Rice was procured by the state-owned FCI from the Punjab farmers during the Kharif season.
2. It was given to the private millers for cleaning, shelling and polishing.
3. The millers allegedly mixed low-priced inferior rice, export-reject grain, and rice damaged due to excessive moisture with the FCI rice. They then returned the substandard rice to the FCI.
Post-tsunami, due to huge demand from the southern states, Punjab was asked to supply rice to Tamil Nadu and Andhra
Chief Ministers like Jayalalitha refused to pick up the sub-standard rice; other states like Assam and Orissa also lodged complaints by June 2005.
CBI was asked to investigate and came up with shocking revelations. CBI registered cases against 164 officials, FCI too chargesheeted 200 of its officials and blacklisted 166 private millers.
The central foods ministry also decided to investigate the FCI scam in Punjab.