Companies & Sectors
Gujarat NRE Coke: a view from the bitter Australian mining town of Illawarra

Gujarat NRE, a product of the resource bubble of 2007, recently came under scrutiny for questionable corporate governance practices. Here is how a small Australian paper in the mining town of Illawarra reported about the lavish lifetyle of the promoters and their shenanigans even as the company sank

Beleaguered miner Gujarat NRE Coke Ltd (GNCL) has initiated its corporate debt restructuring (CDR) program with major lenders to get rid of its toxic debt, according to a filing on BSE. The company has been unable to pay off its debts for the last few months and even could not pay its miners in Australia. This company had stormed the small mining town of Illawarra and has since been the central talking point of that town’s small society. Illawarra Mercury, a local newspaper has been closely following the company’s Australian subsidiaries for its questionable corporate governance practices and inability to keep its promises to its miners.

The real problems started in earlier sometime back but this year GNCL admitted it could not repay its debts. Then, in July, the Australia environmental regulator, Clean Energy Regulator, slapped charges on the company’s Australian mines for failing to pay up carbon credits as per Australian environmental regulations. Problems mounted further as the company was included in the list of biggest environmental polluters in the country. The company tried to desperately raise cash by selling off various assets, including some of its wholly-owned subsidiaries in Australia.

According to Illawarra Mercury, one of the company’s subsidiaries owned a multi-million dollar home to accommodate Arun Jagatramka, but sold it for way more than the market value to parties closely associated with the Jagatramkas – a typical Indian trick by Indian businessmen to keep the assets private and the debts public. A mansion, at a coveted address, bought at $5 million, was sold off for $10 million,  according to Illawarra Mercury, to Besant International owned by a person called Kunal Chandak. The Jagatramkas were also spotted in a local derby (a horse race and frequent hang outs for the rich and famous) with the Chandaks.

The paper also reported that as many as 500 workers from both the Russell Vale and Wongawilli mines in Australia, have not been paid for weeks, reportedly totalling $5 million, and it is still not certain whether they will be paid at all. Their future is insecure. The Australian local even reports that families of miners are finding it hard to make ends meet. Despite the Jindals taking over the Australian mines, their future still remains uncertain. Bob Timbs, who represents the workers of Gujarat NRE Coke’s Australian mines was reported saying, “...even the most optimistic of Gujarat’s workers are becoming deeply cynical by the flim flam that has come from (Gujarat NRE Coking Coal) head office.”

While the miners continued to suffer, the Jagatramkas continue to live a lavish lifestyle. Illawaya Mercury reports that during one of its meeting with shareholders and miners, on 16 October, Arun Jagatramka came in a shiny Bentley, decked up in a tailored suit while the workers were donning their usual ‘dusty highs’.

His extravagances didn’t include just horse races and a Bentley. Being an avid sports fan, the Jagatramkas even sponsor an Australian basketball sports team—Woologong NRE Hawks—with Gujarat NRE embezzled on the team’s jersey. A quick glance at Jagatramka’s twitter account will show tweets of mainly sport-related items, mostly of of his sponsored team, Hawks.

All this comes at a time Gujarat NRE Coking Coal Ltd (GNCCL), the Australian company, relinquished its majority stake to Jindal Steel & Power (Jindal), with the latter holding 53.63%, to pay off its debts and pay outstanding salaries to miners.

The company has come under heavy fire for its questionable corporate governance practices. Shortly before GNCL adopted its accounts for the 2012-13 fiscal, Grant Thornton, the company’s auditors for GNCCL, said that they could not express an opinion on the financial statements since they have doubts on the company's ‘Going Concern’ assumption, valuation of impairment and assets, deferred tax assets, recoverability of trade receivable and completeness of contingent liabilities. Shockingly, it was discovered recently that ICAI president Subodh Agrawal, who is also chairman of the audit committee of Gujarat NRE Coke, recommend unaudited financials of the company’s Australian subsidiaries to the Board of Directors, knowing fully well that they are highly material amounts.

The company told shareholders that in its consolidated financial statements, 91% of its assets and 64% of its revenues, which are in Australian subsidiaries, are unaudited!




2 years ago

A very sad commentary.
No news posted on what happened subsequently to this problem , jspl, and grecoke-india ?

Guide to RTI: Ask the right queries to obtain information you seek

The RTI is one of the most powerful tools and an essential democratic right of every Indian citizen. A handy guide takes you through the steps to file an effective guide

The Right to Information Act, 2005 (RTI) that came into force eight years back has proven to be one of the most powerful tools put to use by every Indian—big and small—to obtain information that was all along denied under the garb of ‘official secrecy’. Thanks to the benefits of the RTI, many of India’s biggest scams and scandals are now exposed.

