LATE CITY, 18 PAGES, AHMEDABAD, `4.00 ● WEDNESDAY, JUNE 6, 2018 ● WWW.INDIANEXPRESS.COM TheIndian EXPRESS DAILY FROM: AHMEDABAD, CHANDIGARH, DELHI, JAIPUR, KOLKATA, LUCKNOW, MUMBAI, NAGPUR, PUNE, VADODARA JOURNALISM OF COURAGE Nirav’s 5 dummy firms in Hong Kong whose owners earned Rs 8,000 got Rs 8,000 cr LoUs Data entry operator to diamond assorter among owners of firms, says ED complaint in PNB case KHUSHBOO NARAYAN MUMBAI, JUNE 5 EXPRESS NETWORK ● AIRCEL-MAXIS: ED QUESTIONS CHIDAMBARAM P7 OWNERS AND directors of at least five Hong Kong firms that allegedly received about Rs 8,270 crore from Letters of Undertaking (LoUs) issued by Punjab National Bank, on behalf of jeweller Nirav Modi, used to earn only between Rs 8,000 and Rs 30,000 every month, according to the Enforcement Directorate. Referring to these findings in its prosecution complaint filed in the PNB scam case, the ED has said that Modi created over 15 “dummy companies” overseas to allegedly rotate the LoU funds “in the guise of export-import transactions”. It claimed that the directors of five such firms — Brilliant Diamonds Ltd, Eternal Diamond Corp Ltd, Fancy Creation Co Ltd, Sino Traders Ltd and Auragem He created over 15 dummy companies, says ED Company Ltd — were actually junior employees and ex-employees of Modi’s Firestar Group. Identifying some of these persons, the ED stated in its complaint: ■ Bhavik Shah, a former diamond assorter for Firestar International, was named the director of Hong Kong-based Brilliant Diamonds. Shah used to earn Rs 10,478 as salary every month as director of Brilliant Diamonds, which did business worth Rs 959 crore with Firestar International in 2015-16. ■ Ashish Bagaria, a former data entry operator of Firestar India, was made the director of Eternal Diamond Corp at a monthly salary of Rs 8,133. Eternal Diamond executed transactions worth Rs 929 crore with Firestar International in 2015-16. ■ Nilesh Khetani, the owner of Fancy Creation, earned Rs 15,657 every month, while the company engaged in business transactions worth Rs 596 crore with Firestar International. Khetani was a former data entry operator with Jewellery Solutions, a Nirav Modi firm. CONTINUED ON PAGE 2 Biggest outflow of foreign institutional money in 10 years SANDEEP SINGH NEW DELHI, JUNE 5 A SHARP rise in outflow of funds by foreign portfolio investors between April and May due to rise in yields of the US treasury and growing concerns over rising crude oil prices, and its impact on the currency and current account deficit, have resulted in the biggest outflow of foreign institutional money in any calendar year in the last 10 years. While the net FPI outflow in April stood at Rs 15,561 crore ($2.35 bn) and Rs 29,775 crore ($4.4 bn) in May, the aggregate for the first five months this year amounted to a net outflow of Rs 32,078 crore ($4.4 bn). This marks the highest outflow seen in any calendar year since 2008, when FPIs pulled out a net of Rs 41,216 crore ($9.3 bn) from Indian markets amid a global financial crisis. The next big outflow was seen in 2016 when they pulled out a net of 3 GUJARAT Rs 23,079 crore ($3.19 billion). However, the FPI outflow this year is very different from what it was 10 years ago. In 2018, only 5 per cent of the total outflows (Rs 1,599 crore) has been from equity markets and the remaining from the debt market. In 2008, the net outflow from equities was Rs 52,987 crore while the debt markets saw a net inflow of Rs 11,772 crore. According to experts, this is a significant reason why Indian equities have held their ground despite a sharp outflow of foreign institutional money over the last two months. The other major factor is the sharp rise in domestic retail participation in Indian equities through the mutual fund route over the last few years. While the net investment in mutual funds between January 2018 and April 2018 stood at Rs 41,765 crore, that in 2008 calendar year stood at Rs 25,412 crore. SOFI AHSAN CHANDIGARH, JUNE 5 DECLINING BAIL to an alleged member of terror group Babbar Khalsa International, the Punjab and Haryana High Court has held that propaganda and incitement to violence on