Curious case of Temple Enterprise

Arranger fee, say Chartered Accountants, can be anything depending upon what you arranged! In the year 2014, Jay Amitbhai Shah’s company ‘Temple Enterprises Pvt Ltd.’ showed an income of ₹50,000 by way of the mysterious ‘ ‘Arranger Fee’.

Whatever the company ‘arranged’, it cost the company ‘miscellaneous expenses’ of around ₹31 thousand, leaving it with a profit of ₹18 thousand. But considering it had zero revenue and naturally zero profit the previous year, even ₹18 thousand would have looked ‘good’.

Even more curiously, the company, incorporated way back in 2004, appeared to have been there doing pretty much nothing. In the two preceding years ( 2012-13 and 2013-14) it has registered losses worth ₹1,700 and ₹6000 respectively.

The fortunes of the company, reported news website The Wire last Sunday, however, changed dramatically in 2015-16. It not only managed to secure loans worth over ₹50 Crore but it also bagged a lucrative order or orders from abroad worth as much, even as its turnover zoomed from the ‘arranger’s fee’ of ₹50,000 to almost ₹81 Crore. It is a different matter that the company still showed a loss of ₹1.48 Crore at the end of the financial year.

The report in The Wire did not ‘charge’ the son of the BJP national president of any wrongdoing. It asked though whether it was just a coincidence that the company’s fortunes changed for the better after Narendra Modi became the Prime Minister and Amit Shah the BJP national president in 2014.

So, the questions are what the company traded in 2015-16; why it had not done so in the first 10 years of its existence; and to which countries did it export agricultural produce?

It is worth noting that the company was incorporated in 2004, when Jay Amitbhai Shah was just 23 years old. But set up to trade in agricultural produce, it is not known why the company took ten years before doing any business worth the name.

During those 10 years also, the BJP was in power in Gujarat. Narendra Modi was the chief minister and Amit Shah the Home Minister of the state and a close confidante of the CM for much of this period. But none of this affected the business of Temple Enterprises Pvt Ltd. which was content to show zero revenue, zero profit and at the end of March, 2015 a reserve or balance of just ₹20 lakhs, peanuts in view of the mega trading it would soon get engaged in.

The second question, therefore, is why the company failed to do any business during 2004-2014 despite the right political connections. Could it be because BJP is a party with a difference and its leaders do not encourage crony capitalism?

“Temple Enterprise is in the business of import and export of agri commodities like rapeseed DOC, castor DOC meal, desi chana, soyabean, coriander seeds, rice, wheat, maize etc,” The Wire report quotes Shah’s lawyer as saying.

The 12-year old company was reportedly shut down barely weeks before Demonetisation was announced on November 8, 2016.

The third question, therefore, is why the company shut shop.

What is also not clear are the grounds on which one of Shah’s firms “trading in stocks and shares, import and export activities and distribution and marketing consultancy services” decided to apply for loans to set up suddenly a wind mill.

“The outstanding loan as on 30-06-2017 is Rs 8.52 crore and interest and repayment of loan are regular,” said Shah’s lawyer to The Wire. It is not clear what the status of the wind mill is at Ratlam ( Madhya Pradesh). But a search revealed that wind mills are being set up in Ratlam since at least 2004 and a large number of private companies seem to have been given land for the purpose by the Government.

Questions begging for answers:

Piyush Goyal

Indian Renewable Energy Development Agency (IREDA), a PSU under the ministry of power with Goyal as the minister, gave a loan of `10.35 Crore to Kusum Finserve Ltd. for setting up a wind energy unit at Ratlam (Madhya Pradesh).

M/S Kusum Finserve, however, was into stock broking and had no prior experience in the energy sector. What’s more, the IREDA website clarifies that only 1MW units were to be sanctioned while M/S Kusum Finserve was either allowed or offered to set up a 2.1Megawatt unit. Finally, IREDA could fund up to 70% of the project cost or roughly `4.90 crore out of a project cost of `7 crore for a 1Megawatt unit.

How did Kusum Finserve then obtain loan worth `10.35 crore?

Tushar Mehta

The Additional Solicitor General Tushar Mehta unwittingly disclosed that he had obtained the permission of the Government on October 6, two days before the news website carried the report, to represent Jay Amit Shah in court against The Wire. This was possibly because the website had released a teaser that day that it would come out with a ‘ big story’ within 48 hours. It had also sent a questionnaire to Jay Amit Shah, which would also have alerted the Government. But can a law officer to the Government represent a private citizen ? Apparently not. The Law Officers’ Act of 1987 stipulates that law officers would not represent any private body or any litigation that could affect the Government. Moreover, the permission was granted to Mehta the same day he sought it .

KIFS & Parimal Nathwani

Filings of Temple Enterprises Pvt Ltd. shows it obtained an ‘ unsecured loan’ of `15 Crore from KIFS Financial Services, Ahmedabad with Rajesh P Khandwala as the chairman. Khandwala happens to be the ‘ Samdhi’ of Parimal Nathwani , President ( Corporate Affairs) of Reliance Group and an ‘Independent’ member of the Rajya Sabha from Jharkhand since 2008. While Khandwala, a stock broker with a standing of 27 years, is said to be an old family friend of Amit Shah, KIFS Financial Services , a listed company, had a revenue of only `7 Crore the year it claims to have given the `15.78 Crore loan to Temple Enterprises Pvt Ltd. The Wire report also claimed that the Annual report of KFIS made no mention of this ‘ unsecured’ loan. KIFS shares, which hovered around `20 in 2014 was trading at `83 in October, 2017.