How a legal loophole allows BJP MP Rajeev Chandrasekhar to hide his full wealth from election panel

On March 12, 2018, as a part of his Rajya Sabha application as a Bharatiya Janata Party candidate, Rajeev Chandrasekhar submitted an intriguing affidavit listing his assets and sources of wealth to the Election Commission. The affidavit, a mandatory requirement for electoral aspirants, pegged the businessman-turned-politician’s annual income at Rs 28 crore and valued his family assets at Rs 65 crore.

According to the affidavit, Chandrasekhar held equity shares in six unlisted companies: Vectra Consultancy Services, SPL Infotech PTE, Jupiter Global Infrastructure, Minsk Developers, RC Stocks & Securities and Sanguine New Media.

Missing from the affidavit, however, was Jupiter Capital, the largest company controlled by Chandrasekhar.

Described on its website as an investment and financial services firm, it was set up by Chandrasekhar in 2005. In its first year, the company had four subsidiaries and an income of Rs 15.08 crore. Since then, it has grown rapidly. The company’s 2018 filings with the Ministry of Corporate Affairs report 58 subsidiaries – among them, media companies like Suvarna News, Asianet, Indigo 91.9 FM and Republic; technology firm Axiscades and defence firm Indian Aero Ventures.

Spanning technology, aerospace, media, music, entertainment, hospitality and infrastructure, Jupiter Capital’s subsidaries account for most of Chandrasekhar’s business activities and earnings. The company manages, as its website says, a portfolio of investments estimated at over $1 billion (Rs 7,100 crore). In March, 2018, it reported a consolidated gross income of Rs 1,026 crore.

In contrast, the companies listed by Chandrasekhar in his affidavit are much smaller.

And therein lies a tale. Do read.

More on the asymmetry that rules India’s business insolvency process

Since October last year, Scroll has been (intermittently) reporting on how India’s insolvency proceedings are coming along. Cumulatively, these reports flag a couple of peculiar patterns.

A lot of companies are up for sale — In a country with 7500 companies with a topline over Rs 250 crore, 2511 companies are slated for insolvency proceedings. There are very few buyers. Ergo, companies are changing hands at very low rates, creating in effect a giant fire-sale of Indian companies. This asymmetry between buyers and sellers is interesting. Even as most debt-saddled companies find themselves in insolvency courts, others (a very small set) continue on an acquisition spree.

An example here is Adani Enterprises. One of the most debt-saddled companies in the country, it continues to acquire companies and announce new projects with gusto. One answer why lies in today’s report.

Do please take a look.