Saturday, August 11, 2012

Padma Shri Award to Willful Defaulter?

Should a wilful defaulter be awarded “Padma Shri” by the government?

Can the government give the Padma award to a wilful defaulter, as it came out in the case of Kinetic group chairman Arun Firodia, questions an RTI activist
Should a wilful defaulter be awarded “Padma Shri” by the government? This is a question asked by a Right to Information (RTI) activist about a well-known industrialist from Pune, who despite being declared as “wilful defaulter” by several banks, has been awarded the Padma Shri. According to the RTI activist, who does not want to be named, the industrialist in question is Arun Firodia, founder and chairman of the Kinetic Group of companies. Earlier in January 2012, Mr Firodia was awarded Padma Shri from the trade and industry category.
Padma Shri (also Padmashree) is the fourth highest civilian award in India and is awarded in recognition of their distinguished contribution in various spheres of activity including the arts, education, industry, literature, science, sports, medicine, social service and public affairs. The selection criteria for the Padma awards, however, has been heavily criticised as many highly deserving people have been left out in order to favour certain individuals.
There is a team of nine members for selecting individuals for the Padma awards. The Padma Awards Committee 2012, had cabinet secretary, home secretary, secretary to the president, Pulok Chatterjee, principal secretary to the prime minister, Amal Allana, Dr R Chidambaram, Jamshyd N Godrej, Girish Karnad and Leela Samson as members.
According to an RTI reply, the activist received from the ministry of home affairs, before announcing the awards, character and antecedents of all short-listed persons are verified by several intelligence and investigating agencies. It includes, Intelligence Bureau (IB), Central Bureau of Investigation (CBI), Central Board of Direct Taxes (CBDT), Directorate of Revenue Intelligence (DRI), Central Excise Intelligence (CEI), Research and Analysis Wing (RAW) and Securities and Exchange Board of India (SEBI).
However, despite all these checks and balances, neither the committee nor the agencies could report Mr Firodia’s bank defaults, the activist alleged. He said, “Despite the fact that several banks have declared Mr Firodia a “wilful defaulter” continuously between 31 March 2005 and 31 March 2012, how his name was  short-listed and forwarded to the PM and the president?"
In a report available on the website of Credit Information Bureau (India) or CIBIL, as of 31 March 2012, Mr Firodia's name has been shown associated with Kinetic Finance,Athena Financial Services, along with his daughter Sulajja Firodia Motwani. According to CIBIL data, as of 31st Match, Athena Financial Services has an outstanding of Rs54.60 crore, while Kinetic Finance owes Rs2.76 crore to debtors, mostly banks.

Several lenders like Bank of India (Rs8.98 crore), Tamilnad Mercantile Bank (Rs4.15 crore), Bank of Rajasthan (now ICICI Bank- Rs4 crore), Catholic Syrian Bank (Rs2.76 crore), United Western Bank (Rs4.81 crore), Union Bank of India (Rs10.34 crore), State Bank of Hyderabad (Rs4.82 crore), Development Credit Bank (Rs12.55 crore), IDBI Bank (Rs4.81 crore), UTI Mutual Fund (Rs21.67 crore) and Bank of Maharashtra (Rs14.98 crore) have reported Athena Financial Services and Kinetic Finance as wilful defaulters to CIBIL.
In 1999, 20th Century Kinetic Finance was set up as a joint venture between 20th Century Finance Corp and Kinetic Engineering. Kinetic, headed by Mr Firodia, bought majority stake in the company and changed its name to Kinetic Fincap. As per a Bombay High Court order dated 18 October 1999, Kinetic Lease & Finance and Kinetic Capital Finance, the two other group companies were merged with Kinetic Fincap and all the merged companies started as Kinetic Finance from 14 Match 2001. Mr Firodia was the chairman while Ms Firodia Motwani was the managing director of the company.
Then on 15 April 2004, the company changed its name to Athena Financial Services. Both Mr Firodia and Ms Firodia Motwani also resigned from the board of directors.
There are about 23 banks who have given loans to various companies of Mr Firodia, however only five banks, DCB Bank, Lord Krishna Bank (now HDFC Bank), Bank of Rajasthan (ICICI Bank), Jammu & Kashmir Bank and ING Vyasa Bank, have filed a criminal case against the company directors.
Moneylife sent a mail to Abhay Nevagi & Associates; counsel for J&K Bank, Bank of Rajasthan, ING Vyasa Bank and DC Bank and also to Adv Nandu Phadke who represented Lord Krishna Bank (now merged with HDFC Bank) in cases against Mr Firodia and his companies. We asked for the current status of court cases, however, till writing the story there was no reply from the lawyers. Similarly, our mails to Mr Firodia and Ms Firodia Motwani remained unanswered till date.

Above mentioned information received to me by email through one of  readers of my blogs. I thank him for sending such eye opening startling information which indicates how government of India acts .

Dear Sir, 

I was searching the web on NPAs and came across your website and read a lot of articles with interest. Your blunt and brutal style of exposing the truth in Indian banking is really laudable. In the time of rising NPAs , should the Government reward a declared willful defaulter with a Padma Shri award ? On 25th January 2012, Mr Arun Firodia, promoter of Kinetic group of companies has been rewarded with a Padma Shri. I sent an RTI application to the Ministry of Home Affairs asking them the selection process. Their reply is enclosed, so is a list of willful defaults by Mr Firodia and screen-shots of CIBIL site . I was in touch with Ms. Sucheta Dalal of Moneylife foundation and she has come out with a daring baring article on the same. Link here .Now my question to you is - since now the truth is out in open, should the Govt not withdraw the Padma Award ? 

1 comment:

Trusha Mehta said...

I had no idea my credit was bad. The guys at Credit Sudhaar analysed my report. The process took some time but my credit was restored, enhanced and protected. I have no reason for complaints.