'DNA' investigations: For ex-UPA minister, one block was a family affair

Former corporate affairs minister PC Gupta claimed that he had nothing to do with the allocation of a coal block to a company run by his sons.

However, his wife’s position as director/owner in a matrix of shareholding firms in IST Steel & Power Ltd will be a likely embarrassment for the Rashtriya Janata Dal leader.

While Gupta floated one Hong Kong-based investor company 38 years ago, the rest are all family-owned companies whose shares Gupta transferred to his wife Sarla after he was elected to Parliament  in 1996.

The Rashtriya Janata Dal leader was minister of state and then cabinet minister for corporate affairs in UPA-I.

The Dahegaon Makardhokra coal block in Maharashtra’s Nagpur district was allocated to IST Steel & Power Ltd mid-2009, not long after the end of term of UPA-I. On Thursday, the Inter-Ministerial Group recommended de-allocation of that block.

The former minister’s wife and two sons, Mayur and Gaurav, are listed among the 12 shareholders in IST Steel and Power Ltd.

The other shareholders include IST Technology Infrastructure Pvt Ltd, IST Ltd, Eastern India Power & Mining Co Pvt Ltd, Lubetec India Pvt Ltd and Neil Builders Pvt Ltd, all of which share a single address in Defence Colony, New Delhi. Three other shareholders are individuals listed as acting “on behalf of IST Ltd”.

The last of the 12 shareholders is Gupta International Investment Co Ltd, with a Hong Kong address.

The ownership of these investor firms involves multiple layers of companies in which Sarla, Gaurav and Mayur are directors and/or equity shareholders. So, Sarla and Eastern India Power & Mining Co Pvt Ltd are shareholders in IST Technology Infrastructure while Sarla, Mayur, Eastern India Power & Mining and IST Technology Infrastructure are shareholders in Neil Builders. Sarla and Mayur are directors on the board of Eastern India Power & Mining while Sarla and IST Technology Infrastructure are shareholders.

Lubetec India Pvt Ltd is owned by Sarla and two other firms named Antique Investment Co Ltd and Delux Investments Pvt Ltd. Both the latter firms share the same Defence Colony address as Lubetec. Sarla is also director at Antique Investment, among whose shareholders are Sarla, Eastern India Power & Mining Co Pvt Ltd and IST Technology Infrastructure Pvt Ltd.

Expectedly, Sarla is also director at Delux Investments, among whose shareholders are Sarla, Mayur, Gaurav, Antique Investment and Eastern India Power & Mining Co.

BJP national general secretary Kirit Somaiya, who is writing to the prime minister and the Central Bureau of Investigations seeking a probe into Gupta’s role, said the former minister’s stake must be investigated as there is clear conflict of interest. “Husband and wife are considered a single entity. Gupta has violated all guidelines,” Somaiya said.

Gupta, now a Rajya Sabha member, called the allegations unfair and the CAG report itself erroneous. “Is it a crime if your father is a politician? If I had used my influence, I would have got my sons an open cast mine, not an underground one where the first hit of coal is 172 metres underground,” Gupta said. The CAG report has incorrectly stated IST’s block as being in Chhattisgarh, he added, and said the report itself admits that underground mines are loss-making and would not be included in computing the financial implications of coal block allocations.

Mayur, his younger son, had floated a company for sponge iron and power in Karnataka in 2006, when the government was making the allocations. “He got it on merit,” Gupta said. Asked if there was conflict of interest in a company owned by his wife and sons getting a block, Gupta said, “What is the problem if my wife is owner?... My family has been in business for generations.”