social media is equivalent to collecting men for waging war against the Government of India, as defined under IPC section 122. The High Court made this observation while ruling against the bail plea of Arvinder Singh, a resident of Pallian Khurd in Nawanshahr, who was arrested in May 2016. The FIR against him said he had arrived from Doha in Qatar seven-eight months earlier, and was recruiting youth for “terrorist activities”. The FIR stated Arvinder had been in touch with Pakistanbased BKI activists while in Doha where he had gone for employment in 2011. Ordering the trial court to decide Arvinder’s case within three months, Justice Sudip Ahluwalia, in his June 1 order, observed that though the accused had not been charged under IPC section 122 (collecting arms, etc with intention of waging war against the Government of India) but the material on record could lead to his conviction for that as well. “It can be safely held that the petitioner by way of collecting ‘men’, with the intention of either waging or being prepared to wage war against the Government of India, would be liable under section 122 of the IPC, which is punishable at par with section 121-A of IPC itself, CONTINUED ON PAGE 2 AIR COMMODORE KILLED IN JAGUAR CRASH The site of the Jaguar fighter crash that killed Air Commodore Sanjay Chauhan near Mundra, Kutch Tuesday. Vimal Joshi REPORT, P 7 BUSINESS AS USUAL Rafale deal on CAG radar, GSTN too BY UNNY RAVISH TIWARI NEW DELHI, JUNE 5 THE RAFALEfighter deal is on the radar of the Comptroller and Auditor General, a source in the national auditor said Tuesday. Also under scrutiny is the Goods and Services Tax Network (GSTN) that provides the IT backbone of the GST system. “The Rafale deal has to be audited by the CAG. For us, it is a routine audit,” the source said of the fighter deal with the French 9 THE IDEAS PAGE Four years of hubris People now know that the government has only marginally built on the legacy of Congress-led governments 11 WORLD IRAN EXPANDS NUKE SITE TO ENRICH MORE URANIUM Political row over deal for the IAF — the deal has been at the centre of a political row with the Opposition Congress alleging that the NDA government paid much more than what Dassault Aviation, the Rafale Cong, BSP tie-up in MP would have denied BJP 41 seats in 2013 election LALMANI VERMA & AAROMAL DCRUZ NEW DELHI, JUNE 5 AS THE Congress and BSP negotiate the contours of a possible seat-sharing deal ahead of three crucial assembly elections, a pooling of votes polled in the 2013 Madhya Pradesh assembly election show that the BJP tally would have reduced by 41 seats had the Congress and BSP come together. While the BJP would have still formed government in MP, the BJP tally in Chhattisgarh would have reduced by 11 seats and the Congress-BSP alliance would have been in a position to form the government. And in Rajasthan, the BJP’s tally could have decreased by nine seats. Cong’s Kamal Nath is in talks with BSP chief Mayawati for seat-sharing arrangement The three BJP-ruled states will go to polls in November this year and Madhya Pradesh Congress president Kamal Nath is holding talks with BSP chief Mayawati on a seat-sharing arrangement, which sources said was almost hammered out. The BSP had contested 227 of the 230 seats in Madhya Pradesh CONTINUED ON PAGE 2 ● PAGE ONE ANCHOR FENCED IN BY DOUBT, SHILLONG’S PUNJABI LANE HOPES FOR A CLEAN BREAK FROM THE PAST ABHISHEK SAHA SHILLONG, JUNE 5 “FOR ALL of us living in Punjabi Lane, our Punjabi identity is the foremost thing, rather than a religious identity. Ever since trouble started in this area, we are together with our Sikh brothers,” says Sonu Chadha, a Christian Punjabi, as his friend ties a turban on him and they rush to the gurdwara to listen to a visiting Sikh leader from Punjab. The gurdwara is located on the second floor of a school building, a church stands next to it, while a few metres away is a temple where space is also kept aside for followers of a sub-sect of Sikhism called Udasi. However, it is this strong regional identity uniting residents of Punjabi Lane, overarching other differences, that makes its divide with the