Jammu and Kashmir governor Satya Pal Malik on Saturday ordered a probe into the process by which a group insurance scheme was allotted to Anil Ambani’s Reliance General Insurance.

Malik also formally approved the “foreclosure” of the contract, two days after he had announced a decision to terminate the contract after describing it as “full of fraud”.

The new Anti-Corruption Bureau (ACB) has been directed to conduct a “thorough probe and fix responsibility,” an official spokesperson said. This case is the first to be handed over to the ACB, which was established by the governor’s administration recently.

Pressure was mounting on governor to identify and take action against officials after he publicly alleged a scam.

“Taking a well-informed view on all aspects and the concerns about the process involved, the government is of the opinion that in the interest of the government and for enhanced transparency, it would be judicious not to proceed further in the contract with the insurance firm,” the spokesperson said. “Therefore, a decision has been taken to foreclose the contract”.

The statement was issued from Delhi where the governor was camping.

The spokesperson said the case had been referred to ACB “to see whether it (the bidding process) was conducted in a transparent and fair manner”.

“Keeping in view the importance of the matter, the government has directed the director, Anti-Corruption Bureau, to personally look into the matter rather than entrusting it to someone else,” the spokesperson said. “The action would then be taken on the findings of the Anti-Corruption Bureau”.

The state’s principal secretary of finance, Navin Kumar Chaudhary, had said it was a clean deal. Reliance had also denied any wrongdoing.

While governor had claimed the contract was “full of fraud” after going through the relevant documents, his spokesperson made no reference to the explosive comments.

“Ever since sanction was accorded to the implementation of the insurance scheme by the government, doubts were expressed in various quarters, including a cross-section of the society and the media, about the credibility of the process,” the spokesperson said.

“This has cast a shadow on the entire process followed in the finalisation of the scheme…. The allegations flying around have not stopped but are pouring in the media about the selection of the insurance company, more so the selection of the intermediary,” the spokesperson said.

The spokesperson was referring to Trinity Reinsurance that designed the insurance policy for government employees. Trinity could not be contacted for comment. The previous PDP-BJP government had roped in Trinity Reinsurance in January 2018. Reliance was given the contract only last month when central rule had kicked in.

Chaudhary had told this newspaper that governor was “disturbed about the public perception about the issue,” which prompted him to take the decision to “scrap” the contract, suggesting there was no proof to call it a scam.

The spokesman said the governor’s administration was mandated to provide “good, transparent, fair and employee-friendly governance” and as such, “it was felt that it would be difficult to proceed with the implementation of the scheme”.