The Paramavaiṣṇava At Stake: Unwinding Piramal, “Thy Name is Controversy!”

The Paramavaiṣṇava At Stake: Unwinding Piramal, “Thy Name is Controversy!”

Posted on 16th November, 2024 (GMT 17:45 hrs)

Updated on 19th November, 2024 (GMT 14:40 hrs)

ABSTRACT

The article exposes Ajay Piramal’s controversies, particularly his alleged misconduct during DHFL’s acquisition, insider trading accusations, environmental violations, and BJP-linked political shielding. It highlights Whistleblower claims of financial harm from discounted loans post-DHFL acquisition and critiques SEBI’s impartiality, suggesting regulatory bias favoring crony capitalism. Broader issues, including the Adani-Hindenburg dispute and SEBI’s lack of transparency, underscore governance concerns. The piece questions the role of watchdogs and judiciary in India’s oligarchic system while advocating vigilance against corporate-political collusion.

DISCLAIMER: The claims, allegations, and arguments presented in this article are subject to further judicial scrutiny and investigation, as the matters in question remain sub judice. Readers are advised not to draw definitive conclusions at this stage.

A few months ago, we enlisted all the major “controversies” surrounding the debatable corporate persona of Mr. Ajay Piramal, the alleged adverse possessor of the DHFL. As our readers are likely well aware, we often refer to Mr. Piramal as a “Paramavaiṣṇava,” a term we use to highlight his religious facade, shaped by his associations with the allegedly CIA-linked ISKCON and the Piramal family’s spiritual guide, Sri Radhanath Swami⤡—a figure entangled in reported legal controversies.

Let us recapitulate the central points discussed in the above article along with our much earlier bio-note about Mr. Piramal entitled WHO IS AJAY PIRAMAL? VIEW HERE ⤡. As of now, Ajay Piramal has been chiefly accused to be involved in the following matters:

1. Insider Trading Allegation (2016): Accused of insider trading activities by the SEBI.
2. Environmental Controversy (2019): Labeled as an “environmental extortionist” for polluting Digwal, Telangana; sought a stay order from NGT, which was denied.
3. Flashnet Scam (2018): Implicated in a financial scam with the BJP Union Minister Piyush Goyal exposed by The Wire.
4. DHFL Case Misconduct (2021-2022): Allegedly defied NCLT (19/05/2021) and NCLAT (27/01/2022) orders during the DHFL resolution process, bordering on alleged contempts of court.
5. Loan Probe (2021): ED investigated a ₹2,000 crore loan to Omkar Developers; later, Piramal assets received protection from the Delhi HC.
6. Shriram Finance Stake Sale (2024): SEBI flagged issues with an 8.34% stake sale.
7. Political Connections: Reports claim Piramal-linked firms contributed heavily to BJP via electoral bonds, which amounts to 85 Cr.
8. Speculated Political Shielding: Overall suggested reliance on BJP’s political support for survival amidst controversies, given his kinship connection BJP’s favoured tycoon: Mr. Mukesh Ambani.

Please note that in the above list, Mr. Piramal has twice been put under the SEBI’s note of concern with regard to the issue of alleged insider trading as well in relation to the stake sale of Shriram Finance.

Once, we also noted how Piramal Realty‘s business is frequently involved in one-sided agreements, exploitation through skewed exit clauses, and ineffective legal safeguards, suggesting systemic exploitation in its real estate dealings. All this was exposed by Krishnaraj Rao.

Now, we also recount the following in the list of “anonymous strikes” on Mr. Piramal:

The above article of ours discussed a ransomware attack by the BianLian group on the Piramal Group. The hack allegedly exposed sensitive information, used for ransom demands. The incident is linked to broader issues of cyber ethics, activism, and corporate accountability, with parallels drawn to the misuse of surveillance tools like Pegasus and Tek Fog by the crony oligarchical fascist BJP. It critiqued Mr. Piramal’s actions and raised questions about transparency and justice for victims of financial misconduct, including those related to the DHFL scam therein.

Now, we have noticed something quite recently on the news, which also falls under the list of strikes under the veil of deliberate anonymity:

SEBI is proposedly investigating Whistleblower claims against Piramal Capital & Housing Finance Ltd (PCHFL) regarding discounted loans transferred from DHFL to entities linked to Piramal Group promoters. Allegedly, these transactions caused financial harm to public shareholders of Piramal Enterprises Limited (PEL). Loans were reportedly assigned at deep discounts to entities like Encore Natural Polymers, yielding profits for the recipients. The Whistleblower also questions fund origins tied to defaulter Sudhakar Shetty. This follows a broader CBI inquiry into DHFL’s financial mismanagement involving Rs 14,000 crore. No official responses have been issued till now.