city’s majority Khasi population sharper. Since clashes erupted following an altercation between a Khasi bus driver and a woman from the Punjabi Lane on May 30, the locality next to Shillong’s commercial hub and its largest traditional market place of Iewduh, or Bara Bazaar, has been Appointments will be subject to final order on petitions before us: Bench NEW DELHI, JUNE 5 ‘CBI WANTED KALI DADHIAND SAFED DADHI, ARRESTED LAL DADHI’ Incitement to violence on social media akin to waging war against Govt, says HC Quota in job promotions not barred till we decide: SC ANANTHAKRISHNAN G CONTINUED ON PAGE 2 POLLUTION IN AHMEDABAD WORST, PANEL TO PROBE ITS CAUSE: RUPANI SC/ST GOVT EMPLOYEES Punjabi Lane in Shillong on Tuesday. Abhishek Saha under almost continuous curfew, except for seven hours on June 3. Security personnel chase away anyone trying to enter Punjabi Lane, or those trying to get out despite curfew. On Monday morning, a group of anxious men sat outside their homes discussing the stone-pelting and teargas shelling that had been on all night till 5 am. In the midst of her household chores, Nisha Kaur, in her mid-20s and a mother of two, says, “Life in Punjabi Lane is fine but there have been worries since the violence began.” CONTINUED ON PAGE 2 manufacturer, had quoted earlier when the UPA was in power. “We have to do the Rafale audit like any high value transaction needs to be audited,” the source said, but did not spell out a timeline for its completion. The source did, however, indicate that audit of a high value transaction, unlike a performance audit, is completed quickly and is always a “priority”. In February, The Indian Express cited official sources to report that the NDA government CONTINUED ON PAGE 2 AMID A raging debate on the issue of reservation in promotions, the Supreme Court Tuesday said the government “is not debarred from making promotions in accordance with law”, but “subject to further orders” and “pending further consideration of the matter”. Legal experts said what this essentially means is that the government can extend reservation to promotions as envisaged by the Constitution, but this has to be strictly in accordance with the law as it stands now. And the law that currently holds is the 2006 judgment of the Supreme Court in M Nagaraj & Others vs Union of India. That order upheld the validity of Article 16 (4A) — a special provision which provides for reservation for promotion only to SCs and STs — and said the government can provide reservation in promotions provided it is backed by compelling reasons like proof of backwardness and inadequacy of representation and ensure that it does not affect the overall efficiency of administration. As per the order Tuesday, any such appointment will also be subject to the final outcome of petitions which have raised the 8 THE EDITORIAL PAGE question and are pending before the apex court. The bench of Justices A K Goel and Ashok Bhushan was hearing the Centre’s plea in connection with an order of the Delhi High Court which, in August 2017, struck down a 1997 circular, issued by the Department of Personnel and Training, extending reservation in promotion to SC and ST employees beyond the five years stipulated by the apex court in the landmark 1992 judgment on Indira Sawhney vs Union of India. The High Court had said that this was not supported by any quantifiable data to prove conditions of backwardness etc. Appearing for the Centre in the Supreme Court, Additional Solicitor General Maninder Singh submitted that the entire process of promotion had come to a “standstill” due to orders of various High Courts on the matter and that the apex court too had ordered status quo in one of them. He pointed out that there were separate verdicts by the High Courts of Delhi, Bombay and Punjab and Haryana on the issue of reservation in promotion to SC/ST employees. “How is promotion taking place as of now,” the bench asked. To this, the ASG replied, “They are not. It is all at standstill. This is the problem... I am the CONTINUED ON PAGE 2 The Shangri-La moment BY PRATAP BHANU MEHTA
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