Omit Shah

Amit Shah's electoral affidavit fails to disclose his liability for mortgages that secured dramatic increase in credit for son’s firm

10 August 2018
New documents accessed by The Caravan show that since 2016, Jay Shah's Kusum Finserve has secured credit facilities amounting to Rs 97.35 crore—up by nearly 300 percent in the last year.
SAM PANTHAKY/ AFP/ Getty Images
New documents accessed by The Caravan show that since 2016, Jay Shah's Kusum Finserve has secured credit facilities amounting to Rs 97.35 crore—up by nearly 300 percent in the last year.
SAM PANTHAKY/ AFP/ Getty Images

Amit Shah mortgaged two of his properties for his son Jay Shah’s business venture Kusum Finserve LLP, which has recorded dramatic increase in credit facilities in recent years despite its poor finances. The BJP national president’s contingent liability with respect to this credit facility is, however, missing from his 2017 electoral affidavit. Publicly available documents indicate that in 2016, two of Amit Shah’s properties were mortgaged to the Kalupur Commercial Co-operative Bank, one of Gujarat’s largest cooperative banks, to secure Rs 25 crore in credit for Kusum Finserve. New documents accessed by The Caravan show that since 2016, Kusum Finserve has secured credit facilities amounting to Rs 97.35 crore—in tranches of Rs 10.35 crore, Rs 25 crore, Rs 15 crore, Rs 30 crore, and Rs 17 crore—from two banks, and one government undertaking. The credit extended to Kusum Finserve has gone up by nearly 300 percent in the last year, even while its latest reported balance sheets show a net worth of only Rs 5.83 crore.

Part of the credit facility has been extended to Jay Shah’s firm against three Ahmedabad properties: two plots in Shilaj village of 3,839 square metres and of 459 square metres respectively, and an office space of 186 square metres on the third floor of a building in a commercial complex named Sarthik-II, in Bodakdev.

Amit Shah owns the two Shilaj properties. In a mortgage deed signed between Kalupur Bank and Kusum Finserve in May 2016, he is listed as “Mortgagor no. II,” and an “absolute owner” of the two plots. Jay Shah is listed as the holder of the power of attorney for his father’s mortgaged properties. On being shown the documents, a financial expert said that, when a person mortgages their property for credit, “primarily you are a guarantor—maybe he has no profit share, but he has a stake in this business.”

Amit Shah is a member of parliament in the Rajya Sabha. According to the Representation of People’s Act, the election affidavit of a candidate contesting for assemblies or Parliament should list their assets and liabilities. Under the act, filing false information in an electoral affidavit is liable to be punished with rejection of the nomination.

“An electoral affidavit of a legislator should contain the whole truth and nothing but the truth. If there is prima facie a case of irregularity, then action should be taken against the legislator. The real question here is how harsh should be the punishment that is to be meted out to such politicians,” SY Quraishi, formerly the chief election commissioner of India, told The Caravan when asked what it means for any candidate to omit liabilities from their affidavit.

Kaushal Shroff is a staff writer at The Caravan.

Keywords: BJP Rajya Sabha election Ahmedabad Amit Shah Jay Shah Sanand election affidavit Kalupur Bank GIDC Kusum Finserve Gujarat Industrial Development Corporation Rishita Shah
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