If I am pushed, I would think of one more book : Vinod Rai

IF I AM PUSHED, I WOULD THINK OF ONE MORE BOOK: VINOD RAI

Sunday, 21 September 2014 | J GOPIKRISHNAN | in Agenda

In a free-wheeling interview, Vinod Rai, whose tell-all book has brought up several debatable topics, shares with J GOPIKRISHNAN  the intricacies of his tenure as the 11th Comptroller and Auditor General of India

Your critics are asking what your motive to have come out with this book now is . How do you answer such queries?

Actually after retirement, I thought of letting this thing be a closed chapter. Whatever CAG can say, we had put it in our reports. But still some people were making allegations against me and the institution. My colleagues also suggested that I should put all these things in a book, which can be understandable to the common man.

Our CAG reports are not widely circulated and are technical in nature. I thought we should educate and alert the younger generation. These details will give them a perspective of our system and would lead to a demand for transparency in the future. As alleged by some people, I am not trying to attack anyone, neither do I have any motive.

In this book, you have devoted an entire chapter on the CBI’s ‘dirty tricks’ against you after the 2G scam came to light. Were you hurt by the UPA Government’s dubious move to turn the CBI on you?

I am not hurt. I was extremely surprised when I got an e-mail from a journalist, Dheeraj Tiwari, of The Economic Times on November 30, 2011, asking me for response on the CBI move to launch a preliminary enquiry (PE) against me.

I straight away called CBI Director Amar Pratap Singh. He said no such thing was proposed against me, but a probe had been launched against my former colleague Atul Rai. He sent an officer providing the details of the case.

The information report provided by the CBI officer showed that a PE was registered against Rai, CEO and MD of IFCI, and unknown officials of the Ministry of Finance. The allegations related to some investment decisions of IFCI. Rai worked with me in the Finance Ministry before he took command of IFCI. According to the PE, in February 2007, I apparently helped Rai to be expeditiously relieved from the ministry to become the CEO and MD of IFCI. In many places in the CBI report, my name was mentioned in a bid to put pressure on me and create innuendos. CBI’s PE gives an impression that Rai and I are close relatives. Let me state that I don’t even have a distant relation with him.

I decided to take on the CBI Director and told him that I will go to the media if the agency dared to do such nasty things. I asked him, “How can you do such things against a constitutional authority. If I am challenged, I will go to the media and expose it all”.

You must be aware of the persons behind this dubious move, but haven’t mentioned them in your book.

They decided to hit me personally after the 2G scam blew out. It was to injure my credibility and break me, to make me weak. I don’t want to name or identify the person or persons behind this move. Obviously, they were showing their vendetta for the CAG report on 2G. It must be a person powerful enough to influence the CBI Director.

Anyway, now your enemies are no more in power and you don’t have to worry about the CBI case.

The CBI has not yet closed this case. Why is it not closing this PE? It is simmering somewhere. Can you treat officials like this? I am a constitutional authority. Can the CBI do such things? Are they empowered to put my name in their information reports?

In your book, there is no mention about the role of your former boss and then Finance Minister P Chidambaram in the 2G scam. After the CAG report, his role came out and even courts have said that he and A Raja decided the price and approved the sale of shares to foreign companies jointly. How did your audit miss this angle?

We have audited the documents from the DoT. We also checked the documents from Finance Ministry. We have found objection of Finance Ministry officials. Those days, we did not come across these documents. These things had not been brought to our notice.

Later, it was proved that Chidambaram always insisted on illegal non-paper method for communicating with Raja.

No comments. Those days these things were not available to us.

CAG officials are facing tough resistance from Mukesh Ambani’s Reliance in KG Basin audit. What is your advice to the Government in this regard?

They are not co-operating. Documents are not shared with us. The Government has to take a call. Actually, the Government invited us to conduct an audit on KG Basin. Hence my suggestion is that in an original contract, there should be a clause providing liberty to the Government to appoint a Government auditor as and when it wishes.

Now you are facing legal actions for your revelations. Sanjay Nirupam sent you a notice. What is your strategy?

If they want to pursue the case, I am ready. I have said only the truth. They have abused me, called me names in the PAC meeting; there are minutes of the meeting. I will request the Speaker for the proceedings of the PAC. I must tell you that some good samaritan MPs had already given me all details which will prove what Nirupam and Sandeep Dikshit did to me in the meeting.

