (AC) at the APF. (A copy of this 3,500-word letter is in Frontline ’s possession.) The veracity of this letter was confirmed by Abhay Jain, who said that it was “…written by Senapaty and endorsed by two other members of the audit committee, V. Balakrishnan and Raj Kondur.”

The AC began to investigate a variety of issues at the APF in late 2019. Before stating the findings of the audit committee in detail, Senapaty writes: “While it was my belief as an outsider that highest governance standard prevailed in the Foundation, after I took over the responsibility in the AC, I noticed various gaps/ shortcomings, which in my view were and are serious enough to dent the image of the Foundation.”

The allegations

He goes on to list these “gaps/ shortcomings” in detail, the first of which is “conflict of interest”. Senapaty writes that the Hare Krishna Foundation, ISKCON Bangalore, and Touchstone Foundation “are related parties of the Foundation [APF] since the Chairman and Vice Chairman exercise control by virtue of their position as executive members in such Trust or through their religious missionaries.” The fact that the APF is an independent NGO is often forgotten in public perception as it is closely linked with the International Society of Krishna Consciousness (ISKCON) in Bengaluru, which is reflected in the membership of the APF’s Board which has both missionaries from ISKCON and independent trustees. Madhu Pandit Dasa and Chanchalapathi Dasa, the chairman and vice chairman respectively of the APF, are also on the governing council of ISKCON Bengaluru. Observing that “missionaries of the Temple Trusts also serve as Unit Presidents of the Akshaya Patra”, Senapaty writes that the “missionaries are mostly found to be in full control without corresponding accountability on efficiency, compliance, systems and controls to the formal organisation of Akshaya Patra.”

As a result of this “intertwined relationship”, there is “absence of proper ‘arm’s length’ consideration test and apparent conflict of interest.” This, as Senapaty explains, means that “the line of demarcation between the Foundation and Temple Trusts in committing and incurring expenses for running of the specific unit, collection of donations, vehicle expenses, associated costs for fund raising, sharing of rented premises, fund raising has been blurred…Many instances of improper recording and reporting were noticed as gaps of serious nature.”

Senapaty reiterates: “There are no records and credible audit trail for the use of the kitchen of the Foundation by the Unit Presidents for the Temple Trusts, though the usage has been over the years across units/locations. Usage of the kitchen including movement, storage, consumption of goods, movement of people, movement/use of assets in and out of the kitchen for the benefit of Temple Trusts is not an appropriate application of the funds of the Foundation and is liable to scrutiny by the Tax authorities for the exemption claimed by the Foundation on the donation received unless arm’s length consideration is demonstrated and recorded in books.” He adds: “It is unbelievable that this practice is in vogue across all the kitchens and not to attribute such action/decision to central leadership’s knowledge may not be fair.”

Senapaty’s letter also mentions whistle-blower complaints: “Over the past two years, several whistle-blower complaints were received regarding the functioning of the Units/Unit Presidents of the Foundation. After due investigation, in almost all cases, it has been established that there have been wrongdoings on the part of Unit Presidents and/ or other missionaries.”

Senapaty points out problems with regard to “compliance related aspects” as well:

a) “many kitchens do not have ETP [Effluent Treatment Plant] to comply with environmental regulations

b) terms of MDM relating to delivery of food within stipulated hours and temperature prescribed

c) maintaining hygiene in the kitchens such as sweating of the kitchen [sic] in VK Hill while cooking, quality of water input in some kitchens being used for cooking and many others.”

Senapaty also states: “[The] cost per meal for Akshaya Patra has always been a concern. Costs are far higher than any other similar organisation for a similar meal”. He adds: “[The] collection of donations by missionary personnel is fraught with vulnerability. They collect donations for their own religions trusts as well as for AP. It is difficult to assess diversion which gets more complex given the fact that their understanding of concepts like ‘conflict of interest’ and ‘related party transaction’ to be at arm’s length with approval from independent AC is lacking. An investigation at Rajasthan did reveal collections by related party either not given to Akshaya Patra or passed on very late. Related party using up such amounts collected or use for their own purpose is not appropriate. Expenses incurred around these activities such as vehicle, fuel, cost of driver is also a big question in terms of fair allocation and sharing. No proper process preapproved by AC has been in place except in principle discussions around last year which is yet to be completely implemented.”

Some of the findings of the AC were corroborated by Abhay Jain who, in a brief interview with Frontline , said: “They [missionaries] have done it [blurred the accounts] smartly. If someone demonstrated willingness to donate to APF, they have convinced him to donate 75 per cent to the temple [ISKCON] and 25 per cent to APF. They have messed up everything and that’s why I resigned. I was fed up of all of this.” On a more specific question of whether temples have been constructed on government land provided to the APF for setting up centralised kitchens, he said: “Everything has come up.” Two other letters, written by an independent trustee who resigned and by Madhu Pandit Dasa, chairman, APF, are also in Frontline ’s possession and they corroborate the findings of the audit committee.

The serious charges by a member of the AC who has thoroughly examined the APF’s accounts reveal that, potentially, money collected for the purpose of providing mid-day meals may have been diverted by ISKCON and its local units for temple activities. Thus, funds collected from the government (through subsidies in cash and grains and capital expenditure grants), corporate donors (through CSR, or corporate social responsibility initiatives) as well as individual donations, both Indian and foreign, may have been misused by the missionaries for activities of a religious nature. While the scale of the diversion of funds is hard to quantify without a thorough probe, according to a report in Mint that cited an anonymous source, “it could be Rs. 10 crore, Rs. 50 crore or Rs. 70 crore.”

