Mother of All Scams – ESSAR OIL – Rs.6300 cr to Rs.66,300 cr Plus Scam

February19, 2013

Honorable Chief Justice of India,

Supreme Court of India,

New Delhi -110001

Executive Summary:- ESSAR OIL founded by Promoters Ruia Brothers 87.96% Controlled from Mauritius with Rs. Few Crores Investment Was Soon Registered as a Company – Allotted Land Cheaply, and Sales Tax Deferment of 125% for 10-12 years or Rs.6300 crores in 1995-98 – After Raising Capital and Bank Loans ESSAR OIL diverted Money to a Telecom Joint Venture ESSAR HUTCH in 2000 in India that was Scaled Up soon to be worth $20b by 2007. HUTCH the Singapore partner exited and Transferred its equity to VODAFONE for $12b in Offshore Deal. This is Mother of All Scams – Rs.6300 crores + Rs.60,000 crores Plus Many Other Concession over 15 years. State of Gujarat and NDA let a Foreign Company say Rs.70,000 crores Enrichment that has no equal in the world that neither created many Jobs nor benefit Indian Shareholders who own 4.5% Only Are Yet to Get Dividend. State of Gujarat, Shri Yashwant Sinha then Finance Minister and current Chairman Finance Commission along with Arun Jaitley then Law Minister and current Leader of Opposition in Rajya Sabha be tried for Corruption and Facilitating MOTHER OF ALL SCAMS while Neglecting BASIC DEVELOPMENT OF GUJARAT – 90% of GUJARAT COTTON IS EXPORTED WITHOUT ANY VALUE ADDITION THAT COULD HAVE DOUBLED GUJARAT GDP and CREATED 2.5 MILLION JOBS.

$Trillions Had Been Siphoned Out of India Through Such Scams – Hence CBI Investigation or JUDICIAL PROBE is Prayed to Unearth Scam, Recover Loot & Plug Loopholes.

Respected Sir,

Justice M. Katju is fighting Corporate Control and Manipulation of news. His charges are valid but modest – above headlines underlines the real magnitude. Biggest treacheries of Mr. Arun Jaitley, Mr. Narendra Modi and Mr. Yashwant Sinha were First Repeal of FERA, Two opening wide of Mauritius Route, Three Ejection of Retail Investors in companies and Four no control over Transfer of funds to other companies than desired application or declared purpose. 87.96% of ESSAR OIL is held by Essar Energy Holdings Limited based in Mauritius.

ESSAR OIL SCAM alone is 1000 times larger than Bofors – This has ‘Made Our Companies Systematically Most Corrupt’ – Controlled and Operated from Foreign Countries. This is worse than British Raj – they control our media as well through it Dictate Government Policies in to Wrong Doing and Preventing Lawful Functioning.

Gujarat allowed Rs.6300 crores sales tax deferment on Rs.5544 crores Capital Investment to ESSAR OIL. It may not have directly made much impact but ESSAR with this Corrupt Policy managed to procure Huge Amounts of Funds from Banks and Markets and diverted money to Fast Emerging Telecom Sector and promoted ESSAR-HUTCH under Gujarat-NDA rule.

Hutch with cumulative investment of under $1b managed to profit $12b plus in offshore deal with VODAFONE.

It was not just Rs.60,000 crores LOSS in telecom but helped ESSAR expand Refining Capacity 3-4 fold at no real investment.

http://www.essar.com/upload/pdf/EOL_AR_2010-11.pdf

Arun Jaitley as Law Minister and Key advisor – One Removed FERA that led Flood Gates of SCAMS and Flight of Capital and Black Money Returning as White Money Fraud, Two Let Companies Throw Out Retail investors and take over their Equity Themselves Is Biggest CORPORATE SCAM in world history. Indian public share holding in ESSAR Oil is just 4.5%.

On turnover of Rs.53,119 crores, Salary to employees was just Rs.119 crores just 0.2% and there was no dividend for 17 years company. ESSAR sold half of its products in India. In fixed assets of Essar Oil – Cost of Land was just Rs.140 crores in Total Assets of Rs.13,668 crores – not even 1% for farmers.

Though the Tax Deferment scheme expired in 2000 as could be made out in Supreme Court judgment, ESSAR would actually refund the money fully by 2014, Chief Minister Mr. Narendra Modi continued to shower even bigger packages to Corporate like Mr. Ratan Tata for NANO project in 2008.

