Is Gadkari, IRB & Purti dealings just the tip of a “money-laundering” iceberg?

Did the dealings between the BJP’s Nitin Gadkari, under cloud for corruption charges and discredited business group IRB, really show a nexus between corporates and netas to hide various ‘quid pro quo’ deals?


Nitin Gadkari, president of Bharatiya Janata Party (BJP), who is under a cloud for serious breach of ethics and propriety over the way he has grown his business while ostensibly being in public life, has come under the scanner as the Registrar of Companies (RoC) is likely to inquire about the alleged funding of the companies associated with him. However, Ajit Sawant, the former general secretary of the Mumbai Pradesh Congress Committee, who was instrumental in unearthing the shell companies of the BJP president, said that Gadkari, Purti group and Ideal Road Builders (IRB) group are just the tip of an iceberg and feels there could be hundreds of such companies being used for money laundering.

 

“In Purti Power & Sugar (Purti), over 80% shares are held by about several dummy companies. Some of these companies not only share the same email ID, but also have same directors and even same addresses. Of course, some in the media have found that several addresses provided by these companies do not exist, while four are from slum areas where nobody even heard the name of these companies,” Sawant said.

 

According to the former Congress leader, Gadkari’s driver Manohar Panse, accountant Kaurav Pandurang Zade, Sagar Kotawaliwale and Nishant Agnihotri (both employees of Purti) are directors of several shell companies. As per the information procured from the RoC, about 19 of these investor companies of Purti, show same email ID—[email protected]

 

 

While pointing out that the investigation of shell companies on such a large scale is not the job of a common citizen, Sawant said, “It (the detailed investigations) should be carried out by a government agency. I am planning to file a complaint against these malpractices with the RoC.” Two other agencies that should be involved in the investigation are Economic Offences Wing of the state government and Serious Frauds Investigation Office, set up by the central government. But will these two agencies actually act or will there be a deal to save Mr Gadkari?

 

During 1995-99, Gadkari was a public works minister in the Shiv Sena-BJP government, in Maharashtra. Incidentally, during this period, IRB, whose owners are said to be close to Sharad Pawar, witnessed a phenomenal growth and was awarded hefty contracts for road building. When Gadkari demitted office, IRB founder Dattatrey Mhaiskar invested in Gadkari’s Purti group. He bought around Rs2 crore worth of shares or 8% of the group.

 

Similarly, in 2010, Purti group, which had got a hefty loan of Rs164 crore, was provided funding by Global Safety Vision Pvt Ltd, another company related to the IRB founder. IRB Infrastructure Developers (IRB Infra) issued a denial, stating that Global Safety Vision was never a subsidiary of the company.

 

“Neither IRB Infra nor any of its downstream subsidiaries have ever committed or made any investments in Global Safety Vision Pvt Ltd. We are not privy to business decisions or information on investment made by Global Safety Vision and therefore unable to comment on any investment made or money lent by it to any other entity,” the release said.

 

However, this is only a half truth. Global Safety Vision is not subsidiary of IRB Infra, because it is one of the promoter entities of the company. IRB Infra said, “In the prospectus dated 8 February 2008, it is disclosed on its page 163 that Global Safety Vision is a Promoter Group Entity.”

 

Interestingly, Global Safety Vision gave a loan of Rs164 crore to Purti group at 14% interest, after mortgaging several assets (land) of Purti. India Against Corruption (IAC) has made several allegations against the land allotment to Gadkari’s Purti group.

According to media reports, Sudhir Dive, the managing director of Purti and a close associate of Gadkari, said that the loan was to be paid back in 73 instalments and most of it had been repaid.

 

Surprisingly, Global Safety Vision might require financing. In its last regulatory filing, the company had paid up capital of just Rs1 lakh. How could a company with a tiny capital base, lend Rs164 crore when the land is not even owned by the loanee?

 

Earlier, in a regulatory filing, IRB Infra had said that Ideal Power or Ideal Energy Projects were never part of the IRB group and it neither committed nor made any investment in Ideal Energy. However, Sawant alleged that Ideal Energy Projects is promoted by the Mhaiskar family and has a power unit, with 540 megawatt capacity, at a close distance from Purti's sugar mill.

 

Over the years, IRB group built the ‘Ideal’ brand and seems unlikely that anyone but the family will use the brand. If IRB says that Ideal Power or Ideal Energy were never part of the group, then a pertinent question arises: Why has it not taken any action against them for using its ‘brand’ name?