Moreover, there is a letter written by PAC Chairman Murli Manohar Joshi to all MPs condemning certain MPs’ behaviour towards me. This letter details how these MPs behaved with me in the PAC meeting. In that letter dated November 18, 2011, Joshi cites a Speaker’s ruling which made then Defence Minister VK Krishna Menon apologise to the CAG. These things are enough for me to prove my points in the court. I am ready to face anything, if they want to proceed.

But your book is silent on the JPC proceedings. We have heard there are certain Congress MPs like Manish Tewari who did the same to you.

No, it was different. Manish was aggressive in questioning. In PAC, Nirupam and Sandeep were calling me all sorts of names. They used the words — fraud, politically motivated etc. In public, politicians and ministers called me rogue, r-virus, Bhoomihar from Ghazipur etc. I have explained all these things with fitting rebuttals in my book.

Certain media organisations were also after you.

Generally, media always supported CAG and widely published our findings. Of course, some were against us; very few have vested interests. But most of the people in media always supported us.

What are your future plans? Entering politics or writing more books?

As far as politics is concerned, I can say no, never. I am not fit for politics. More books? Well, if I am pushed, I would think of one more book. I have not yet taken any decision on future plans; may be I will in a month’s time. I am not saying no to more books.

So you have more arsenal in store…if you are pushed?

I said if I am pushed, I will write one more.

[Published in 'The Pioneer'  on Sept 21, 2014]

Rules flouted to aid Mukesh Ambani's Reliance Jio : CAG

DoT  rules  flouted to aid Reliance Jio : CAG

‘The Pioneer” -  January 20,  2014 | J Gopikrishnan | New Delhi

After the exposé on irregularities in the KG Basin, the Comptroller and Auditor-General of India (CAG) has found blatant violations of Department of Telecommunications (DoT) rules and favouritism in the manner the Mukesh Ambani-led Reliance Group was allowed entry into the telecom sector. The CAG has raised several uncomfortable questions about the favouritism shown to Reliance Jio during the audit of 3G / Broadband Wireless Access auction.

The CAG’s recent findings and questionnaires to DoT detail the way the Government provided a backdoor entry to Mukesh Ambani’s company in the telecom sector in 2010. The apex auditor also claimed that favouritism was shown to the company that led to possible loss of more than Rs 20,000-crore to the exchequer during 2011-13.  The CAG also blamed DoT for providing monopoly to Reliance Jio in the broadband and 4G sector by withdrawing State-owned companies BSNL and MTNL.

The DoT has not yet answered the CAG’s queries on violations.  Documents available with The Pioneer show that auction for Broadband Wireless Access (BWA) Spectrum was stage-managed to give backdoor entry to Reliance Jio.

The CAG in its preliminary findings said, “a small company” Infotel Broadband Services Private Limited (IBSPL) was given approval to take part in the auction in mid-2010 without meeting the net worth limit and allowed to bid for more than Rs 12,750-crore.

The small company, with a turnover of just Rs 16 lakh and a single subscriber, had only Rs 3-crore authorised capital during auction. “The DoT did,  however, neither seek the sources of funding for furnishing the EMD (Earnest Money Deposit) of Rs 252-crore (1,500 times the company’s annual turnover or 100 times the paid-up capital of the company) in March 2010, at the time of application for the BWA spectrum,” said the CAG’s preliminary findings, seeking response from the DoT.

The IBSPL won the auction in all circles of India. Within hours of winning the auction, the subsidiary of Reliance Industries Limited (RIL) was allowed to take over 95 per cent of the shares of the small company. The takeover deal was worth Rs 6,000-crore. In the preliminary findings, the auditors say this deal created a windfall of more than Rs 4,800-crore to the IBSPL, which became the RIL’s subsidiary.

The auditors blamed the DoT for violating the mandatory lock-in period of three years, which bars acquisitions and mergers in the telecom sector. “A non-participant company exploited the loophole left by DoT officials in the eligibility criterion for obtaining BWA spectrum by acquiring a winning company without participating in the auction process, within hours of closure of the auction process, thereby vitiating the sanctity of the auction process,” said CAG.

