J Gopikrishnan / New
Delhi
March 18, 2013
Union Petroleum Minister M Veerappa Moily could be in the
dock for raising funds for his family controlled trust from a corporate
giant when he was Corporate Affairs Minister. Moily faces another serious
case of conflict of interest as a top official of Reliance Industries is
advisor to a company controlled by Moily’s son Harsha Moily. Even earlier, the
Minister has faced charges of favouring Reliance in the KG basin case.
Veerappa Moily has been president of Kissan Sabha Trust
(KST), which received huge funds from ITC from Corporate Social Responsibility
(CSR) budget in September 2012. His son Harsha Moily’s email message to his partner Sudhir P
clearly showed that Moily himself managed the fund from the ITC for his private
trust.
“Sudhir — Dad just called and confirmed that ITC has
approved the funding the operating expenses of KST (Kissan Sabha Trust) for the
next five years. Therefore, for ITC to process the payments, we have to immediately
furnish ITC all OpEx bills for Karkala & Chikaballarpur for the academic
year 2011-12. Request you to do the needful,” said the email message, which was
also forwarded to Moily’s official email vmoily@ kar.nic.in.
The subject of the message was Capital Budget for Kissan
Sabha Trust for Funding. The Kissan Sabha Trust is a family-controlled trust of
Moily. It was established decades ago and is running educational institutes and
charitable organisations in Karkala and Chikaballarpur in Karnataka. In addition
to Moily, his wife Malathy, son Harsha and daughter Sushma too are members of
the trust.
“The total capital cost for Karkala school comes to Rs.1.71
crore and for Chikkaballarpur school Rs.3.10 crore. Total capital cost comes to Rs.4.81 crore…. For operating the schools, our budget right now is Rs.50 lakh for
this year and will increase with PUC students getting admitted. Hence we may
ask for a corpus fund of Rs.6 crore to fund the day to day operations @ 8% per
annum,” said an earlier email sent by Sudhir to Harsha Moily. The email
messages between the duo talk about approaching the corporate sector for the
requirements of the trust.
The person, Sudhir P, referred in this mail is Sudhir K
Prabhu. He is also a Director in one of the companies run by Moily’s son
and the Karnataka branch head of a Mumbai-based Chartered Accountant’s firm,
which audits companies of Harsha Moily.
The documents available with The Pioneer show that Harsha
Moily is/was Promoter and Director of four companies, whose business flourished
after Moily became Cabinet Minister in May 2009. The account of one of his
companies shows an unsecured loan of Rs.6 crore from an unknown source.
Moksha-Yug Access India Private Limited is one of the major companies run by
Harsha.
The company which faced fund crunch after it was established
way back in 2005, literally got “Moksha” after Veerappa Moily landed in Union
Cabinet in 2009 as Law Minister, then moved to Corporate Affairs Minister with
additional charge of Power, and finally shifted to the coveted Petroleum and
Natural Gas portfolio.
The Moksha-Yug Access (MYA), started as a supply chain
company of rural products, is currently concentrating on milk supply. The
company, which was floated by Harsha and his sister Hamsa, handles more than
one lakh litre of milk supply every day.
And here comes the Reliance connection. The website of the
company claims that one Mr Ananth Ravi, President of Reliance Industries, is
their Advisor.
“Mr Ananth Ravi advises MYA on finance related matters. He
has led the Project Finance team of Reliance in the financing of billion dollar
projects in telecom, petroleum and retail sectors. He was also instrumental in
setting up the Reliance’s telecom venture, Reliance Infocomm operations in
Karnataka. He brings to MYA, his vast experience in project management and
finance,” says the company’s website.
Around 50 per cent of this company’s shares are held by US
and Mauritius-based funds, while Harsha owns around 20 per cent stakes.
Well-known companies like Bharat Forge and Jubilant Agro are stakeholders or
Directors Board of this company.
MYA Financial Services Private Limited, Rural Crystals
Educational Services Private Limited and MVH Holdings are the other three
companies where Harsha and Moily’s other family members are Directors.
