On 8th October 2017, left leaning portal TheWire.in published an “expose” on Jay Amit Shah and his business dealings. The author, Rohini Singh tried to pass off a loss making company as a successful one, negative reserves as a “jump in reserves”, letters of credits as loans, and other normal loans as special favours. All this was done in order to link the alleged rise of Jay Amit Shah’s company, with the rise of Modi as Prime Minister of India. We debunked all the baseless claims in this piece.
The site though, chose to brazen it out. The story continued to be on its site. However some obvious school-boy mistakes were quietly corrected. In fact even these corrections had to be further corrected.
Two Days later, NDTV’s Sreenivasan Jain caught up with the story and published his own report on the same. However, within two days, the story disappeared from NDTV’s website and Jain claimed that it was a “temporary takedown”, while the story was being checked for legal issues:
Its a temporary takedown, while certain legal issues are being examined. Lets not get ahead of ourselves. https://t.co/wXX0vVH6WI
— Sreenivasan Jain (@SreenivasanJain) October 12, 2017
It has been over a week now, but it appears that NDTV’s legal team has still not finished their checking for legal issues. The story still stands taken down. Jain on his part posted on Facebook yesterday, claiming himself to be mystified by the delay:
What is Jain alluding to? Is his intention to hint that there are some pressures on the “fiercely independent” NDTV, which is why the story is in limbo? Does this explain his anguish? Or is he trying to make a bad story look good by cloaking it in the shroud of martyrdom?
An archived version of the story is still on the web, and a glance through it may reveal why the legal team of NDTV may be uncomfortable with it. One of the claims made in the story is:
In 2015, however it shows as having received Rs 15.76 crore as an unsecured loan from KIFS Financial Services, a non-banking finance company (NBFC). However, KIFS’ papers show only Rs 1.16 lakh as unsecured loans advanced that year, as rent deposit. When contacted by NDTV, KIFS claimed that the loan to Mr Shah was a secured loan, part of the Rs 88 crore of secured lending by KIFS that same year (2015-16). If that is the case, KIFS would have lent a significant amount – 17 % of their order book – to a single company, not one with the soundest financial record. This quite apart from the unanswered discrepancy of the nature of the loan, with Temple describing it as unsecured, and KIFS as secured.
The crux of the issue here as per NDTV is, why would KFIS advance a substantial loan to Jay Amit Shah’s company which has no track record. The answers to this issue may be found in Jay Amit Shah’s reply to The Wire itself.
His response stated that promoter of KFIS, Mr Khandwala, was a sharebroker for the Shah family for several years, and had provided loans through his NBFC to Shah family concerns, much prior to this transaction as well. Thus the suggestion that such loans were extended because of Modi’s rise to the top post of the country sound slanderous, to say the least. Further, Shah also mentions that the the loan along with interest has been repaid in full, and TDS has also been deducted on the interest. NDTV did not mention these facts. Is this one of the reasons why NDTV’s lawyers are circumspect?
Another claim made by NDTV:
Another question, though, surrounds this loan. According to the RBI guidelines, urban cooperative banks cannot lend to stockbroking firms, or commodity brokers, against pledging of shares and other financial instruments. The bank, however, said Kusum Finserve is a firm trading in commodities, not brokering in them, and hence is exempt from those restrictions. But Kusum Finserve, in its filings, shows a bulk of its profits – 60% – as having come from “Consultancy”, and the balance from commodity trading. It is unclear what sort of consultancy a commodity trading company be engaged in. Could “consultancy” be used to describe revenues from brokering?
This observation from NDTV crosses over to realm of ridiculous. NDTV itself makes it clear that they are trying to bracket Kusum Finserve as a brokering company, hence their bias makes them allude that even “consultancy” income could be “brokering income”. This is being asserted by NDTV without a shred of evidence.
If NDTV had to cast aspersions on the “consultancy” income, they should have come up with some evidence, some proof, some documents to show that brokering income was being falsely reported as consultancy income. Instead, NDTV gives biased and baseless innuendos. Another issue the lawyers might have been unhappy about.
Next, NDTV also talks about a loan received by Kusum Finserve, from IREDA the power ministry’s lending agency for renewable energy projects:
Whether that includes firms from sharply divergent backgrounds, like commodity trading, remains unclear, as do the terms under which IREDA approved Mr Shah’s project
The allusion here is that how did a commodity trading concern like that of Shah, get a loan from IREDA.
Firstly, the loan was taken for a wind energy plant. Shah’s reply stated that the loan was being serviced regularly with no overdue payments remaining pending.
Secondly, the terms and conditions of obtaining the loan, which NDTV hints might have been violated, are mentioned on IREDA’s site. The eligibility conditions clearly state that the loan scheme is available to all Private Sector Companies/ firms/LLPs, and there is no restriction as to the nature of business or sector of such entity. Financial analyst Deepak Shenoy too had tweeted about this. He spoke about how even filmstars had owned windmills due to the attached tax incentives:
Was this another defamatory claim made by Jain in his piece, which the lawyers were uncomfortable with?
From Jain’s reaction (and the loopholes we found) it appears that the story may never be online again. He calls it “deeply unfortunate” and a “distressing aberration”, which hints that the story may be buried forever. It is possible that NDTV’s legal team has realised that the article is defamatory in nature considering it makes certain fantastical and ill found claims without a shred of evidence. In fact, even Jain may have been made aware of this, and this anguish may just be Jain’s way of saving his face?
However, one does wonder if there might be another twist in the tale and whether NDTV and Jain decide to stick to their seemingly shoddy story, publish it again, and brazen it out like the folks at The Wire.