The four-page communication to DoT, signed by Senior Audit Officer Rajendra Kumar, details the RIL’s surrogate takeover plans of the small company during March-June 2010. The auditors also blamed DoT for allowing Reliance Jio to obtain voice service facility while paying only for the BWA Spectrum, which is widely termed as 4G in the Indian telecom sector.

According to CAG auditors, Reliance Jio only paid Rs 12,750-crore for getting broadband operations across India. But later the DoT granted voice facility also without charging any extra money. According to the questionnaire sent to DoT, the auditors pointed out that for the similar voice service facility, the 3G auction winners paid more than Rs 33,000-crore for operating in all circles in India during the same period. Sources in CAG indicated that apart from favouritism, this move of DoT created a clear loss of Rs 20,000-crore to the public exchequer.  

After Reliance Jio’s entry, the State-run BSNL and MTNL withdrew from the broadband sector. These PSUs were also granted BWA spectrum. The Union Cabinet recently approved the reimbursement of money to BSNL and MTNL. In its communication to DoT, CAG said this move will leave “virtually the entire field to a company that had not participated in the auction process.”

Questioning the withdrawal of State-run companies, CAG officials indicated this was a clear move to provide monopoly in broadband sector to the Mukesh Ambani-led Reliance Jio.  

[This report was published in "The Pioneer" on Jan 20, 2014]

26/11 hero still fighting the enemy within!

26/11 hero still fighting the enemy within!

"The Pioneer -  November 26, 2013 | J Gopikrishnan | New Delhi

Even as the nation observes the fifth anniversary of the 26/11 terror attack on Tuesday, a paralysed NSG Commando is fighting a legal battle against the Indian Army for justice. Havildar PV Manesh who got the Shaurya Chakra has been transferred from his hometown in Kerala to New Delhi and his helper has been taken away.

Mercifully, the Delhi High Court has stayed the transfer, and asked the Army and Government of India to file a reply by January 24, 2014. The Army may come out with its own justification, but the fact remains that the commando needs round-the-clock care and attendance. 

However, the High Court’s order may not be the end of Manesh’s ordeal. He has been constantly abused and harassed by Army officials and even a plea to Defence Minister AK Antony, by his wife has not helped matters.

Manesh went into a coma for four months after being hit by a grenade thrown by terrorists. The right side of his body is paralysed and a splinter is still lodged in his head. During the NSG operation in Hotel Oberoi, Manesh saved 40 people and eliminated two terrorists before being hit.

After a wheelchair-bound Manesh was discharged from hospital, the Army posted him to the Territorial Army Unit in his hometown Kannur. He was also allotted a bystander to help him. Manesh belonged to the 27 Madras Unit of the Madras Regiment and was in NSG on deputation.

Manesh’s troubles began when he went in for Ayurvedic treatment, which helped him to the extent that he started walking small distances with the help of a cane by the end of 2009.

However, the Army refused to meet his medical expenses claiming that Ayurveda was not approved for reimbursement. After the Delhi High Court’s intervention, the Army was forced to pay the bills as a special case.

On September 17, the Army issued Movement Orders to Manesh asking him to join the Unit in Delhi . Manesh’s pleas urging the Army to let him remain in his hometown Kannur, where he was accommodated on compassionate grounds, were not entertained by the authorities of his Unit.

Shockingly, the Army authorities took the decision to move Manesh a week after his wife Sheema appealed to Defence Minister AK Antony urging him to retain her husband in the hometown station of the Territorial Army, given his physical condition.

According to officials in the Defence Ministry, on getting her petition, Antony instructed the “authorities concerned” to retain Manesh permanently in his hometown unit of the Territorial Army as a special case. Despite this, the Army Unit ordered Manesh to join Delhi by October 30. Meanwhile, the authorities also called back the helper who had been assisting Manesh to move around for the past five years.

After all doors were shut on him, Manesh approached the Delhi High Court. The bench, headed by Justice Gita Mittal and Justice VP Vaish stayed the transfer order on October 22. The next hearing of the case is posted on January 24.

Apart from citing his physical inabilities, Manesh said in the Writ Petition that he was abused and threatened by the Commanding Officer of 27 Madras Unit. His wife’s petition to Antony clearly talked about constant harassment and threats by the authorities of the Regiment. “Due to the harassment by the authorities, he suffered illness, fits and headaches,” said Sheema’s letter to Antony .

