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Wood
Plantations Scheme
CHANDIGARH: In
the land of farmers, R K Syal presented a calculus of tree plantations
and cash crop harvests.
The brochure said the
company would develop the land for agro-forestry farms and after
expiry of the plan period, trees and cash crops would be cut and money
from the sale would be guaranteed by post-dated cheques.
Invest Rs 1 lakh and
you would get Rs 2.22 crore in 25 years, promised Syal. To get to the
investors, he hired 20 lakh agents of which six lakh were operative.
These agents reeled in around 24 lakh investors. Taking into account
collections from all the schemes as of December 31, 1997, the total
amounted to Rs 22,900 crore.
GFIL floated nine
lumpsum and recurring investment schemes, issued post-dated maturity
cheques after accepting investment for 1 to 25 years. Forty per cent
of the investors money was earmarked for ‘‘developing’’ the
land and the rest was treated as security deposit.
In 1987, the company
mobilised only Rs 16 lakh. By 1990, it touched Rs 3 crore. Between
1993 and 1997, the company took a quantum jump in investment — Rs
200 crore per year. By December 31, 1997, the company had mobilised
phenomenon Rs 1,037 crore. According to the Punjab Vigilance
Department, the total collections from investors touched Rs 3,000
crore.
They paid Rs 450 crore
to their investors.
In a report prepared by
Sebi’s executive director Vijay Ranjan and his RBI counterpart S
Gurumurthy in 1998, the two officers highlighted that the company had
paid nothing to investors out of its own income but out of the
investment made by new ones.
In an investigation
carried out by court officers appointed by the Mumbai High Court, the
total amount of the farm income was Rs 58 lakh which works out to less
that 0.2 per cent of the total amount (Rs 450 crore) paid to the
investors.
A committee appointed
by Mumbai High Court recommended in 1998 that GFIL and its
subsidiaries stop collecting money and undergo an audit of its
accounts and land holdings.
Sebi, RBI, IT dept,
everybody has a complaint
This is what Sebi and
RBI found when it went through the company’s accounts: Sixty per
cent of the money was spent on business development or office
maintenance and another huge chunk on subsidiary companies. There was
barely anything left for development of land.
The Department of
Company Affairs found that some companies had become subsidiaries of
GFIL through purchase of a majority of shares. Syal had not bothered
with the approval of the Central Government.
The Income Tax
Department sniffed out a trail of bribes the company had paid buying
real estate. The department says it has evidence that the palms of the
registering authorities were greased while purchasing land at Jharmari
for Chandigarh Extension 22 Project.
On an average, the IT
department has estimated bribes at the rate of 1.27 per cent of the
registered value of land at various other places. ‘‘The extent of
evasion of taxes in the hands of this unorganised and unrelated class
of persons is estimated to be approximately Rs 227 crore,’’ the IT
department had observed.
Construction work worth
hundreds of crores was allocated to ADS Builders Limited owned by
Syal’s brother-in-law Hitesh Kumar Sinha. Crores were siphoned under
the head construction of infrastructure. Sinha is also behind bars
now.
A walk through the
Golden Forest
There are no Golden
Forest plantations. None in Kot Villa, Gurgaon and Rewari. Instead,
Syal had been developing a golf course at Kot Villa as well as a
hotel. No GFIL forests in Sirsa, Dehradun and Mussourie in Uttaranchal,
Indora, Kasauli and Hamirpur areas in Himachal Pradesh.
The company’s claim
of 3.90 lakh kher plants in Ropar and Hoshiarpur district were also
untrue. Most of the assets in Himachal (worth Rs 46.25 crore on the
records) were acquired illegally and the property was worth was far
less.
The Punjab government
is taking possession of the surplus land on the orders of Collector
(agrarian) in Dera Bassi. The story is the same in Hoshiarpur
district. Around 4,000 acres of GFIL under Patiala division was
declared surplus two years ago and will be taken over by the
government.
Some other states
including Uttranchal have also initiated action against GFIL in
connection with excess purchase of land.
In Himachal, the Syal
family is facing charges of acquiring land on the basis of forged
documents.
Source:
Indian Express 27.05.2003
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