Jay Shah’s businesses saw huge growth after Modi became PM, says The Wire report; Union minister Piyush Goyal rubbishes allegations, says Jay will file Rs 100 cr defamation suit.
The ruling BJP came under strong attack from the opposition Sunday after a news portal report said some businesses of party chief Amit Shah’s son Jay Shah saw dramatic growth since Narendra Modi became Prime Minister in 2014.
However, Union minister and senior BJP leader Piyush Goyal rejected the allegations outright, terming the article in The Wire “defamatory and malicious” and “with no substance”.
“I find no allegations in the story. There are only imputations. Jay Shah’s businesses are done in full honesty and all taxes are paid,” he said.
He also said the younger Shah had decided to file criminal defamation suit against the author of the article and the editors of The Wire for Rs 100 crore in Ahmedabad. “We outrightly reject the allegations and thus [they] should not be reproduced in a way that could be defamatory,” Goyal said.
Opposition on the offensive
Turning the heat up on Modi and the BJP, senior Congress leader Kapil Sibal said the allegations should be investigated.
“We are not saying it is a criminal offence. That would be determined only when the case is investigated. But the question is whether the Prime Minister would come forward to say it is crony capitalism, as the BJP used to allege during the UPA government,” Sibal said.
The Aam Aadmi Party, meanwhile, announced that it would protest Monday in front of Amit Shah’s house in Ahmedabad, demanding further investigation in the case.
AAP spokesperson Ashutosh demanded an FIR be filed against Jay Shah. “BJP president Amit Shah should also answer whether the favours given to his son’s company were done under any political pressure,” he said.
Sitaram Yechury, general secretary of the CPI(M), demanded further investigation in the case on Twitter. “Earlier BJP presidents [L.K.] Advani, [Bangaru] Laxman had resigned on lesser charges,” he said.
Tale of two companies
The article in question traces two companies – Temple Enterprises and Kusum Finserve. Jay Shah held considerable stakes in both.
The report said Temple, a loss-making company in financial years 2013 and 2014, reported a revenue of Rs 50,000, and a profit of Rs 18,728, in FY2015. But in 2015-16, its turnover jumped up to Rs 80.5 crore. That same year, it received an unsecured loan worth Rs 15.78 crore from non-banking financial company KIFS Financial Services, before winding up its business in October 2016.
Kusum Finserve, a limited liability partnership (LLP) incorporated in 2015 in which Jay Shah holds a 60 per cent stake, received an inter-corporate deposit of Rs 2.6 crore from KIFS Financial Services in 2014-15, the report said.
Shah’s lawyer told The Wire that the company’s business was stock-trading, export and import and marketing consultancy services. However, the company also received a loan of Rs 10.35 crore from the public sector Indian Renewable Energy Development Agency (IREDA) to establish a windmill plant in Ratlam, Madhya Pradesh, in March 2016, the report said.
Crony Capitalism is not a crime …
Even if the company is completely above-board, it looks very odd.
Revenue Profit
2014-15: Rs. 50K Rs. 18.7K
2015-’16 Rs. 80Cr (!) (Rs. 1.5Cr.)
In short, during 2015-’16, the company served as a conduit for a HUGE amount of money, but was unable to make a net profit. And wound up operations in Oct 2016, which was a month before demonetization hit. It would be useful to see just where the deluge of money came from and where it went to.
It may all be perfectly innocent, but it looks odd. Since no crime is alleged, the information cannot be compelled from the company through any legal means. Reporting on it and keeping the spotlight on it is the only way it comes out.