Manesh, Sheema and their five-year-old son live with aged parents in Kannur. He is currently undergoing Ayurvedic treatment twice a month at a hospital 200 kilometres away from home.

[This report was published in "The Pioneer" on Nov 26, 2013]

Note : One good thing happened - I got call from Defence Minister AK Antony around 10 am, promising immediate action to ensure justice to PV Manesh.  By first week of March 2014, orders were issued to retain Manesh in his home town Territorial Army Unit in Kannur District, Kerala. Feel so happy as journalist to bring justice to a wounded soldier of 26/11 terror attack. 

JPC probe on 2G Scam: The absurd political theatre

FIRST THE SCAM, THEN THE SHAM

J Gopikrishnan - October 17, 2013 – The Pioneer OpEd

As expected, the Congress-dominated Joint Parliamentary Committee has given a report on the 2G Spectrum scam that clears Prime Minister Manmohan Singh and Union Minister for Finance P Chidambaram, and puts all the blame on former Minister of Communication and Information Technology A Raja. This dubious report, prepared without summoning the trio by the JPC headed by PC Chacko, is among the darkest chapters in India’s parliamentary system. The Congress has once again shown its arrogance and disrespect to Parliament by achieving its dubious designs through a majority of votes, with the help of its bargainable and perennial supporters like the Samajwadi Party and the Bahujan Samaj Party. Mr Chacko had no qualm in accepting the Congress spokesperson’s post during his stint as JPC Chairman. His role and job was to provide an escape route to the Prime Minister and the Finance Minister.

But the worst was the performance of the two JD(U) Members of Parliament in the JPC. They were absent during the final voting to adopt the report. These MPs had a few months back rejected the findings of Mr Chacko-led JPC and signed on a memorandum along with BJP members of the panel for the dismissal of Mr Chacko. One of them, Mr Sharad Yadav, had been vocal in Parliament for the past five years on the 2G Spectrum scam. Due to his party’s new political line, he and his party colleague had to play the abstaining drama, facilitating the Congress to get a walkover.

The scam basically happened during Raja’s period. But the Congress cleverly argued for a probe into telecom deals from 2000 in a bid to catch the BJP off guard. Then it further went back to the period from 1997. This has been the Congress’s strategy when it has been hit by scams. The same strategy was adopted in the coal block allocation irregularity; the party-led Government extended the probe to 1994.

The saddest part is that the JPC had been used as a tool to bully then Comptroller and Auditor-General Vinod Rai. The Congress was showing its wrath on him for exposing its Government’s corruption. Mr Rai was summoned five times and literally ragged by members of the Congress. All anger on Mr Rai was over the calculation of the huge presumptive loss — ranging from Rs 45,000 crore to Rs 1.76 lakh crore. The CAG’s findings were ratified by the Supreme Court in several orders and judgements, including in the cancellation of tainted 122 licences.

The Department of Telecommunications, which parroted now Telecommunications Minister Kapil Sibal’s infamous ‘zero loss’ theory, thought nothing of writing to the JPC about the alleged Rs 42,000 crore loss during the NDA regime. The JPC was used as a tool promote this fictitious calculation in a bid to indict  former Prime Minister Atal Bihari Vajpayee.

After all, the theory of loss of more than Rs 42,000 crore is a laughable one. In those days, a mobile phone user had to pay a monthly rental charge of Rs 500. That means, Rs 6000 were paid annually for holding a mobile phone. In 1999, considering  worldwide practices, the Government decided to waive this fee. After 13 years Mr Sibal says this decision led to a huge loss. The Congress-dominated JPC wants us to believe the tainted Telecom Department, but not the findings of the CAG.

Moreover, Mr Vajpayee’s name was added in the list of witnesses to be summoned. These attempts were  nothing but part of the dirty tricks department of the Congress. Mr Chacko now says that Mr Vajpayee’s name was inadvertently figured in the list. What an explanation!

When  Opposition MPs demanded the summoning of Mr Chidambaram, it the JPC went for a vote, knowing it had a majority. According to the judgement of the 2G Special Court, Mr Chidambaram and Raja were party to two decisions. First, fixing the price of the spectrum at dirt cheap price, and second, offloading of shares of tainted companies to multinationals at exorbitant prices. Raja became an accused primarily for these two reasons.