Pioneer News Service / New
Delhi
While Moily maintained a stony silence over the exposé, his
son Harsha Moily issued a clarification through a PR agency. He sought to claim
that their family-controlled Kissan Sabha Trust (KST) “operates on low budget
and expenditures were met from donations from public”.
“As a practice budget requirements are drawn to understand
the funding requirements to run educational institutions for underprivileged
poor and school dropouts. The estimation for a yearly operating expenditure was
worked out at Rs.50 lakhs a year. A corpus to ensure yearly interest receipt was
worked out at Rs.6 crores to yield Rs.50 lakhs at 8 per cent interest per annum.
The estimation of creating a corpus is an accounting exercise. The Trust has
not received any funding of Rs.6 crores. It has been granted Rs.42 lakhs to fund
the operating expenditure for the year though the operating expenditure is
higher and is met from donations from the public. The trust operates on a low
budget and does not have any corpus or other assets,” an emailed statement on
behalf Harsha Moily maintained.
Harsha admitted that Ananth Ravi, president of Reliance
Industries, was an “Advisor” in his company Moksha-Yug Access India Private Ltd
(MYA). However, Harsha claimed that Ravi
“excused from the Advisory Board” since August 2012 and that he was his
“mentor” from 1999.
“It is important to note that MYA received funding from
professional investors in 2008, much before my father joined the Government.
MYA’s investors did due diligence on MYA through the most part of 2007, and the
funding from VCs came through in March 2008,” he said, while reacting to this
newspaper’s report that funds started flowing from 2009 when Veerappa Moily
became the Union Cabinet Minister.
The fact remains that the The Pioneer report focussed on
highlighting Veerappa Moily’s role as Union Corporate Affairs Minister in
managing funds from the corporates for his family-controlled Trust. The
newspaper never mentioned about the amount of funds received by KST from
tobacco major ITC. It cited only the contents of the emails between Harsha and
his partner Sudhir P to established Veerappa Moily’s direct involvement in the
whole issue. The report mentioned about a transaction of Rs 6 crore, as
unsecured loan in two tranches from unexplained sources, to Harsha’s another
company called MVH Holdings.
“Sudhir - Dad just called and confirmed that ITC has
approved the funding the operating expenses of KST (Kissan Sabha Trust) for the
next five years. Therefore, for ITC to process the payments, we have to
immediately furnish ITC all OpEx (Operational Expenses) bills for Karkala &
Chikaballarpur for the academic year 2011-12. Request you to needful,” said the
email message sent by Harsha to his partner.
The email was also marked to Veerappa Moily’s official email
id vmoily@kar.nic.in at 1.09pm on September 21, 2012. The subject of the
message was ‘Capital Budget for Kissan Sabha Trust for Funding’. Harsha didn’t
contradict the facts as reported by The Pioneer and chose to maintain silence
both on his father’s role.
No favour to corporates in lieu of funds for trust: Moily
Pioneer News Service / New
Delhi
Breaking his silence over The
Pioneer expose on his role in managing funds from ITC to his family-controlled
Kissan Sabha Trust (KST), Petroleum Minister Veerappa Moily on Wednesday
admitted that his Trust approached corporates “for noble purposes”. In a Press release, Moily claimed
that he never extended any favour or help to any corporates for seeking
financial assistance for the trust.
However, in his two-page
statement, Moily chose to keep mum on the email communications between his son
and partner over the funds from tobacco giant ITC. “Dad just called and confirmed
that ITC has approved the funding for next 5 years…,” his son Harsha stated in
his email to his partner and marked to Veerappa Moily also.
“The Trust accounts are maintained
in a fair and transparent manner and the same is open for any scrutiny.
However, in order to effectively work towards achieving its noble purpose, the
Trust approaches Corporates who are promoting the social cause for the benefit
of the people from the bottom of the pyramid.
“I would like to categorically
state that there have been absolutely no occasion for me to extend any kind of
favour or help to any corporates for seeking financial assistance for the
Trust,” said Moily in the statement.
Moily said that he was “pained” to
see that his son Harsha’s successful business ventures being condemned, merely
since he “happens to be son of a political person”.
“It is also a matter of fact that
Harsha has been successfully working towards social cause on the basis of his
own conscience and without any political ambitions,” said Moily senior.