APF’s response

The APF responded to these significant revelations in two ways. First, it swiftly accepted the resignations of the independent trustees. A new board of trustees was reconstituted by November 14 with K.V. Chowdary (former Chairman, Central Vigilance Commission), Anil Swarup (former Secretary, Ministry of Human Resource Development) and M.S. Unnikrishnan (Chief Executive Officer of IITB-Monash Research Academy) brought in as independent trustees. Second, it appointed an independent committee headed by Chowdary and Unnikrishnan on November 20 to look “into all the issues raised by the erstwhile trustees and Audit Committee members”.

When such serious charges have been levelled against the Foundation, the independence and impartiality of an “independent committee” headed by APF trustees is questionable. Navina Narada Dasa, the head of communications at the APF, told Frontline that “at this point I can’t say much except that specific questions regarding the charges will be answered in the next few weeks.”

According to the Income and Expenditure account of the APF for 2018-19, over Rs.248 crore was collected through donations in that financial year while government subsidies brought in Rs.217 crore. If the cost of each APF meal is broken down, it shows that 41 per cent is provided by donations while government support provides 59 per cent of the input cost. Thus, it is evident that the APF is a custodian of public money and should be answerable to any questions raised on its financial integrity.

These explosive revelations were made over the past two weeks, but there is silence on the issue in Bengaluru where the APF is headquartered. The APF is the largest NGO partnering with the government in the flagship MDMS scheme under the aegis of the MHRD, and has a prestigious cachet in Karnataka. In Bengaluru, for example, at all the schools under the purview of the Bruhat Bengaluru Mahanagara Palike (BBMP), mid-day meals are provided by the APF. Perhaps the silence around the APF owes to the tremendous influence that the organisation wields among cross-party politicians, bureaucrats and corporate sympathisers.

Only one politician, Lahar Singh Siroya, a Bharatiya Janata Party (BJP) member of the Legislative Council (MLC) in Karnataka, had responded to the issue at the time of filing this story. In a letter addressed to Madhu Pandit Dasa, Siroya pointed out that there was a “conflict of interest” in appointing trustees of the APF as heads of the independent committee. He suggested: “In the best interests of justice it would be better that the probe panel has men/women of equal high calibre but no past or present association with either the Foundation or ISKCON Bengaluru.” He added that the Foundation could be temporarily handed over “to an independent administrator.” His last paragraph hints at the scope of the huge multi-agency probe that must be conducted to unearth the depths of impropriety at the APF. It reads: “In fact, the nature of the probe falls in the jurisdiction of multiple federal investigation agencies like the Income Tax Department, the Enforcement Directorate and the Central Bureau of Investigation.”

In the APF’s comforting mix of spirituality and business interests, one can see that it stands as the epitome of the ideal NGO under the Narendra Modi regime where the interests of the Hindu right wing and large corporations converge. Mohandas Pai, for instance, has stubbornly endorsed the APF’s choice of a sattvik diet (food prepared without onion and garlic) in contravention of nutritional norms set by the Karnataka government. This rigid choice, activists have argued, affects the calorific requirements of lakhs of children.

Last year, when a report (https://www.thehindu.com/news/national/karnataka/why-are-karnatakas-schoolchildren-unhappy-with-the-mid-day-meal/article27378176.ece) was published in The Hindu on the issue, Mohandas Pai’s initial disagreement with the story led to an avalanche of trolls descending on the journalist on Twitter, thus restricting the space for legitimate questions to be raised about the APF. Most of the objections to The Hindu article stemmed from two perspectives: first, that it was anti-Hindu to question the sattvik diet and second, that the children should be happy with the benevolent work of the APF.

The concern displayed about “compliance issues” in Senapaty’s note clearly shows that the assiduously built public corporate image of the APF, which is that of a provider of competitively priced hot, cooked, hygienic meals, has been shattered. Thus, to privilege a “corporate solution” and the PPP (public-private partnership) model, as many supporters of the APF do, clearly does not automatically ensure quality.

In light of these staggering revelations, activists like Siddharth Joshi, an independent researcher associated with the Right to Food Campaign in Karnataka, have raised certain crucial questions about the model of centralised NGO kitchens. Speaking to Frontline, Joshi said: “The NGO-run centralised kitchen model was mercilessly projected as a better model vis-a-vis the naturally superior school-based kitchens. A false choice between ‘clean and hygienic food’ versus ‘freshly cooked food’ was projected despite several instances of food poisoning after consumption of food supplied by Akshaya Patra had been reported and evidence of the food not being consumed by children due to bland and monotonous taste was produced.”

He added: “The recent revelations about Akshaya Patra shatter the carefully crafted image of a well-meaning, do-gooder charity organisation working to feed poor children in government schools. This image itself was built through careful cultivation of linkages with officials (retired as well as serving), politicians, corporate elites and influential persons of society. For example, a Deputy Director at NIN [National Institute of Nutrition] with a background in communications was found to be on the consultation board of the APF when the NIN certified the taste and nutritional quality of APF food without even taking a single sample! The officials of the APF were invited to speak about “the Akshaya Patra model” to IIM [Indian Institute of Management] Bangalore when the serving Director of IIM Bangalore was on the Consultation Board of the APF.”

Dr Sylvia Karpagam, a public health researcher, also drew attention to other accusations against the APF in the past. She said, "In 2013, a Parliamentary standing committee on the welfare of Scheduled Castes and Tribes had sought a thorough examination of allegations against ISKCON and Akshaya Patra for collecting ‘unauthorised and illegal donations from public, in India and abroad, for the government sponsored midday meal scheme for schoolchildren’. It raised questions over the funding of Akshaya Patra and ISKCON and the loss of employment for cook-cum- helpers.”