New Delhi: Close on the heels of the news – first reported by The Wire – of railways minister Piyush Goyal’s links to the promoters of the defaulting Shirdi Industries, the Congress party on Tuesday alleged that other companies linked to him, his family and friends showed a similar pattern of business activity: an unprecedented rise in profits and earnings, and a referral to the National Company Law Tribunal (NCLT) for a ‘partial write-off of debt.
Highlighting the links between the Goyal family and their friends and these businesses, the Congress alleged that there are 11 such companies, including Shirdi Industries, that Piyush Goyal and/or his wife rotated off, to be replaced by individuals associated with the promoters of Shirdi.
The Congress produced documents to show how Goyal and his wife Seema Goyal were replaced by the same people – known friends of the family – in all these companies, in most cases after Goyal became cabinet minister.
Likening this with the “Jay Shah model”, the Congress sought Prime Minister Narendra Modi’s response on the issue, while reiterating its earlier demand of a judicial probe by a sitting Supreme Court judge.
Chart of directorships of Piyush Goyal and Wife. Credit: Compiled and released by Congress party at press conference
Congress spokesperson Pawan Khera highlighted the fact that a company owned by Seema Goyal with paid-up capital of Rs 1 lakh – Intercon Advisors Private Ltd – has ended up with earnings of Rs 30 crore, which he said meant earnings of Rs 30,000 per share for the total 10,000 allotted shares. “This must make it the most valued company in recent corporate history,” said Congress spokesperson Pawan Khera while addressing the press in the capital on Tuesday.
Goyal resigned as a director of Intercon on May 13, 2014, just before becoming a minister, and transferred his shares to his wife.
Presently, Seema Goyal owns 9,999 shares, and one share is owned by Dhruv Goyal – Piyush Goyal’s son. “It is a 100% family-owned company. Intercon Advisors Private Limited was incorporated in 2005-06. In the last 10 years, the company has earned a profit/earning of Rs 30 crore on a paid-up capital of Rs 1 lakh, which is 3,000 times (3,00,000%) of the paid-up capital. What is the source of earnings?” Khera asked.
“Interestingly, in the years 2007-08, 2008-09, 2014-15, 2015-16 and 2016-17, Goyal and family did not even disclose the complete source of earnings of Intercon Advisors Private Limited by merely describing it as ‘consultancy fee’, ‘short term capital gains’ or ‘profit on future and options’ without giving any details,” he said.
The company’s corporate filings reflect the fact that there is no normal business income or activity that had been specifically described, he alleged.
BJP’s response
Later on Tuesday night, the BJP reacted to the Congress press conference by saying Goyal, a chartered accountant, had provided “consultancy services” through the company. Since its inception, Intercon had accumulated reserves of Rs 30 crore based on these professional earnings. The BJP also said that the company had paid Rs 15 crore in income tax on its earnings and service tax of around Rs 6.6 crore.
Congress’s Khera claimed that Piyush Goyal, his wife, his brother Pradeep Goyal and sister-in-law Neeru Goyal on the one hand and Rakesh Aggarwal, Rakesh’s son Gaurav Aggarwal, Mukesh Bansal, Mukesh’s son Amit Bansal, Manish Shah and Prashant Shenoy on the other hand, are two groups of people who are intertwined in a group of 11 companies, including Shirdi Industries Limited.
The party also said that that despite Rakesh Aggarwal and Mukesh Bansal publicly admitting their close relationship to Goyal and family, and Manish Shah being a director on the board of Intercon Advisors Private Limited (a Goyal family-owned company), the nature of the business relationship, common business interest and loan exposures have never been explained by Goyal or the government.
Khera also listed the details of loans outstanding in the various companies run by Shirdi’s promoters.
Shirdi Industries Limited had a bank loan exposure of Rs 651.87 crore, which was settled on December 12, 2017 with a 65% haircut. Asis Plywood Limited, another similarly-placed company, has an exposure of Rs 458 crore. The company is already in liquidation, the Congress said. Rakesh Aggarwal was the director of the company between September 10, 2010 and March 3, 2017, and his son was its director between December 14, 2010 and March 1, 2013.
Asis India Infrastructure Limited also has an exposure of Rs 457 crore. Its directors are Amit Bansal and Sumit Bansal, sons of Mukesh Bansal.
Asis Industries Limited, another similar company, has a loan exposure of Rs 285 crore. Its directors are Gaurav Aggarwal son and Amit and Sumit Bansal.
Expressing apprehension about the size of this outstanding debt, Khera said he hoped that these loans/charges do not meet the same fate as the debt of Shirdi Industries Limited, a chunk of which had to be written off. He said that what is even more interesting is that Shirdi Industries Limited, Asis Plywood Limited, Asis India Infrastructure Limited and Asis Industries Limited have a common email address – bknath@asisindia.com
Posing a series of questions, the Congress said, “Why has Piyush Goyal not explained the nature of business relationship and common business interests in these 11 companies? Why is it that whenever Piyush Goyal/Seema Goyal or their family resigned as directors of the 11 companies, they have been replaced by the same set of people across the 11 companies? What is the exact nature of this intertwined relationship of Piyush Goyal? How did Intercon Advisors Private Limited (owned by Seema Goyal, wife of Piyush Goyal) with a paid-up capital of Rs 1 lakh end up earning Rs 30 crore in the last 10 years – earning of Rs 30,000 per share of the total 10,000 allotted shares? Is it not 3,000 times (3,00,000%) of the paid-up capital? Are Asis Plywood Limited with an loan exposure of Rs 458 crore, Asis India Infrastructure Limited with a loan exposure of Rs 457 crore and Asis Industries Limited with a loan exposure of Rs 285 crore headed the same way as Shirdi Industries Limited, wherein a consortium of banks was constrained to take a 65% haircut?”
Questioning the silence of the prime minister and finance minister on the entire issue, the Congress said that Goyal’s position as minister stands compromised, making it untenable for him to continue as a Union cabinet minister.
“He should forthwith be sacked and a judicial investigation be ordered through a sitting Supreme Court judge,” Khera demanded.
Arun Kumar Das is a senior journalist. He can be contacted at akdas2005@gmail.com
