Goa SEZ papers indicate rule violations
Ketki Angre
Sunday, July 13, 2008 (Goa)
The Goa government recently scrapped seven SEZs that were coming up in the state, reportedly because of violations in the way they were allotted in the first place.
The government says that this was in response to large scale public protests, fearing the SEZ's would burden the infrastructure without generating jobs for locals.
But Documents obtained by activists using the Right to Information found that there were violations in how these SEZ's were allotted.
The SEZs were cleared by the previous Goa Government under CM Pratapsinh Rane, which sanctioned the SEZs in two separate meetings.In one batch , nearly 400 acres of land were given to 4 SEZs in Verna in South Goa. The Ashok Piramal Group's Planetview Mercantile Private Ltd, Piramal's Inox Mercantile Private Ltd, K Raheja Corporation Limited, one of Mumbai's biggest construction firms and K Raheja's Paradigm Logistics And Solutions Private Ltd.
But documents obtained under RTI from the Goa Industrial Development Corporation and the directorate of industries find that all four SEZ applications were technically incomplete.
The company seal on documents were missing and the crucial bank finance guarantee was missing. The Goa government meeting in which the four SEZs were sanctioned didn't even have the mandatory quorum, which makes all its decisions null and void.
A glaring flaw in the document was that Planetview Mercantile Private Limited, a subsidiary of the Ashok Piramal Group, did not even exist when it was sanctioned nearly 25 acres of land. The company was formed a week after its request for land was cleared.Clearances which experts agree are suspect. Suhail Nathani, partner, Economic Laws Practice said, ''A meeting held without quorum is not valid. And an application made by a non existant company/ entity is just what it suggests .. That it is not a valid application because the body corporate, which is the applicant did not exist on that particular day.''
But the Goa Industrial Development Corporation insists the clearances were in order. Nitin Kunkolienkar, director, Goa Industrial Development Corporation said, ''There's absolute quorum, it was perfectly right, no one has understood the provision of the Act. The quorum requirement is four people, so the entire quorum was present at the meeting and the meeting was totally legal. It is beyond doubt. Whether the company existed or not is not our lookout. We follow the meeting agenda.''
This in spite of the Act stating that the Director of Industries is needed to reach quorum when only four members are present.
When contacted, the Piramal group in an emailed statement said: ''When the application was made, the company was under formation. It is clearly mentioned accordingly in the application form. As a result, the application form did not have its company seal. As regards the bank finance guarantee, there was no requirement in the application form. Moreover, the land allotment was done based on the skills and credentials of Peninsula and not depending upon the SPV in isolation.''
Interestingly, nowhere in the application form is it mentioned that Planetview Mercantile is a Piramal subsidiary or was under formation and the GIDC website clearly says that a letter from the bank/financial institution agreeing to finance the project is needed to be eligible.
In spite of repeated attempts the K Raheja Corporation did not respond to these allegations.
Family connections
In allocation of another 300 acres of land in Ponda in central Goa, there is evidence of further violations. Cipla's subsidiary, Meditab Specialities Private Limited, which was given an SEZ here didn't even make a formal application for an SEZ.
Only on the basis of a request letter it was sanctioned nearly 300 acres for a pharmaceutical SEZ on the direction of the then Industries Minister. The law does say that the corporation is bound to follow directives from the government but this is only in the area of policy directives.
The corporation claims this means all government directives need to be followed. Nitin Kunkolienkar, director, Goa Industrial Development Corporation said, ''You see particular Cipla case, it was referred by the govt. and including the CM's office, industries' minister's office and then the CS has referred it. The Goa-IDC was asked to process that.''
Experts says whatever the directives from the state, the corporation should also have followed the official procedures. This includes insisting on a formal application. ''There is a procedure that needs to be followed and there is no provision in the law to compromise the process. While the decision maybe dictated, that's something the act does provide, but certainly there is no provision for doing away with the process, so to my mind they would have to follow process,'' Nathani said.
But when contacted, Pharma giant CIPLA has said procedures were followed and the allegations are baseless.
Of the seven SEZs that the Goa government subsequently scrapped, three were promoted by the Piramal Group the signatory on its documents is Amish Yoddha.
But interestingly Yoddha is the son-in-law of AV Palekar the Managing Director of the Goa Industrial Development Corporation. The Goa government body that allocated the lands, a deal which some say raises serious questions of conflict of interest.
But the Piramal Group in its statement says: ''There is no conflict of interest. Amish Yoddha was authorised to represent the company vide a valid Board Resolution. The land allotment took place much before his wedding with daughter of Mr A V Palekar and there is no connection between the two events. The Deed of lease was executed on August 2, 2006 whereas the wedding took place on January 29, 2008.''
Former chief minister Pratapsinh Rane in whose tenure the SEZs were santioned refused to comment, saying the matter of SEZ clearances was now in court
Goa's chief minister Digambar Kamat who subsequently scrapped the SEZs said his government stand was clear - it did not want SEZs anymore.
But the question on how they were allotted will still stand.
http://www.ndtv.com/convergence/ndtv/story.aspx?id=NEWEN20080056846&ch=7
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