Updated: August 5, 2016 7:50:22 am
RAISING questions of a potential conflict of interest, a newly inducted junior minister holding the energy portfolio in the BJP-led Maharashtra government was until recently a director of a company that purchased agricultural land in Vidarbha 15 years ago for a power plant project that, according to a current director, is set to take off.
BJP’s Madan Yerawar, Minister of State for Energy, was a director in Chintamani Agrotech (India) Ltd, a company that had two of the party’s influential state leaders as former directors — Union Minister Nitin Gadkari and Maharashtra Chief Minister Devendra Fadnavis.
Yerawar, who hails from Yavatmal in Vidarbha, was a director in Chintamani Agrotech since August 2001 when the company was incorporated. According to Registrar of Companies (RoC) records, he resigned from the firm on July 5, three days before being inducted into the council of ministers. The company filed his resignation with the RoC only on July 26.
Yerawar, earlier, had a 14.28 per cent stake in Chintamani Agrotech, which he later diluted to 1.9 per cent, according to the company’s latest available annual report of March 2015.
Gadkari was also with the company since its inception and resigned as a director on August 31, 2011, while Fadnavis joined the firm on October 23, 2009, and resigned on May 21, 2012, as per RoC records.
Unlike Yerawar, neither Fadnavis nor Gadkari had any shareholding with the company, an analysis of its financial statements shows.
Chintamani Agrotech — with zero turnover for the first several years, low income from sales, high reserves and substantial landholding without any operations — is a subsidiary of Jinbhuvish Powertech Pvt Ltd.
Gadkari did not respond to text messages and questionnaires emailed to his office.
Fadnavis said: “I was associated very briefly, but I resigned and opted out because I couldn’t contribute any value or time to the project. I don’t know the status of the project.”
He added that the government had recently passed an Act that enables original landowners to secure their land back as per current rates if the property was acquired for a specific project that failed to take off within a stipulated period.
“The retrospective applicability needs to be checked,” he said.
Minister of State Yerawar said the power project could not take off due to a financial crunch and is not likely to start soon. “The situation on the ground is still the same and I plan to resign as director of Chintamani Agrotech now I am a minister of state,” he said when The Indian Express spoke to him on July 16.
“The plan was to have an integrated power plant with sugar and ethanol production. But then, policies changed and the government stopped giving loans for the sugar component. It was difficult to raise finances for the project and ultimately it could not take off. The company only has the land, purchased privately with proper permissions,” he said.
But Uttam Ingale, another director of Chintamani Agrotech and a former BJP legislator from Yavatmal, claimed the project was set to begin. “The background work is going on. It is in the final stages. Some NOCs are awaited and finances need to be put in place,” Ingale said.
The company proposed to set up a sugar plant with a capacity of 3,500 tonnes of cane per day and a 30-mw co-generation power plant along with a 45 kilo litres per day ethanol plant at Mahagaon in Yavatmal.
After its incorporation in 2001, Chintamani Agrotech acquired 127 acres in Bijora village of Mahagaon taluka in Yavatmal to set up the plant in 2002-03, Yerawar said.
Devidas Mohakar, a resident of Mahagaon and a former member of the local zilla parishad, said, “At the time of buying the land, the company members convinced farmers that they would set up a power plant and give jobs to members of their families. But nothing happened. Then the other company, Jinbhuvish, bought another 300-350 acres of adjacent land for the power project. But nothing has moved.”
Jinbhuvish Powertech, Chintamani Agrotech’s holding company, owns 89.37 per cent of the firm. The company was incorporated in September 2006 originally as Aarya Financial Services Pvt Lt to provide consultancy services related to securities and deal in financial instruments, according to RoC documents.
The company was started by a Nagpur-based entrepreneur, Manish Mehta, who was also a founder member of Chintamani Agrotech.
Following the long wait for the plant to take off, a group of original land owners approached the Nagpur bench of the Bombay High Court in 2011, seeking the cancellation of sale deeds. The court disposed of the case, saying that registered documents of sale deeds could not be challenged through a writ petition.
The landowners also wrote letters to the Collector’s office in Yavatmal and to the state revenue department, saying the land in question was tribal land, which the company purchased after promising jobs to the owners. They said that the government should now reverse the sale deeds and restore the land back to its original tribal owners.
Mohakar said, “There has been no action on these letters. Some farmers have also started cultivating on what used to be their land at Bijora.”
As per land records, Chintamani Agrotech currently owns at least 64 acres at Bijora, which the company converted to non-agricultural land in 2009. The land is worth Rs 13.62 crore, according to the company auditor’s report as of March 2015. This newspaper was able to trace the purchase of 37.04 acres of Chintamani Agrotech’s current landholding at Bijora to May 2002, when the company paid a total Rs 9.86 lakh for the land parcels.
Besides, Jinbhuvish Power Generations, another subsidiary of Jinbhuvish Powertech, owns 356.5 acres in Bijora and the neighbouring village of Dhanmukh, according to records. As per the government’s annual statement of rates, the land is worth nearly Rs 52 crore.
Some of these land parcels were acquired from Chintamani Agrotech. For instance, on August 26, 2011, Chintamani Agrotech sold nearly 47.5 acres to Jinbhuvish Power Generations for Rs 9.01 crore in Dhanmukh.
Similarly, there are also records of transactions between August and October 2011 of Chintamani Agrotech selling land to Amarupa Engineering & Mining, in which Manish Mehta’s brother Nilesh is a director, with the land ultimately being in the name of Jinbhuvish Power Generations.
Chintamani Agrotech, which changed its registered address at least four times in 15 years , from Yavatmal to Mumbai to Nagpur and then to Uttar Pradesh, had no revenue to report until 2010 when it for the first time posted a turnover of Rs 4.39 lakh. The company’s annual report of March 2015 says that the firm derives hundred per cent of its turnover from the manufacture of sugar, and puts the revenue from sales and other income at Rs 4.47 crore.
Besides Yerawar and Ingale, the firm’s current crop of directors includes Nagpur-based Ravindra Yerawar and Avinash Agrawal, and Jinbhuvish Powertech directors Nilesh Chanandrikapure and Pankaj Kaushal.
Like Chintamani Agrotech, Jinbhuvish Powertech, the holding company has also reported a zero turnover since inception as against a large amount of loans and investments. According to the company’s latest available profit and lost statement, it had no revenue from operations, but Rs 14,853 from “other income”. At the same time, it had reserves of Rs 237.9 crore and long-term investments of Rs 284.2 crore.
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