Rahul Gandhi just shared The Wire’s comprehensively debunked hit job on Piyush Goyal with some caustic comments without realising his self-goal perhaps. He is no stranger to self-goals. In fact, not so long ago he had done exactly the same when we at OpIndia has preemptively busted an imminent hitjob against the Finance Minister, Arun Jaitley. After our article, ‘The Wire’ had conceded that “there was not much of a story to pursue after all“, which is why they had dropped the story after receiving a response from Jaitley and his daughter’s firm. Mr Rahul Gandhi had then proceeded to plug the very article where ‘The Wire’ had admitted to no impropriety on the part of Arun Jaitley, in a bid to tarnish his image. We had then also speculated whether Rahul Gandhi actually knew of the imminent hitjob.
Of course, at that point in time, it was just a statement in jest. But the incident seems to have come a full circle. Today, ‘The Wire’ published a half-baked, shoddy hitjob against Piyush Goyal which we debunked comprehensively. But being the master of self-goals, Rahul Gandhi couldn’t resist himself, perhaps, and tweeted the article with his usual gibberish.
So to begin with, Rahul Gandhi mentioned the Jay Shah episode, which was debunked and The Wire faces a 100 crores defamation lawsuit for it. He mentioned Shaurya Doval article by The Wire which was again debunked by us. And then, he mentions the Nirav Modi scam which landed squarely on the Congress’, specifically, P Chidambaram’s doorstep.
He then proceeds to talk about the latest hit job in an attempt to tarnish the image of Piyush Goyal, who is not only an all-India second rank holder Chartered Accountant and second rank holder in Law in Mumbai University, participated in Leadership Programs at Yale University, Oxford University and Princeton University but has also been tackling the mess left behind by the Congress government in the power and railways sector.
There are certain allegations that the article makes which we must analyse to understand how Rahul Gandhi has made a self-goal.
Conflict of interest in SBI board membership and Directorship of Shirdi Industries
I start with this allegation because the lack of due diligence is so apparent in this charge, that it needs to be pointed out at the very onset. Piyush Goyal retired from the membership of the SBI Board on 25th February 2008. He accepted the Directorship of Shirdi Industry on 15th April 2008. There is almost a 2-month gap between the two dates. I wonder how Rohini Singh assumed or insinuated conflict of interest and how in the world did Rahul Gandhi further such preposterous lies.
In fact, if one takes a closer look at the financials of Shirdi Industry, one would realise there was no outstanding SBI loan in the books of Shirdi Enterprise when Piyush Goyal became the Director in 2008. How then is an insinuation of conflict of interest made? Or did Rahul Gandhi not read the article at all?
Why would Piyush Goyal be the Director of the company with 650 crores loan default
Now here is where the real self-goal surfaces. Piyush Goyal was the Director of the company from 2008 to 2010 (when he resigned post being elected to the Rajya Sabha).
Shirdi Industry was a profit-making company. In 2007-08, they made a profit after tax of Rs. 7.52 crores, followed by profit after tax of Rs 17.28 crores and Rs. 26 crores in 2008-09 and 2009-10 respectively. In fact, even after Piyush Goyal resigned in 2010, the company continued to make a profit of Rs. 33.15 crores in 2010-11. Hence, there is no conceivable reason why someone with the business background of Piyush Goyal wouldn’t want to be involved with the enterprise, that too when he was only a non-executive chairman which is not involved in the management of the company as a promoter.
So when did the trouble begin for Shirdi Industry, if throughout, the enterprise was profit-making?
The BusinessLine article plugged by The Wire itself states:
The company, which manufactures decorative laminates and MDF (medium density fibre) boards, was doing well till 2010 and filed for IPO to raise ₹120 crore for expansion. With clearance for IPO delayed by over 27 months, the company borrowed from a consortium of eight banks and dipped into reserve for funding expansion.
The thing to remember here is that Piyush Goyal resigned in 2010. After that, there was a delay of 27 months for clearance for IPO. Having not received the requisite funds on time through IPO, as Shirdi Enterprise had planned, they dipped into reserves and borrowed money from banks.