Whistleblower Seeks Sebi Probe Into Piramal Entity Selling DHFL Loan At Steep Discount VIEW HERE ⤡ (As reported on 14th November, 2024 ©Business World)

SEBI launches enquiry into alleged irregularities in Piramal’s acquisition of DHFL loans, says report VIEW HERE ⤡ (As reported on 15th November, 2024 ©DNA India)

The financial implications of the above event reveal a stark disparity: Piramal acquired DHFL’s assets worth ₹95,000 crore for a mere ₹14,700 crore. Now, with Encore demonstrating significant recovery from these assets, it raises a crucial question—why was the original borrower, DHFL, or its bankers unable to achieve similar results? Had the bankers taken proactive steps earlier, the recovery of funds could have been substantially higher, directly benefiting depositors and mitigating their losses. This underscores a missed opportunity for a more equitable resolution.

One may view the SECTION 14 of the following OBMA article in order to grasp the lacunae involved in auditing the DHFL on the eve of its inclusion to the CIRP under the ill-conceived IBC:

Hence, this is the third time that the names of SEBI and Mr. Ajay Piramal are being associated together in the context of the allegedly forcible acquisition of the DHFL by Mr. Piramal.

In May, 2024, we saw how Piramal Enterprises planned to merge with its UNLISTED housing finance arm, Piramal Capital & Housing Finance (PCHFL), to supposedly simplify its structure and give its shareholders direct access to the lending business. It was said that shareholders will receive equity shares in the merged entity, renamed Piramal Finance, plus redeemable preference shares. The merger aligns with RBI guidelines requiring listing for upper-layer NBFCs by 2025 and restructuring to comply with licensing rules. The merger reportedly aims to enhance flexibility and stakeholder value, with completion expected in 9–12 months: Piramal Enterprises to merge with unlisted housing finance arm for listing VIEW HERE ⤡ (As reported on 9th May, 2024 ©Business Standard)

As a matter of fact, we had delved earlier on the confusing “naming(s)” of the housing finance company of Mr. Piramal, as it oscillated amidst “Piramal Capital and Housing Finance” on the one hand and “Piramal Finance” on the other, immediately upon its supposed “occupation” of the DHFL. View these two articles of ours in particular in this regard: AN RTI ON “WHO OWNS DHFL NOW: PCHF OR PIRAMAL FINANCE?” VIEW HERE ⤡; The Dilemma of schizophrenic selves: the changing names of companies under the Piramal Group: A letter to Mr. Ajay Piramal VIEW HERE ⤡.

It has also been recently reported that Piramal Capital, through its so-called “restructuring” efforts, is conducting the auction to sell ₹702 crore of distressed loans. These bad debts stem from Piramal’s acquisition of Dewan Housing Finance Corporation (DHFL) and its associated liabilities. The move is part of Piramal’s strategy to shed non-performing assets and pivot towards retail financing, strengthening its portfolio in areas like microfinance and gold loans.

Piramal Capital seeking counterbids to sell Rs 702 cr of bad loans VIEW HERE ⤡ (As reported on 17th November, 2024 ©Business Standard)

In fact, this entire event reveals the chaosophical nature of the moribund neoliberal arena of stock markets, of accounting, of valuation of assets, of corporate entitlements and so on. Chaosophy, in this context, refers to what Guattari called as the “irrationally rational” or “deliriously rational” nature of such phenomena.

What could one even expect from the SEBI in such dire circumstances, so to speak?

We cannot let go of the fact that the SEBI’s incumbent higher ranked officials are making profits by virtue of fully utilizing the BJP’s crony connections with Mr. Gautam Adani (The “MODANI” connection!!), as alleged through the second consecutive report by the Hindenburg Research team. Let us briefly go back to this issue for the time being.

The second Hindenburg report released in August 2024 ignited further controversy, dubbed as Hindenburg 2.0, as it elicited significant concerns regarding potential conflicts of interest in the investigations surrounding the Adani group’s alleged fraudulent activities. This report specifically claims that Madhabi Puri Buch, the chairperson of the Securities and Exchange Board of India (SEBI), previously invested in offshore funds associated with Vinod Adani, alongside her husband Dhaval Buch (holding stakes in obscure Bermuda and Mauritius funds). Citing various Whistleblower documents, Hindenburg asserts in this follow-up report that the Buchs invested in one of these sub-funds in 2015 and divested in 2018. This allegation has gained traction, bolstered by earlier concerns highlighted by a Supreme Court-appointed panel in March 2023, which revealed that SEBI faced challenges in tracking offshore funds linked to the Adani group.