However, the courts said later that petitioner Subramanian Swamy did not prove the criminality of Mr Chidambaram. Is it the duty of Mr Swamy to find the criminality of Mr Chidambaram? Anyway, the courts did not ask the Central Bureau of Investigation to treat Mr Chidambaram like Raja.

Whatever the fans and cronies of Mr Chidambaram argue, the fact is that he is politically, administratively and morally responsible for  the sins charged on Raja.

The JPC did not touch the subject of the Aircel-Maxis scam, which is an open and shut case for fixing the fate of Mr Chidambaram and Mr Dayanidhi Maran. This dubious deal was approved by Mr Chidambaram, by violating all norms. The deal, worth more than Rs 4,000 crore, had no mandatory Cabinet Committee on Economic Affairs approval. Maxis acquired almost 100 per cent shares in Aircel, while the rules permits a maximum of 74 per cent. There was a huge variation in the sale of shares. Seventy four per cent was sold for around Rs 4,000 crore and the rest went  for  a pittance of Rs 30 crore in same period.

The 2012 Budget Session of Parliament came to a standstill on revelations about the complicity of Mr Chidambaram in the Aircel-Maxis deal. But Mr Chacko, who jumped on a tainted retired auditor’s dilly dallying utterances (a planted one), kept his eyes, ears and mouth shut.

Mr Manmohan Singh, a mute spectator in the 2G scam, became a laughing stock, when he offered to appear before the Public Accounts Committee, while remaining silent over appearing before the JPC. Raja and Mr Chidambaram may have fooled the Prime Minister in the allocation of 2G licences, but that is no excuse for the Prime Minister’s conduct.

The irony is the dissent notes of the Opposition MPs would also go through the editing process by the JPC Chairman. And these edited dissent notes will also be kept as attached with the majority MPs’ report. And what will happen to this politically cooked-up report? There will be chaos when it comes to Parliament and as usual, the House will adjourn. No debate will take place. That is what the perpetrators of the 2G Spectrum scam want. 

The pertinent question is: Should cases related to corruption be decided on voting along political lines? The JPC probe in the 2G issue exposes the pitfalls and uselessness of a parliamentary probe, where ultimately every decision is taken on blind political affiliation. 

The silver lining has been the Supreme Court’s intervention to monitor the CBI probe. Credit goes to Mr Swamy and Mr Prashant Bhushan. At least Raja and some bribe-givers were caught.

The Special Court was set up to hear the case on a daily basis. Hopefully, the judgement will come by mid-2014. Meanwhile, what of the others who have escaped? Answer: Let us leave it to the people’s court, which will give its verdict by May 2014.

Choppergate kingpin's UK home on sale

J Gopikrishnan |  New Delhi

July 01, 2013

While the Indian and Italian probe agencies are still uncertain about his whereabouts, the fugitive Christian Michel, a major beneficiary of the AgustaWestland chopper scam, has put out an advertisement for sale of his plush home in  London .

According to the advertisement, Michel wants 4,75,000 British Pound Sterling (more than Rs 40 crore) for his home in  Chelsea ,  London .

The Italian probe team had nabbed   another middleman Guido Ralph Haschke, but Michel remained out of their clutches. According to the charge sheet filed in an Italian court, out of the total commission of around 51 million euros (Rs 360 crore), Michel had received a major portion of 31 million euros (Rs 218 crore).

Michel’s father Wolfgang Richard Michel was very active in Indian defence deals in the 80s and the 90s and was close to the Congress party leadership. Wolfgang, who passed away in August 2012, was a prominent arms dealer in aerospace industry.

He had played an active role in arms supply by Britain to Libyan dictator Gaddafi. His links also spread to Russia ,  Iran  and  Iraq . His son Christian Michel had taken over his father’s business in the early 90s.

The house sale advertisement, that  appeared in the property website Rightmove, shows several photos of exteriors and interiors of Michel’s home. Marsh & Parsons, a property firm in  Chelsea  is entrusted with the sale of this home. The huge house, close to River Thames, carries the address: Old Chelsea Mews,  18 Danvers Street , SW3.

This is the address assigned by Michel’s father Wolfgang to a company registered in  Panama, where he routed commission from arms deals across the globe. Wolfgang had registered this company in 1995 along with one Vikram Singh from  New Delhi . The company called Keyser Incorporated, registered in  Panama  was taken over by his son Michel.  