Throughout the 27 months of delay, it was the Congress which was in power. The policy paralysis, market gloom, stock exchange dips etc resulted in such a delay. Now, what Rohini Singh and The Wire wants to do, is hold Piyush Goyal retrospectively responsible for the Congress’ mess that drove a profitable company into running a debt, when Piyush Goyal wasn’t even associated with the said firm.
Insinuating that Shirdi Industry is a crooked organisation that wilfully defaulted on repayment of loans
It is The Wire’s intention to insinuate that Shirdi Industry is a shady firm that wilfully defaulted on repayment of loans. Perhaps Rohini Singh forgot to read the NCLT order in full and I can jog her memory.
The NCLT, which is a quasi-judicial and independent body with no government interference, appointed another independent body to conduct a forensic audit of the firm. The independent auditor said that there was no wrongdoing by the firm and that the debt was incurred in the natural course of business. In fact, the Resolution Plan that was submitted was approved by 99.43% of the creditors. Which is to say, 99.43% of the people/institutions that were owed money agreed to the repayment plan that was suggested.
Earlier with the SARFAESI Act, the entire company went into liquidation to pay off the creditors thereby resulting in job losses. The NCLT gives the opportunity to mutually decide on a valuation and pay the creditors over a period of time that is decided by the creditors. With this, the creditors recover their money, and the business also doesn’t cease to exist, saving jobs, promoting economic activity and in this case savings foreign exchange since these products were an import substitute.
Again, the article plugged by The Wire itself has this to say :
It is clear that there was a repayment and revival plan in place, sanctioned by the NCLT, an independent body and agreed upon by the creditors and the business entity. Let us reiterate here, that this is happening 8 years AFTER Piyush Goyal has resigned from the company in 2010.
This actually goes to show the effectiveness of the new insolvency and bankruptcy code that was introduced by the Modi Government.
Why were the promoters the only bidders even after an ordinance in place that forbids promoters from bidding for the company
This insinuation is actually hilarious. The ordinance introduced by the Modi Government that forbade promoters from bidding for their own company was introduced on 23rd November 2017. The NCLT admitted Shirdi Industry’s case in May 2017. Months before the ordinance came into play. And since the Ordinance was not applicable retrospectively, it didn’t change the course of NCLT order with respect to Shirdi Industry. In any case, as per NCLT order, Committee of Creditors approved the resolution plan on 25th October 2017. Which is to say, that before this ordinance was promulgated, the bid of the promoters was accepted by the NCLT.
In fact, an excerpt from the NCLT order mentions that advertisement was issued inviting expression of interesting seeking investment for which there was no response, owing to which, the NCLT allowed the promoters to bid.
If the ordinance came much after NCLT admitted the firm’s case and the promoters were allowed to bid before the ordinance barring promoters to bid and also because nobody else came forward, how Rohini Singh came to the conclusion of “special favours” is a mystery.
Perhaps Rohini Singh was upset about the streamlining of the Financial Sector that the Modi government has undertaken. From introducing the Insolvency code that enables creditors to get back their loan/ debt after years of failure of Bankers to recover their dues either through BIFR or SARFESI or ever CDR etc. and resulting in massive job loss and financial distress. But showing firm resolve the Modi government has introduced Insolvency and Banking Code and the NCLT process to clean up the stress in the Banking system caused due to indiscriminate lending particularly during 2008-14 under the Congress government.
Perhaps Rohini Singh can’t read dates right, which is why she didn’t realise that none of the gibberish she wrote happened while Piyush Goyal was still the director of the firm. Perhaps she also didn’t realise that the company she accuses of defaulting loans ran up massive debts during the Congress government for which Rahul Gandhi should be answerable.
Rahul Gandhi, by plugging that article, basically admitted to the effects of rampant policy paralysis during Congress regime that drove the business’ to the edge of bankruptcy.
Perhaps Rahul Gandhi trusts The Wire so much, that he is willing to plug gibberish without even reading the article, thereby making a fool of himself. Perhaps Rahul Gandhi is so used to embarrassing himself, that another embarrassment wouldn’t matter as long as the narrative goes in his favour, even if the narrative is based on falsehoods.
Perhaps it’s time Mr Rahul Gandhi gets himself ‘Re Wired’ because the current situation is doing him no favours. Cambridge Analytica anyone?
Editor, OpIndia.com since October 2017