The Jay Amit Shah story: Low on Facts, High on innuendo

After a hiatus of a few months, journalist Rohini Singh makes a comeback. Singh was last seen as a journalist with Economic Times. She was on the forefront of their coverage of the Uttar Pradesh elections of 2017. To say she read Uttar Pradesh wrong, would be an understatement, and soon after the results she disappeared from public gaze as well as social media. In 2016, she had attempted to expose “irregularities” relating to then Gujarat CM Anandiben Patel, and the attempt was debunked here.

Now, around a month before Gujarat elections, she is back, this time with a leftist site called TheWire, which itself has been party to fake news in the past. Singh’s latest scoop is titled: “The Golden Touch of Jay Amit Shah” and documents the rise of Amit Shah’s son’s businesses, and how they coincide with Narendra Modi becoming prime minister. Of course, words like “scam” are not thrown around, but nudge-nudge-wink-wink statements and questions are asked.

But this article is not about Rohini Singh. This is about facts. And the lack of facts in the article in thewire.

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The “Golden Touch” setup

Firstly, Singh places the proposition before us, which justifies the title of “Golden touch”:

The innuendo is clear: No sooner did Modi become PM, a failed business of Amit Shah’s son, became an overnight success. First of all, the year in which the revenue shoots up, coincides with the year in which Temple Enterprises Pvt Ltd,  went in for one major change: Jay Amit Shah was appointed as director in the company just before the financial year started, in January 2015. Perhaps, this is when the company decided to expand.

Secondly, “Revenues” or “Turnover” refers to total sales or service income. “Profit” or “loss” refers to such Revenues minus all expenses incurred. Now, let us tabulate the above data:

The above table is made up only from the data provided by Singh. Does it seem odd, when you notice that she mentions the profit figure for 3 years, but then in the 4th year, “forgets” the profit figure and instead focuses on turnover? One of the crux of the article is that the turnover jumped 16000 times, hence Mr Jay Amit Shah has the “golden touch”. But would a man with the “golden touch” incur a loss of Rs 1,48,00,551 (Rs 1.48 crores)? Yes, as per the same Registrar of Companies (RoC) filings (link at the end) which Singh quoted so much, this company with Rs 80.50 cr revenues, had Rs 81.99 cr as expenses, and incurred a loss of Rs 1.48 crores as soon as Modi came into power.

Of course, revealing such information would puncture the entire narrative that Jay Amit Shah’s business was successful just as Modi came into power. Hence, this small piece was hidden by Singh.

But was it hidden completely? No. She mentions this loss in another paragraph, after she has built the case of the “golden touch”. However, here there is no context given, and more innuendo follows:

In a latter paragraph:

Note the innuendo: suddenly stopped its business. Net worth “fully eroded”. Little abnormal. The language clearly raises suspicion on the “sudden” closure and of the claim of net worth being eroded. Some basics again: Net worth is the amount by which assets exceed liabilities, which is generally equal to Shareholders’ funds (Capital) + Accumulated profits/loss. Have a look at the company’s Net Worth in the Financial year when it had the “golden touch”, and within 7 months of which, it stopped business activities:

From Rs 20 lacs of shareholders’ funds on 31.03.2015, thanks to the “golden touch” year, the networth became NEGATIVE Rs 77.99 lacs on 31.03.2016.

So to put this entire thing in context: Jay Amit Shah had a “golden touch” due to which, his company incurred a loss of Rs 1.48 crores as soon as Modi came into power, ended up with a negative net worth of Rs 77.99 lacs, and shut down business activities. Quite a “golden touch” that!

Too completely prove, how illiterate or devious Singh is, read this paragraph:

Rohini Singh, former journalist at Economic Times, now writing for, just claimed that Reserves and Surplus which turned negative Rs 80.2 lacs from positive Rs 19 lakhs “jumped”! Even grade school children are taught that numbers with brackets with them are negative figures, and basic financial literacy means you know that negative reserves are losses!

After the above, it may not even be necessary to read the remaining article and take any of its “facts” on face value.

