Nitin Gadkari loaned money to companies that invested in Purti Power: I-T smells a rat

NEW DELHI: With evidence emerging to suggest that Nitin Gadkari may have loaned money to firms which invested into Purti Power and Sugar Limited, the income tax department has joined the ministry of corporate affairs in looking at the funding of the company founded by the BJP president.
There are also indications that the Enforcement Directorate may examine the possibility of launching a probe under the Prevention of Money Laundering Act if further evidence of forgery emerges and an FIR is registered.
A TOI examination of the funding web revealed that more than 100 companies could be behind the two dozen firms which have been key investors in Purti group, bringing in amounts ranging from a few lakhs to a few crores in what constituted the first layer of the baffling maze of investments . Many of the 100 companies, spread all over India , were being managed by Gadkari’s aides for a couple of years or so.
Documents filed with the Registrar of Companies reveal another mystifying pattern , that of Gadkari himself lending money as unsecured loans to companies which invested into Purti.
Take the case of Update Mercantile. The company, which is registered at Ghatkopar East, Mumbai, holds 29 lakh shares in Purti group. It received an unsecured loan of more than Rs 80 lakh in 2009-10 from various sources. Of this, Gadkari had lent Rs 14.5 lakh.
The same pattern is seen in the case of another Purti investor , Regency Equifin. The company, registered at Malad East, Mumbai, holds 43 lakh shares in Purti. In 2008-09 , Gadkari gave an unsecured loan of Rs 26 lakh to the firm, of which Rs 10 lakh was returned the next year. In 2011, the loss making Purti gave a loan of Rs 95 lakh to Regency Equifin.
The transactions have triggered suspicion among investigating agencies of round-tripping and money laundering. Sources in the IT department said a report would be submitted to the Central Board of Direct Taxes shortly.