ESSAR took advantage of Gujarat and then RELOCATED CORPORATE HEAD QUARTER in London around 2008 with its Majority Holding. 

Just this Rs.6300 crores Tax Deferment could have ‘Promoted Cotton-Garments Clusters’ creating 2.5 million jobs and made Gujarat twice more Wealthy than today. Gujarat exports raw cotton – there is no increase in Cotton Textile Production since 2000 – actually some shut down factories were sold out for Real Estate projects.

ESSAR and RIL refineries are mainly Export Oriented Draining Indian Resources – are viable due to tax concessions, India get only all the pollution.

Worst – 75% of Gujarat cultivable area is dedicated to Non Food Crops, people are so poor that they rear on average 2-3 animals but don’t drink milk. Punjab produce more milk from 6 million farm animals than Gujarat from 27m – Modi has added 7m animals for its people to rear.

Prayer

Please order CBI Investigation or JUDICIAL PROBE to Unearth Scam, to Recover Loot & to Plug Loopholes in System and Governance.

Thank you,

Ravinder Singh*,

Inventor & Consultant

INNOVATIVE TECHNONLOGIES AND PROJECTS

Y-77, Hauz Khas, NewDelhi-110016, India.

e.mail; progressindia008@yahoo.com,

Ravinder Singh* is a WIPO awarded inventor specializing in Power, Transportation,

Water, Energy Saving, Agriculture, Manufacturing, Technologies and Projects.

[Brothers Shashi and Ravi Ruia's Essar Group is a $27 billion (revenues) conglomerate with operations in 25 countries. It has spent $18 billion since 2008 in expanding capacities, notably in steel and oil refining. Shares of its London-listed Essar Energy more than halved in past year, hit by delays in getting approvals for mining coal and by a Supreme Court ruling that it was liable to prepay more than $1 billion in state taxes. In May, Antwerp Port Authority bought minority stake in their Essar Ports. Brothers delisted India Securities. They are looking to sell their stakes in outsourcing firm Aegis, US steel operations and their telecom interests in Kenya, to bring down the group's $12 billion in debt. In August, the group moved into new corporate headquarters in the Bandra-Kurla Complex, an upcoming financial district in suburban Mumbai; the brothers continue to operate from old downtown offices.]

[Essar Oil Limited (EOL) is an India-based company. The company is engaged in exploration and production of oil and gas, refining of crude oil and marketing of petroleum products. The Refinery of the Company is located at Khambhalia Post, Gujarat. The Company’s oil fields are located at Mehsana, Gujarat and the Coal Bed Methane (CBM) fields are located in Durgapur, West Bengal. The Company has complex refinery of 20 MMTPA (million metric tons per annum) at Vadinar, Gujarat, which has a crude refining capacity of 405,000 barrels per stream-day (bpsd). The Company also has a portfolio of eight oil and gas blocks in India with about 1.7 billion barrels of oil equivalent in reserves and resources. During the fiscal year ended March 31, 2012 (fiscal 2012), the Vadinar refinery processed 25 varieties of crude, including ultra-heavy and tough crudes. The crude slate consists of Mangala crude from Rajasthan. During fiscal 2012, its refinery processed 13.5 million tons (98.41 mmbbl) of crude.]

SC orders Essar Oil to pay Rs 6.3K cr sales tax to Gujarat

Express news service

Dismissing an argument by Essar Oil that it had failed to start production from its refinery in Gujarat due to an “Act of God”, the Supreme Court (SC) on Tuesday directed the Ruia-owned company to pay about Rs 6,300 crore in sales tax to the government. A bench led by Justice Asok Kumar Ganguly observed that the company cannot benefit from a government exemption scheme despite not launching production during the scheduled qualifying period from the refinery at Vadinar.

Companies are eligible for a tax benefit up to 125 per cent of investment in a project as per the 1995-2000 New Capital Incentive Policy scheme of the state. The state’s Industries Department had moved the SC after Essar Oil won the case in the Gujarat High Court in April 2008.

Essar Oil shares plunged by 7.85 per cent to Rs 58.10 on the BSE on Tuesday following the SC verdict. The payout to the state is almost 80 per cent of Essar Oil’s current market capitalisation of Rs 7,934 crore. It had posted a net profit of Rs 654 crore in fiscal 2010-11 and a loss of Rs 166 crore in the quarter ended September 2011.