The mysterious loans given to the man with the aforesaid “Golden Touch”

The next thread of innuendos by Singh is how Jay Amit Shah’s concerns got loans from various entities. Firstly, this loan:

In another paragraph, Singh mentions that  KFIS is a Non-Banking Financial company (NBFC). As seen above, Singh again puts up some figures: Loan given Rs 15.78 crores,  Revenue Rs 7 crores. Prima facie these numbers can evoke shock. How can someone with an income of Rs 7 crores lend Rs 15.78 crores? Well that is what NBFCs do!. An NBFC is almost like a bank i.e. it lends money to borrowers, but unlike a bank, does not accept bank deposits from public. Hence it is called a “Non-Banking” Financial Company.

The revenue earned by NBFCs is of course interest on loans. Thus, if an NBFC extends loans of Rs 1000, the income can be expected to be around Rs 100 to Rs 200 from that loan, depending on the interest rate varying from 10% to 20% (on a very high side).  Thus it is perfectly normal for NBFCs to have low revenues but high loans. For example, Bajaj Finance, which is one of India’s biggest NBFCs had Rs 9977 crores Revenue vs Rs 57,683 crores of loans given for March 2017 i.e. Loans were almost 6 times more than revenues. Singh clearly does not understand financial companies. Lastly, she claims that the loan given was not mentioned in the balancesheet of KFIS. Do banks or NBFCs list out the names of all their borrowers on the balancesheet? Are they even allowed to do so? No! Just to be sure, check the above linked balancesheet of Bajaj Finance, which is also a listed NBFC.

Next she mentions how Kusum Finserve, another concern of Jay Amit Shah, had managed to raise a loan of Rs 25 crore from a cooperative bank against collateral valued at under Rs 7 crore. Oddly, she herself busts this, when she puts forth the reply from Jay Shah’s lawyer. There was no “loan” of Rs 25 crores. There was only a Letter of Credit (LC) of up to Rs 25 crore.

What is an LC? An LC is an obligation taken by a bank, to pay the agreed amount to the seller on behalf of  its customer. An LC is mostly used for imports, and the money is paid to the seller abroad, against an import bill. The amount is utilised as and when imports are made by the buyer, and replenished as and when further sales are made. Since the amount under an LC is paid against purchases of actual goods, the goods act as security for such amount, and hence the initial security given is usually lower than the total LC limit. When the bank actually pays the money to the selelr abroad, it has dual security: That of the property given before using the LC, and also of the goods which are bought using the LC. Again, a business journalist should have known this.

The last loan in question is a Rs 10.35 crore loan from a public sector enterprise, Indian Renewable Energy Development Agency (IREDA). She again uses innuendo to question how a Public Sector enterprise gave a loan to the same Kumsum Finserve. This concern had applied for a loan for the project of for a 2.1 MW wind energy plant. It is also mentioned that “The Wire has reached out to IREDA about its lending policies and will add its response later.”

Maybe the wire did not have an internet connection, because the entire terms and conditions of availing loans from IREDA is available on the site, and any private entity in India can apply for a loan! It is important to note here that the mission of IREDA is to promote, develop and extend financial assistance for renewable energy and energy efficiency/ conservation projects. It has sanctioned around Rs around Rs 37,000 crore of credit for clean energy projects so far and further Rs 28,000 crore to developers, which aids generation capacity of around 7,000 MW. It plans to sanction around Rs 13,000 crores this financial year. Not quite the puzzle now is it?

Low on Facts, High on Innuendo.

So what does this major “expose” by Rohini Singh prove: It shows how a company owned by Amit Shah’s son, made a loss of Rs 1.48 crores as soon as Modi came into power, and eroded its net worth, forcing it to shut operations. Another company took standard business finance facilities from a cooperative bank. These finance facilities were misrepresented by Singh as “loan”. It also made use of a Government scheme to promote renewable energy by taking a loan for a wind power project. While narrating this Singh could not even distinguish between a negative reserves position from a positive position.

Perhaps this is why The Economic Times did not have faith in Singh.


Annual Report of Jay Amit Shah’s company Temple Enterprise Private Ltd

Copy of article in TheWire (in case it goes down in a “cyberattack”)

With inputs from @muglikar_  and @attomeybharti 

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