Nothing wrong in getting investments from contractors: Nitin Gadkari tells NDTV

Nothing wrong in getting investments from contractors: Nitin Gadkari tells NDTV

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New Delhi All of last week, BJP president Nitin Gadkari was the focused target of Arvind Kejriwal's anti-corruption expose. Political opponents seized the opportunity to level charges of their own, accusing Mr Gadkari of using shell companies to fund his business, and of receiving investments from contractors. Today, in a first on Indian news television, Mr Gadkari came to NDTV's studio to counter those allegations.

Mr Gadkari was the Public Works Department Minister of a Shiv Sena-BJP government in Maharashtra in 1995-99, when a company called Ideal Road Builders was awarded hefty contracts. Ideal did remarkably well in those years - its turnover rose from Rs 41 crore in 1996 to Rs 67 crore in 1999.

A little after Mr Gadkari demitted office, in 2001, Ideal Road Builders invested in Mr Gadkari's Purti group of companies in 2001, picking up almost Rs 1.85 crore of shares. Ideal Road Builders has since become a subsidiary of IRB Infra Developers Limited. IRB infra developers, in a response to a questionnaire from NDTV, said in an email, "Ideal Road Builders Private Limited made an investment of Rs 1.85 crore in equity shares of Purti Sakhar Karkhana in 2001. At that time, investment in sugar factory in Vidarbha region was felt to yield promising returns." Mr DP Mhaiskar, the founder of the Ideal Road Builders, also invested in approximately Rs 2 crore of shares. Together, they control about eight per cent of Purti Group.

In financial year 2010, the Purti Group received a loan of 165 crores from Global Safety Vision, a company started by DP Mhaiskar. With this one loan, Purti was able to repay all its outstanding debt. Surprisingly, in its last regulatory filings Global Safety Vision had only 1 lakh paid up capital.

Opponents allege that these loans and investments are quid pro quo. But Mr Gadkari today vehemently denied that, saying that he has not done any favours to Ideal Road Builders. He defended his ties with businessman and founder of Ideal Road Builders, DP Mhaiskar saying, "I can accept equity from anyone, there is nothing wrong. I am friends with Mr Mhaiskar and many contractors are my friends... Purti has losses of 64 crores, Mhaiskar loaned me 165 crores from his company, and I have repaid him 64 crores." Meanwhile, no response was forthcoming from Mr DP Mhaiskar despite sending him two detailed questionnaires.

But there are other questions about the investors of the Purti Group, which has eight group companies that range from power, sugar, ethanol, alcohol, bio diesel among others.

NDTV's investigation found many 'mystery' owners and investors. While the total share capital of the company is Rs 68 crore, almost Rs 50 crore comes from about 18 such companies. In other words, these companies own 70 per cent of Purti. Mr Gadkari, who is shown as Chairman on the company's website, only owns about 200 shares.

When we set out to find these companies and its directors across various cities we hit a dead end. Two of the firms - Swiftsol India and Earnwell Traders are registered at a chawl in the Mumbai suburb of Malad where there is no trace of any company. A family has been living there for over 20 years and have never heard of any such company. At another address on Hajibapu Road, again in Malad are the registered offices of Chariot Investrade, Regency Equifin and Leverage Fintrade but again all we find is a family who is clueless about these companies. These companies have made investments worth Rs 17 crores in Purti. Similarly in Kolkata, our correspondent went looking for an office on MD Road and was told none exists. Tracing the directors of these companies - some of whom are common - too was futile.

Congress leader Digvijaya Singh has alleged that Mr Gadkari "channelled his ill-gotten wealth through shell companies." Absolutely not, said Mr Gadkari stoutly, suggesting that the addresses had changed. "A lot of stakeholders have changed their address. There are 10,000 stakeholders," he said. Mr Gadkari said he could not be expected to have ready details, but, on prompting, said he could furnish "addresses of all 10,000."

The BJP president was dismissive of Mr Singh's charges; the Congress leader had been making allegations for a long time, he said, and added that he was ready for any inquiry. "Digvijaya Singh has been making charges for a long time," he said.

Mr Gadkari is the chairman of the Rs 300-crore Purti group, which, apart from sugar, has interest in power and other things. But the BJP chief does not see a conflict of interest in his being a leading politician and a businessman. His latter role, he says, has ceased to be pertinent. "I am the chairman, I am not director. I have resigned," he said today. His sugar company is one of the biggest companies in the Vidarbha region; Mr Gadkari said that business is an agriculture cooperative, set up for social good to help farmers in the region driven to suicide.

Arvind Kejriwal has accused Mr Gadkari of thoroughly compromising his obligation as a leader of the opposition and colluding with the ruling Nationalist Congress Party (NCP) in Maharashtra for furthering his business interests at the cost of farmers. Mr Gadkari, who recently got an unprecedented second term as BJP president, has denied any ties with the NCP and its top leaders and says this is an effort to politically malign him. He said all his efforts have actually been focused on helping beleaguered farmers in Vidarbha. The BJP is in opposition in Maharashtra, where the NCP is in an alliance government with the Congress.

Mr Kejriwal launched a political party earlier this month, a spin-off from the civil society group, India Against Corruption. He first focused on the alleged corruption of businessman Robert Vadra, the son-in-law of Congress president Sonia Gandhi. Mr Gadkari was his second target.
Story First Published: October 20, 2012 16:22 IST

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