New Delhi (Rohini Singh of The Wire): In a hitherto undisclosed business deal that took place after he joined the Narendra Modi government as minister, senior BJP leader Piyush Goyal sold the entire stock of a privately held company he and his wife owned, at nearly 1000 times the face value, to a group firm owned by Ajay Piramal – a billionaire with substantial interests in the infrastructure sector including power.
The sale took place in September 2014, after Goyal had been a minister for four months.
The transaction is of questionable propriety because neither Goyal’s ownership of the company – Flashnet Info Solutions (India) Private Limited – nor its subsequent sale appears to find reflection in the mandatory statement of assets and liabilities he made with the Prime Minister’s Office in 2014 and 2015 as a minister in the government.
The sale also invites allegations of conflict of interest and crony capitalism as the Piramal group not only had business interests in power and new and renewable energy but went on to extend its investments in the sectors. At the time of the sale, Goyal was minister of state with independent charge of power, coal and new and renewable energy.
His dealings with the Piramal group is the second instance of Goyal’s proximity to corporate India to come to light in recent weeks. In both cases, the minister has been less than transparent about his business relationships.
Questioned earlier this month about his links to Shirdi Industries – a company he had been a director of till 2010 and that ended up defaulting on loans worth hundreds of crores of rupees in 2014 – Goyal, who is now minister for railways and coal, issued a statement saying that he has had “no relationship with [the company] since the last eight years and is not responsible for their issues.”
What he did not disclose, however, is that he and his wife remained major shareholders of the company even after he resigned as director – and only divested the approximately 4.2% stake they owned via a holding company in 2013, five years after he said he had ended his relationship with Shirdi.
Sold in a flash but PMO in the dark
Goyal and his wife set up Flashnet in 2000 and together they owned 99.9% of the stock in this unlisted company. The BJP leader acknowledged his “shareholding of a controlling nature” in Flashnet in his statutory listing of pecuniary interests filed with the Rajya Sabha secretariat shortly after becoming a member of the upper house in 2010, according to the Association for Democratic Reforms (ADR).
See details in https://thewire.in/political-economy/in-selling-firm-to-piramal-group-as-minister-piyush-goyal-pushes-ethical-boundaries