Opposition Demands Probe After the Wire’s Investigation Report Claiming Company Owned by Jay Amitbhai Shah, BJP President Amit Shah’s Son, Registered A Staggering 16,000-Fold Growth in Turnover
NEW DELHI — In what is being seen as an explosive investigation by The Wire online news portal, it has been revealed that the turnover of the company founded by Jay Amitbhai Shah increased 16,000 times after his father Amit Shah became the president of the ruling Bharatiya Janata Party.
According the The Wire’s report, “Company balance sheets and annual reports obtained from the RoC reveal that in the financial years ending March 2013 and 2014, Shah’s Temple Enterprise Private Ltd. engaged in negligible activity and recorded losses of Rs 6,230 and Rs 1,724 respectively. In 2014-15, it showed a profit of Rs 18,728 on revenues of only Rs 50,000 before jumping to a turnover of Rs 80.5 crore in 2015-16.”
However, according to the report, in October 2016, Jay Shah’s company suddenly stopped its business activities, declaring that Temple’s net worth had “fully eroded” because of the loss it posted that year of Rs 1.4 crore and its losses over earlier years.
According to the information provided, Temple Enterprise was incorporated in 2004 with Jay Shah and Jitendra Shah listed as its directors. Amit Shah’s wife, Sonal Shah, also has a stake in the company. The company, in its filings, has declared the increase in revenues as coming from the “sale of products”. This included Rs 51 crore of foreign earnings, up from zero the previous year.
The investigation also revealed an unsecured loan of Rs 15.78 crore from a listed entity, KIFS Financial Services. KIFS, a non-banking financial company (NBFC), has had run-ins with SEBI in the past.
According to Shah’s RoC filings, Temple Enterprise is described as being engaged in wholesale trade and more than 95% of revenues come from the sale of agricultural products.
“Temple Enterprise is in the business of import and export of agri commodities like rapeseed DOC, castor DOC meal, desi chana, soyabean, coriander seeds, rice, wheat, maize etc,” notes the statement from Shah’s lawyer. The statement also credits the business acumen of Shah’s partner, Jitendra Jayantilal Shah, and the education Amit Shah’s son received for the performance of the company. “The business ownership and management was principally held by Jay Shah and Jitendra Shah (an old family friend) and their associates. Jay Shah is a qualified engineer having done his B.Tech from the renowned Nirma University and Jitendra Shah was already engaged in the business of commodities for the last several years and his companies had been recording an annual turnover of over Rs.100 crore,” says the statement.
Even after such a massive turnover in a year, the company, according to the investigation, stopped its activities last year.
As per the investigation report, Kusum Finserve is a limited liability partnership (LLP) incorporated in July 2015 with Jay Shah owning a 60% stake in it. The report says, “Shah’s lawyer says the main business of Kusum Finserve is ‘trading in stocks and shares, import and export activities and distribution and marketing consultancy services.’” What is interesting with this company is that “while the main business of the firm is trading in stocks, its RoC filings reveal it is involved in diversifying into a completely unrelated field: it is setting up a 2.1 megawatt windmill plant worth Rs 15 crore in Ratlam, Madhya Pradesh”.
From all the dealings, loans and approvals, one is forced to ask how did the Kusum Finserve “get a loan sanctioned for a 2.1 MW wind energy plant despite lacking any experience in the infrastructure or electricity sector”.
After The Wire published the damning report, it has attracted lot of eye-balls from all circles. While the investigation may ruffle many a feather within the BJP, it has already got the attention of the Opposition. The investigation report is already being likened to the reports about financial dealings of Sonia Gandhi’s son-in-law, Robert Vadra.
Amit Shah, considered the most powerful man in the country after Prime Minister Modi, will certainly feel the heat for his son’s rising business interests.
At a time when the BJP and PM Modi are already under attack for issues like economy, GST, demonetization, this investigation is certainly going to hurt the ruling party.
Congress, AAP Demand Probe
Responding swiftly to the report, opposition Congress and Aam Aadmi Party demanded an independent probe into the business dealings of Amit Shah and his son.
The Congress sought answers from Prime Minister and the BJP president and demanded a probe by the ED and the CBI.
Addressing a press conference at the AICC headquarters, senior Congress leader Kapil Sibal said it seems the fortunes of some people have changed after the change of power. He said filings with the Registrar of Companies (RoC) have revealed that the company owned by Shah’s son Jay started making profits after 2014.
He said in March 2013 and in March 2014, Shah’s Temple Enterprise Private Ltd recorded losses of Rs 6,230 and Rs 1,724 respectively. “In 2014-15 it started making profits…that means there was some change in May and profit ka karvah shuru ho gaya….”
“In 2014-15, the company made a profit of Rs 18,728. The real change happened in 2015-16 and it is shocking…..The company made a turnover of Rs 80 crore in 2015-16. The company started getting loans. One Rajesh Khandwala, who owns KIFS Financial Services, gave a loan of Rs 15.78 crore. And the company stopped business activities in October 2016. And the reason stated was that the company was incurring losses.”
“This is indeed strange,” he said,
“Today, we want to ask our Prime Minister what you now think about crony capitalism. Will you direct the CBI to probe? Will you direct the ED to probe? Will you ask them to arrest them? Because in the case of opposition, the ED immediately sends notice and shows speed in arresting them…If somebody’s name is Jai, Amit and Shah who can arrest them. I can confidently tell you that the Prime Minister will remain silent,” Sibal said.
He alleged he has learnt that the electronic media has been asked not to show his press conference.
“Our pradhan sevak always used to talk about crony capitalism. Even if there is an allegation of Rs 10 lakh against anyone, they set the CBI after them. They set the ED after him. If they want to level any allegation against a Congress leader….there was an allegation of Rs 10 crore against Virbhadra Singh….how many cases did they launch…So we want to ask where is the CBI, ED and where is the prime minister.”
“The Prime Minister will not speak. Because it is about the son of his party’s president. Unhi ki ho jai wo hain? So how suddenly there was a turnover of Rs 80 crore..this company was dealing in agri products….” he said.
Asked where is the criminality, he said “we are talking about crony capitalism. Criminality will only (be established) if there is an investigation. That will only be determined by an investigation. Why where these loans given through ooperative banks without a mortgage, without proper security. Seven crore was the turnover of the cooperative bank and loan of Rs 25 crore was given…why,” he asked.
He spoke about Kusum Finserve, a limited liability partnership incorporated in July 2015 with Jay Shah owning a 60 per cent stake in it. He said the got company got Rs 25 crore loan from the Kalupur Commercial Cooperative Bank. The board of directors of the bank, he said, include individuals from the Nirma group and Nirma university.
Asked whether the Congress will seek an investigation, he said “investigation is to be done by agencies under their control. Who will listen to the Congress. We just want you to tell the people of India that this is happening in our country. We know who CBI, ED will investigate and who ED and CBI will not investigate. Is the Prime Minister open and honest enough to say investigate the son of Amit Shah. That is the issue.”
“Our appeal to the Prime Minister is that you are the pradhan sevak ….you always say no khaunga, na khane dunga….so nahin khane dijiye.” “This is the Shah model of business…,” he said.
Congress vice president Rahul Gandhi tweeted: “We finally found the only beneficiary of Demonetization. It’s not the RBI, the poor or the farmers. It’s the Shah-in-Shah of Demo. Jai Amit,”
The AAP also held a press conference. Senior leader Ashuthosh said a FIR should be registered against Jay Shah and a probe should be ordered into his company’s activities.