In the Supreme Court, Essar had contended that its project had failed to take off start during the required period because of an ‘Act of God’ — a cyclone that hit the Gujarat coast in 1998. The refinery had started operating only in 2006. The Vadinar refinery is also the subject of an arbitration process in which the company is claiming about Rs 3,020 crore from United India Insurance. The company argued that it had provided for the tax payment in case it lost the case.

According to the company, investment in the plant was about $5 billion and its 2010-11 turnover was $10 billion. “The company has availed of approximately Rs 6,300 crore of sales tax benefit as of December 2011 which was to be paid in deferred installments. The company will provide further information in the matter after studying the judgment passed by the Hon’ble Supreme Court,” the company said in a statement to the stock exchanges.

While setting aside the Gujarat High Court order of granting concession to the company, the SC observed in the order that “ the principle that in case of ambiguity, a taxing statute should be construed in favour of the assessee, does not apply to the construction of an exception or an exempting provision, as the same has to be construed strictly.”

Essar had initially applied under the new investment policy in August 1995 for its refinery project with a projected investment of Rs 5,544 crore. The company initially claimed of starting from the first quarter of 1998 but could not launch till four years later. In April 2002, it told the government that considerable time was lost in reassessment and construction could begin in June 2002, and production by November 2004 and asked for an extension. Environmental clearances held up the project and the company could not start the plant until 2006.

No ‘act of God’

* The Supreme Court observed that a company cannot benefit from exemption despite not launching production during the qualifying period

* Essar had contended that it had failed to start its oil production project on account of a cyclone in 1998, which it said was an ‘act of God’

Govt on ‘high ground’ stumbles in court

State Has Been Getting Shockers From HC For Its Stand On Sensitive Issues

TIMES NEWS NETWORK

Ahmedabad: While holding that the state government was bound to give scholarship benefits to students belonging to minorities, the Gujarat high court observed that it was not inclined to spend money for the benefits of the poor.

    This was, however, not for the first time that the Narendra Modi government got a jolt from the judiciary for its stand over some sensitive issue. The state government’s stand on various important issues has not withstood the judicial scrutiny. It took the Supreme Court to direct the reluctance Gujarat government to introduce mid-day meal scheme for students as incentives to attract students to schools.

    As it was adamant on denying scholarships to students of minorities, the government tried to assert that its secular commitments did not permit it to pay compensation for the shrines that were damaged during the 2002 riots. The Gujarat high court ordered it to pay damages for the targeted religious structures and criticized it for its inaction during the communal strife.

    Similarly, for the last two years, the state government has been unsuccessfully trying to trounce the governor’s decision to appoint retired HC judge R A Mehta as Lokayukta. In its pursuit to convince that the governor could not have ignored the elected government, it invites criticism from courts for keeping the crucial position vacant for a decade.

    In another important case, the state government unsuccessfully defended its minister Purushottam Solanki who was allegedly involved in Rs 400 crore fisheries scam. The high court, however, upheld the governor’s sanction to prosecute the minister.

    Last year, the high court dubbed the government’s scheme of fixed wages for new recruits in various departments as an inhuman approach and exploitation and rapped the administration for giving unequal treatment to its employees. The government does not want to spend more after employees, and has moved the Supreme Court.

    The state government did not remove Pota in the Godhra train burning incident despite Pota Review Committee’s recommendations. Finally the state government’s stand was negated by the high court, and the accused were tried and punished under the IPC by special SIT court. The government moved the SC on this issue also.

    The government’s insistence that the state police should probe alleged fake encounters has not been accepted by the high court, as well as, the apex court.

Essar Oil delisting proposal gets shareholders’ nod

PTI

Mumbai: Essar Oil Ltd said on 15 March it has received its shareholders’ approval for delisting the equity shares of the company from Bombay Stock Exchange and National Stock Exchange as per Sebi guidelines.

Essar Oil informed the BSE that the shareholders have passed a special resolution by way of postal ballot to delist the shares.

At present, Essar Energy Holdings Ltd (EEHL) together with persons acting in concert (PAC) hold around 217.2 million equity shares and over 5.12 million global depository shares, representing approximately 784.3 million shares aggregating to 87.96% of Essar Oil’s total equity share capital.

Essar Energy Holdings is a Mauritius-based subsidiary of Essar Global Ltd.