SOURCE: Who is Madhabi Puri Buch? The SEBI chief allegedly embroiled in Hindenburg’s latest Adani report VIEW HERE ⤡ (As reported on 11th August, 2024 ©The Economic Times)

SEE MORE: India’s Adani vs Hindenburg Research: What you need to know VIEW HERE ⤡ (As reported on August 12, 2024 ©Reuters)

Furthermore, the SEBI faced criticism for refusing to disclose details on recusals by its chairperson, Madhabi Puri Buch, in conflict-of-interest cases. SEBI cited Section 7(9) of the RTI Act, claiming resource constraints, but transparency advocates argue this is misapplied to avoid sharing information amidst allegations by Hindenburg Research linking Buch to Adani-linked offshore funds. This raises concerns about SEBI’s transparency and impartiality in regulating financial markets, undermining public confidence in its role during a critical investigation.

Hindenburg Buch Allegations: SEBI Invoking Section 7(9) of RTI Act to Avoid Sharing Information Raises Further Questions VIEW HERE ⤡ (As reported on 14th November, 2024 ©The Wire)

More on the above issue here:

In each case involving Adani or the Buchs, the ruling BJP in India labeled the Hindenburg Team’s efforts as an “anti-India” campaign supposedly aimed at damaging India’s global image, claiming it was financed by the “controversial” George Soros and his associates. However, the main questions were largely overlooked by the responsible agencies. In January 2024, India’s Supreme Court declared that the Adani Group would not undergo further investigations beyond the ongoing review by the market regulator SEBI, providing relief to the Adani conglomerate following the initial Hindenburg report.

SOURCE: India’s Adani wins court relief on scrutiny after Hindenburg attack VIEW HERE ⤡ (As reported on 3rd January, 2024 ©Reuters)

In July 2024, just before the second Hindenburg report connecting SEBI’s chairperson to Adani, the Supreme Court of India dismissed a petition to review its January ruling, which supported SEBI’s investigation into claims of stock manipulation and fraud by the Adani Group. The court stated that SEBI found “no evidence” of a market-level threat from Adani’s actions. The review petition questioned SEBI’s findings, but the court rejected it.

SOURCE: SC rejects plea to review its January verdict upholding SEBI probe into Adani-Hindenburg case VIEW HERE ⤡ (As reported on 15th July, 2024 ©The Hindu)

Pertinent Back Reference: The Supreme Court also gave a “blanket” (?) stay order on the NCLAT verdict dated 27.01.2022 that questioned Mr. Piramal and the RBI-appointed CoC in the DHFL scam, thus somewhat going in favour of Mr. Piramal profiteering agenda.

Why is the BJP and the Supreme Court of India APPARENTLY so eager to defend this Adani conglomerate as well as other politically prioritized crony-monopoly capitalists such as Mr. Ajay Piramal? Why is there such a drive within the ruling oligarchy to equate Adani-Ambani (and family) with India, as pointed by the political opposition of India?

Hence, considering the current bias of SEBI, which appears to favor the BJP and its associated interests, we have significant reservations about the objectivity with which the Whistleblower allegations regarding Mr. Piramal’s DHFL acquisition will be investigated, raising concerns that many of these issues may ultimately fade into obscurity.

Moreover, the fact is that there appears to be a continuing cycles or chains of such vigilante agencies, i.e., even if SEBI probes into these allegations by a Whistleblower and acts upon the same, it might as well be set aside in the future by the SIT (as it happened in the case of the previously mentioned insider trading allegation on Mr. Piramal), which might further be challenged by a consequent investigation by agencies such as Hindenburg Research and so on and so forth. In most cases, these vigilante agencies appear to be acting as double agents like 007, being both in favour and against (at the same time) of the accused institution/agency/company/individual. In this way, a vicious cycle of vigilant agencies crop up, giving the financially abused no immediate respite, no visible scope for escape…

We wish to ask another question further in this very connection: WHAT WERE THESE VIGILANT AGENCIES DOING WHEN THE DHFL SCAM (AND OTHER SIMILAR SCAMS) WERE TAKING PLACE WITH ALLEGED INVOLVEMENT OF THE RULING POLITICAL ENTERPRISES (Remembering Satyajit Ray’s Seemabaddha (Company Limited; 1971)⤡?

Yet, it remains to be seen what develops accordingly as we sway in between the two extremities of being an optimist and a pessimist in the current Republic of India predominated by the ruling party’s vested interests…