 

In a separate incident, corporate affairs minister M Veerappa Moily said that the Registrars of Companies will “definitely inquire into it”, after the information on alleged funding of companies with which Gadkari is associated had been made public.

 

When asked by reporters whether the business dealings of Robert Vadra, the son-in-law of Congress chief Sonia Gandhi, will also be scrutinised, Moily said that the two issues were separate and that there was no link between them.

 

The BJP has endorsed Gadkari’s stand that the party was open to any investigation by any competent authority and accused Union ministers of taking a partisan position on issues relating to corruption.

Comments
GOVIND GOPAL SHANBHAG
10 years ago
Yogesh Jee - On corruption issue, BJP did not allow Parliament to run last two entire sessions, they did not allow very very importat bills to pass through and made mockery of duties of elected reps to run the parliament smoothly. What have they to say now as their top most leader is involved in this tamasha.
M G WARRIER
Replied to GOVIND GOPAL SHANBHAG comment 10 years ago
Though disruption of parliament is never justified,'this tamasha'does not in any way reduce the gravity of 'that tamasha' namely the corruption issues raised earlier.
Shadi Katyal
10 years ago
One wonders why it took so long for public to know that how so many shell companies remained under the cover.
Are there no honest people in India or is it in our genes to be greedy and corrupt.
What has BJP to say about the party to have head of a party so crooked and keep pointing fingers to others.Would the party explain
A BANERJEE
10 years ago
Naturally, as the entire political structure of the Indian 'republic' rests on a corrupt base of political cut throats funded by the corporates. This suits the bureaucracy immemsely, in keeping with its own traditions!
Yogesh Sapkale
Replied to A BANERJEE comment 10 years ago
Thanks for your comment.
Surinder
10 years ago
Ham sab chor hain. Do not worry.
Mango man will soon teach a lesson to every chor by the power of ballot.
S.K. Jerath
Chandigarh
Dayananda Kamath k
Replied to Surinder comment 10 years ago
in democracy you geta govt you desrve. we have got this govt because we deserve it. when we vote for colour tv,laptop,mobile, cycle and inductionstove and freebees. what we can desrve? we will get such govts only. it is open curruption and election commission files a case for giving mony in appreciation of some act in rally is not bothered about these freebees in manifestos. even a complaint filed by me when dmk announced colour tv in tamilnadu was not taken up. they gave them colour tv at public funds.and earned millions by way of cable charges to their tv company. and may have collected moola from tv companies also during purchase.
NSriramamurty
Replied to Dayananda Kamath k comment 10 years ago
As Judges are Serious about Corruption now, PIL in High Court may result in Ordering that Election Manifestovs of Political Parties Should not Allow any Free Gifts Except-Food,Shelter,Education,Amenities,etc.Even Gold Coins,SArees,Golden Bangles,in addition to Money and Liqour being given for Decades , avoiding Police Notice. It is High Time To bring Restictions on Manifestov Inclusion of Valued Articles Gifts to Voters,to make Elections Fair&free.It helps in Curbing Corruption,by bringing up Non-Corrupt Politicians.
Rajeev Kapur
10 years ago
All politicians are corrupt. Some are more corrupt than others. A few are reincarnation of the Blind Kaurav King Dhritrashtra. Is India a Banana Republic?
M G WARRIER
Replied to Rajeev Kapur comment 10 years ago
Let us identify the less corrupt and support them till those who are not corrupt come to the fore to lead. One way is: In any election(luckily for us politicians are dependent on election and many of them claim that election expenditure is the cause for corruption!)from today, let local people identify the 'least corrupt' among the candidates and support, irrespective of party affiliations. May be social groups like IAC may guide local people.Don't give up hope, Mr Rajeev!
A BANERJEE
Replied to M G WARRIER comment 10 years ago
Is there any way to separate the less corrupt from the "corrupt"per se? Or, would it be justified at all? The corrupt are all the same, as is the entire "political class"as a whole-be it an anti-corruption activist (contemplating to join the election fray) or anyone aspiring to get elected even to a housing cooperative or a residents'association or any group of people having some powers over financial and executive powers. So are the bureaucrats, especially those in the top most posts who are "selected" for motives other than national gain. This is true of all political groups called the Congress or the BJP or the CPI-M or the erstwhile Janata Govt. or the NDA or whatever, and any of the regional parties created on purely community interest basis. So, we the people have no choice.