Deepak Sandhu, chief information commissioner (CIC), very rightly says, “RTI is a game changer. It has democratised information to the citizen’s advantage. The citizen is central in the Act. Other countries offer freedom of information while our legislation recognises it as a right.”

Here are a few tips to make effective use, to extract the most appropriate response, and minimise the possibilities of rejection on frivolous grounds.

  1. The RTI Act entitles you to obtain response by way of information within 30 days.
  2. Remember, it is the basic information that is being sought and not hows, whys and who’s of any matters.
  3. Information under the Act can be sought from central, state and local authorities, parliament and state legislatures, judiciary, police, security forces, public sector undertakings and bodies substantially financed by the state.
  4. You need to consider deeply about the precise nature of the information required to enable you to frame your query in English, Hindi or the state language very concisely in a few words.  Do not go on rambling explanations or suggestions or attempt vague roving enquiries.
  5. The RTI should never be used to settle scores or to target or harass any one individual or department. For instance: “Maine uske oopar RTI mara; ab ayega maza!”
  6. It is important that the information elicited should not be merely filed away. It ought to be taken forward effectively to get matters moving in the right direction and/or to set right systemic flaws, if any.  Possibly, if necessary, it can be put to use in a Public Interest Litigation (PIL) at a High Court.
  7. You can seek information pertaining to records, documents, memos, mails, opinions, advices, press releases, circulars, images or any computer generated matter, orders, log books, contracts, reports, papers, samples models or electronic data.
  8. Under Section 4 of the RTI Act, you are empowered to visit, by prior appointment, the office concerned to inspect records and official documents and obtain xerox copies on payment of copying charges at actuals.  To enable you to do so, you are to be provided suitable table and sitting space within the office premises to carry out your verification/inspection exercise to flag the documents that need to be copied. For instance, authorities like the BrihanMumbai Municipal Corporation (BMC) prefer Section 4 approach for the simple reason that it is you, who will flag only the documents/information required and that relieves them of the burden of hunting through a mass of bureaucratic red taped files and also the task of drafting a reply that has to be approved and finally signed, sealed to be sent to you within the mandated 30 days of receipt of your application.
  9. The Act also provides for inspection of government works and to take samples from sites.
  10. Section 6 of the Act has laid down a simple form that that can be copied on plain paper and signed by the applicant who has to be an individual and not any organisation.

  1. The application fee of Rs10 can be paid either in cash across the counter. Court fees stamp can also be affixed in the case of BMC and Maharashtra State or Demand Draft or Pay order in favour of the Accounts officer of the concerned department.
  2. However, a more convenient mode would be to obtain a Postal Order for Rs10, attach it to the application in duplicate and hand it in the RTI counter in any Head Post Office (PO). The PO counter clerk will retain the two copies and return duly stamped the third copy with the counterfoil of the postal order. The PO then despatches the application to the department concerned with a copy to you.

(Nagesh Kini is a Mumbai-based chartered accountant turned activist.)




2 years ago

one person to purchase our house he gave 5,00,000 and take receipt for that and he has not give xerox copy of that receipt since 9 months he is not purchasing our house and saying i have given 50,00,000 and i have agreement but he does not have agreement under rti can we ask xerox of that receipt
plese suggest us

g s raveendranath

3 years ago

physical verification of departmental material comes under rti act 2005

Sundaram Finance Q2 net profit up 10% on tough auto finance market

During the September quarter, the lender’s income from operations rose 11% helping the company to record moderate net profit of Rs122.72 crore, despite slow growth of auto sector finance

Sundaram Finance Ltd, India’s fifth largest non banking financial corporation (NBFC) reported a 10% increase in its second quarter net profit on slowdown in auto sector financing, especially commercial vehicles and passenger cars.

For the quarter to end-September, the lender said its net profit rose to Rs122.72 crore from Rs111.50 crore while its revenues from operations rose 11% at Rs558.31 crore from Rs504.45 crore, same period last year.

The company registered positive growth despite fall in auto sector financing on slow auto sector growth. Its loan disbursement increased just 6% for the half year ended September 2013, to Rs5,178 crore.

“Market conditions continue to be challenging with the sales of commercial vehicles and passenger cars having fallen sharply and prospects of an early revival appearing unlikely. We will continue to focus on our stated objectives of growth with quality and profitability,” said TT Srinivasaraghavan, managing director, Sundaram Finance Ltd.

Sundaram Finance’s gross non-performing assets (GNPA) during the second quarter stood at 1.58% and net non-performing assets (NNPA) at 0.94% only. Its capital adequacy ratio (CAR) stood at 17.66% as on 30 September 2013.

At 12.25pm Tuesday, Sundaram Finance was trading marginally down at Rs520 on BSE, while the benchmark Sensex was marginally up at 20,652.




3 years ago

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