Did Jay Shah deserved loans of 4,000% or was he benefited from his surname?
New Delhi, October 10: The fortunes of Jay Shah rose around 16,000 times after the Bharatiya Janta Party came in power from Rs 50,000 crores to Rs 80 crores. The Bharatiya Janta Party said that the Jay shah Company, which dealt in commodities have made revenue of Rs 80 crores but the expenses were over Rs 80 crores. So, as a result the company is in a loss leading to a decision to close it down.
So, The Bhartiya Janata Party disapproved the Congress charge of cronyism benefiting Amit Shah. According to sources, the records suggests that the expense of Jay Shah’s commodity trading company overshot his revenues. An important part of those expenses were close to Rs 10 crore pertaining to the logistics and regulatory costs of exporting commodities.
But the part that is not answered by the Bhartiya Janata Party’s defence that centres around the dramatic spike in loans received by Jay Shah’s companies after the Bhartiya Janata Party came in power. According to reports, In 2013-14 two of Jay Shah’s companies showed loans of Rs 1.3 crore. In 2015, figure was around Rs 53.4 crore which means an increase of 4,000%.
One of the companies named Temple Enterprises that was incorporated in 2004, showed a surplus of Rs.18.8 lakh in 2014 after 10 years of operation. However in 2015, around rs 15.76 crore was received as an unsecured loan from KIFS Financial Services, a non-banking finance company (NBFC). According to official sources, the KIFS Financial Services papers show only Rs 1.16 lakh as unsecured loans advanced in that year, as rent deposit.
KIFS said that the loan to Jay Shah was a secured loan, part of the Rs 88 crore of secured lending by KIFS in the year (2015-16). But if that is the case, KIFS must have lent a significant amount 17 % of their order book to a single company, not one with the soundest financial record.
But, there is discrepancy regarding the loan, as the Temple Enterprises describing it as unsecured loan but KIFS as secured. in its first year, it had a loss of Rs 36,500, showing a profit of Rs 1.73 crore in the year 2014. In 2015, it credit of Rs 25 crore from Kalupur Commercial Cooperative Bank, headquartered in Ahmedabad. Lending from KIFS Financials also increased that year, coming to a total of Rs 2.68 crore.
The officials at Kaupur Bank said that the credit was safe against the commodities that the company traded in, and Rs 25 crore amount was justified. Kaupur bank further mentioned that Kusum Finserve is a firm trading in commodities, not brokering in them, and hence is exempt from those restrictions. But Kusum Finserve shows a bulk of its profits around 60% that has come from consultancy and the balance from commodity trading.
Kusum Finserve received additional Rs 10 crore loan by expanding into the renewable energy business. But this time, the lender was Indian Renewable Energy Development Agency Limited. The Indian Renewable Energy Development Agency Limited is the power ministry’s lending agency for renewable energy projects.
Piyush Goyal, Union Railways Minister said that “I believe Indian Renewable Energy Development Agency Limited have already given more than 2,000 sanctions on loans so far. And has sanctioned over Rs 50,000 crores to different customers all over the country to promote renewable energy.”
Whether Jay Shah was he was deserving or was he benefited from a famous surname can only be established after an inquiry in the case.