M G WARRIER
Replied to A BANERJEE comment 10 years ago
Mr Banerjee
Self-marketing is not appreciated by Moneylife, I suppose! Still, to cut short my reply, I suggest reading my article "Eradicating corruption: Power to the people" posted recently on Moneylife.in I would like to call your attention to the idea of 'corruption index' discussed in that article. You 'people' and we 'people'add up to more than 1.1 billion and the corrupt people are among the remaining 10 crore somewhere, whom we have to identify and expose. Any initiative in this direction should be encouraged. There are vested interests trying to silence such voices.
A BANERJEE
Replied to M G WARRIER comment 10 years ago
I accept the point. Well taken, Sir.
Yogesh Sapkale
Replied to M G WARRIER comment 10 years ago
Thanks for your comment, Mr Warrier. That is the only hope. As they say: “When choosing between two evils, I always like to try the one I've never tried before.”
Pradeep R Hattangadi
10 years ago
Yes agree that the Gadkari affair is the tip of the iceberg. But why is this being confined to only one person or party. What does Mr Ajit Sawant have to say about the VAdra affair? How is it that the party feels it does not come under the ambit of investigation. In fact, all corporates which have been setting up or promoting a horde of companies and having to high a growth needs to be looked into.
Yogesh Sapkale
Replied to Pradeep R Hattangadi comment 10 years ago
Thanks for your comment. Ajit Sawant is doing the investigation, research on Gadkari, IRB and Purti, on his own without support from any political party (he is no more in Congress either). You would agree that for an individual there are limitations and these things require collaborative efforts from all people, including you and me.
NSriramamurty
10 years ago
Both Allegations on Robert Wada and Bjp President Are Ordered to be Invested ,as Both are alleged to be Illegal Acts by IAC.Cogress's Crude Thiking Comes out by saying that Robert Varda is a Private Individual,and hence not investing his Alleged Frauds.
All Govt.Depts. Chiefs are also Joining Corruption Team,by not investigating allegations against Ruling Party's People but only Others.As Khemka has investigated on allegations published in media and Remedial Action taken,All IAS/IRS/IPS officers should investigate all allegations on his Depatment's works and Remedial Action taken.other-wise they are not justified for their Jobs.If done so,Corruption will come down substantially.
Yogesh Sapkale
Replied to NSriramamurty comment 10 years ago
Thanks for your comment.
Anil Agashe
10 years ago
The RoC is a useless and sleeping body. it should have a data base all persons who are Directors of any company. All filings are just that and probably hardly read. Defunct companies must be forced to close down. There should be restriction on subsidiaries and on investment companies.
Yogesh Sapkale
Replied to Anil Agashe comment 10 years ago
Thanks for your comment, Sir. I wonder, what kind of KYC is being followed at the RoC, while for opening a simple bank account the common people are harassed to produce n number of documents for KYC.
Krishnan B S
Replied to Anil Agashe comment 10 years ago
ROC and FDA are more loyal to Companies than to the Govt because they survive because of companies !
Yogesh Sapkale
Replied to Krishnan B S comment 10 years ago
Thanks for your comment.
Krishnan B S
10 years ago
If one company is thoroughly investigated we can get the main ones.
Investigate Reliance Industries from 2002 - 2012 !
And Truthfully and sincerely investigate only one person, that is Hassan Ali Khan, you will get all major ones !
What ever said, the Main issue of "Sonia Gandhi's trips abroad in private jets since 2004, the countries visited and the purpose of those" has been successfully diverted by all the people concerned. "Jay ho:" to all of them !
rajesh
10 years ago
Great Party President. Poor Bangaroo Laxman, lost president post for one lac.Bangaroos now learn to steal only in crores, then no problem and even party will protect them
Sunil
10 years ago
Wow , the party with a difference. A president who leads the way and sets the example . I am sure that Sushma Swaraj and others will not find anything wrong with this .
Yogesh Sapkale
Replied to Sunil comment 10 years ago
Thanks for your comment. If you remember, Sushma Swaraj was known to be very close to Gali Reddy brothers of Bellary. Some media even called her as 'Godmother' of the Reddy brothers, who allegedly destroyed greenery at Bellary with their illegal iron ore mining empire.
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