Christian Michel alias Christian James Michel left  London  around 2005. For the last seven years, he has been living in  Dubai . He last visited New  Delhi  in October 2012. He was forced to leave  London , after he was declared insolvent. After the insolvency, he was barred from becoming a director in those companies and was forced to dissolve all eight companies registered in the  UK .

According to Italian newspapers, “mysterious Michel” was known as the close confidant of Giuseppe Orsi, the arrested chief of Finmeccanica, the maker of the AgustaWestland choppers.

“Born in 1961, Michel is little known to the public. On the internet, there is no evidence of his business or his statement. Not a photo or an interview. Yet, Michel is very well known in Defence establishments in  New Delhi ,” says Lettera 43 the Italian newspaper report titled “Christian Michel, the English middleman of Finmeccanica.”

Michel’s sister Caroline Michel is a well known literary agent in  UK  and chief of a noted publishing house Peter Fraser and Dunlop. Michel is currently running a trading firm called Global Services FZE in Dubai Airport Free Zone and believed to be staying in the posh Palm Jumeirah area in  Dubai .

[The report was published in 'The Pioneer' on July 1, 2013]

Hectic lobbying to increase gas price to provide bumper to Reliance Industries Limited

GOVT WANTS TO HIKE GAS PRICE, HELP RIL; MINISTRIES RESIST

J Gopikrishnan / New Delhi

May 30, 2013

As the countdown has started for the end of the UPA Government, a move is underway to sharply increase the price of the indigenously produced natural gas. A Cabinet note shows that a section of the Government wants to bring the domestic price on a par with international rates. The move, which would come as windfall for Mukesh Ambani’s Reliance Industries Limited (RIL), has triggered sharp differences among various Ministries.

According to the note prepared by the Petroleum Ministry for consideration of the Cabinet Committee on Economic Power Ministries are opposed to any price hike, the Finance and Petroleum Ministries and Planning Commission are and Planning Commission varies (Million Metric British Thermal Units) and $14 per mmbtu.

The note released by CPI veteran leader Gurudas Dasgupta last week to the media clearly shows that Fertiliser and Power Ministry are opposing the hike citing national interest and fearing huge loss to exchequer.

Fertilizer and Power sector are the major consumers of natural gas. According to Dasgupta, the rate suggested by Finance, Petroleum and Planning Commission reflects the wishes of Mukesh Ambani’s RIL, which will be major beneficiary of the largesse. At present the Government is purchasing gas at the rate of $4.2 per mmbtu. This rate was fixed by an Empowered Group of Ministers (eGoM) few years back.

In a series of letters to Prime Minister Manmohan Singh, CPI(M) leader and member of the Standing Committee on Petroleum and Natural Gas Tapan Sen has pointed out that the current price of $4.2 per mmbtu itself is a bonanza to the RIL. In his letters, Sen pointed out that the RIL quoted $2.4 per mmbtu for supply of gas to NTPC in an international competitive bid.

The current controversy started after the Rangarajan Committee recommended a high rate of $8.2 per mmbtu for the purchases of domestically produced gas from April 2014, with provisions of specific increases in each stage in the coming five years. The committee’s report was submitted in December 2012. In India , the major gas producers are public sector undertakings ONGC and Oil India with around 60 per cent of total output, and the major private player is RIL, which started controlling the sector after its production started from KG Basin. According to the estimates of Petroleum Ministry, by 2016-17 the private players will control more than 50 per cent of the domestic gas production in India .

The Fertilizer and Power sectors will be hit hard in case of increase in the price of the gas from current level of $4.2 per mmbtu. Petroleum Minister Veerappa Moily’s arguments that the increase in price of gas would earn more revenue to the public exchequer were totally untenable as the Government had to shell out huge subsidies in Fertilizer and Power sector.

Moily’s arguments that ONGC and OIL India would benefit more did not take into account the fact after gas price hike, the Government would be required to pay huge subsidies in different sectors, which The ultimate beneficiary would be the private gas producing contractors, who wants to get money in dollars for a domestic production.

Is the UPA Government ignoring the interest of the nation over corporate interests?

[The report was published in ‘The Pioneer’ on May 30, 2013]

RAM TERI GANGA MOILY!

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.

.................................................. 

Moily's son speaks out : 

  

Pioneer News Service / New Delhi March 20, 2013

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  March 21, 2013

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.