Amit Shah and son Jay Shah. Credit: PTI
6th October 2017
Dear Ms. Rohini Singh,
My client, Mr. Jay Shah, having received a questionnaire from you, has instructed me to answer the questions posed by you as under:
Temple Enterprise . Ltd.
This company is engaged in the business of import and export of Agri commodities like Rapseed DOC, Castor DOC meal, Desi Chana, Soyabean, Corainder seeds, Rice, Wheat, Maize etc. The business ownership and management was principally held by Mr. Jay Shah and Mr. Jitendra Shah (an old family friend) and their associates. Mr. Jay Shah is a qualified Engineer having done his B.Tech from the renowned Nirma University and Mr. Jitendra Shah was already engaged in the business of commodities for the last several years and his companies had been recording an annual turnover of over Rs.100 Crores.
Mr. Jay Shah, Mr. Jitendra Shah and their associates invested share capital and unsecured loans in this company. Since working capital facilities were not available to a new business/ company, interest bearing Inter Corporate Deposits (ICD) were taken from time to time from KIFS Financial Services Ltd., a registered NBFC, to run this business. Tax has been deducted on the interest paid (TDS) regularly and the principal and interest amount has been repaid in full.
Mr. Rajesh Khandwala, the promoter of KIFS is the sharebroker for the family of Mr. Jay Shah for the last several years. This NBFC has been providing loans to Mr. Jay Shah’s and Mr. Jitendra Shah’s other businesses regularly for the last several years. Mr. Jay Shah has had family relations with Mr. Rajesh Khandwala much prior to the marriage of Mr. Nathwani’s son to Mr. Khandwala’s daughter, about 4 years ago.
It may be noted that in the commodity business, a turnover of about Rs.80 crores is not an abnormally high turnover, since this is a high risk, high volume and low margin business, more particularly, in view of the fact that Mr. Jitendra Shah’s companies were already having annual turnover of over Rs. 100 Crores. Unfortunately, the business activities of the Temple Enterprise Pvt. Ltd. resulted in losses due to which the business activities were stopped sometime in October, 2016.
All the above transactions are through banking channels and duly reflected in the account books and the tax records of the company.
Sattva Tradelink
Though this LLP was formed by Mr. Jay Shah with Mr. Khandwala, in view of adverse market conditions no business was carried out and the LLP was wound up and has already been struck off from the Registrar records.
KusumFinserve
This entity is engaged in the business of trading in stocks and shares, import and export activities and distribution and marketing consultancy services. This entity has also been regularly raising ICDs / loans from KIFS Financial Services for the last several years and the amount of Rs.4.9 crores was the outstanding closing balance from them. These amounts were used for regular working capital. Tax has been deducted on the interest paid (TDS) and principal and interest amount has been repaid in full.
The LLP has not taken any funding /loan from Kalupur Commercial Co-op. Bank Ltd. Only a Non Fund based Working Capital facility in the form of Letter of Credit (LC) upto Rs.25 crores has been sanctioned and is availed from time to time. This facility has been secured on usual banking terms which include hypothecation of the goods purchased under the LC, cash margin of 10% and collateral security of a property belonging to Mr. Jay Shah’s father and another property of Kusum Finserve (Purchased on 5th April, 2014 through a duly executed purchase deed) which is duly reflected in the financial statement of April, 2014 to March, 2015.
In fact, the goods purchased under LC are stored at the Warehouse/port under CM (Collateral Manager) arrangement and goods are allowed to be lifted from the warehouse only on the basis of PAY & PICK, meaning thereby, upon deposit of the full amount of the goods sought to be lifted, in a Fixed Deposit. The bank issues Delivery Order after receiving full payment and then goods are released from the custody of the CM. The bank receives payments before the retirement of LC on its due date resulting in this being a non-funded and no-risk facility for the bank.
The loan taken from IREDA for setting up a 2.1 MW wind energy plant is based on the equipment prices prevailing at that point of time as per industry standards (approx Rs.14.3 crores) and duly appraised and sanctioned in the normal course of business. The outstanding loan as on 30-06-2017 is Rs.8.52 crore and interest and repayment of loan are regular.
It may be noted that the sum of Rs.21.2 crores is the total revenue of the company and not the profit. This includes Rs.16.2 crores which is the trading turnover from the sale of shares and not the profit. The profit earned by this company was only approximately Rs. 15,000/-. All the above transactions are through banking channels and duly reflected in the account books and the tax records of the company.
It may be noted that LLP has no dealing with JSW or any company controlled by Mr. Sajjan Jindal.
Finally, there is no overdue of principal or interest on any loan.
In view of the answers and explanations detailed above, the facts are absolutely clear and you are requested not to publish anything in this behalf, which would not only infringe my clients’ privacy rights but would also be libelous and/or defamatory.
Mr Jay Shah is a private citizen doing his legitimate business. His business transactions are honest, legal and bonafide. Your questionairre indicates that your intention is to drag him into a false and a manufactured controversy. Any slant or imputation which alleges or suggests any impropriety on his part will not only be false but also malicious and defamatory. It will also be a breach of his fundamental right to privacy. He shall, in that event reserve the right to prosecute you for defamation and also sue you for the civil wrongs.
Notwithstanding the above, if you or anyone in the print, electronic or digital media carries and/or broadcasts any defamatory and/or false imputations including those which breach his fundamental right of privacy and/or defame him, Mr. Jay Shah reserves the right to prosecute and sue such person/entity including anyone who carries or broadcasts a repetition of such libelous / defamatory statement.
Yours truly,
Manik Dogra
Advocate
A-27, Defence Colony
New Delhi – 110024
Read Rohini Singh’s report: The Golden Touch of Jay Amit Shah
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