December 21, 2015

Alleged Financial Irregularities in GIFT in a PIL

Divyabhash Anjaria, former Director of GIFT Co. Ltd. has come out with allegations and filed a Public Interest Litigation (PIL). He alleged that the Project’s administrators are involved in huge financial irregularities. He has requested the Gujarat High Court to order a probe in the alleged financial loss as also direct the State Government to replace the current Board of Directors with people of integrity and experience.

The High Court has instructed the petitioner for his submissions to establish that the GIFT City is a State instrumentality.

The ex-Director accused IL&FS which is developing the project stating that it has hired consultants like Fairwood Consultants Pvt. Ltd. and some of its WOS (wholly owned subsidiary) for services which it was mandated to provide. Also, the services are being taken at a price which is not on Arm’s Length and the company is paying higher price for those services. It is alleged that the fact of services not having been received on ALP was also noted during the internal audit of the project.

There is demand for a CAG audit and a thorough probe into the financial transactions by a SIT comprising of financial experts. The petitioner also asked the Court to direct that the GIFT City be governed by RTI laws and a PIO (Public Information Officer) be appointed.

The PIL states that the GIFT City project was a major project with an estimated investment of Rs. 70,000 crores and hence the government should have invited bids to invite private firms. However, IL&FS was the preferred choice without a bidding process to carry out these developments. Moreover,  the allottee hired another firm for development instead of providing its expertise.

There is an accusation against Sudhir Mankad who is the former GIFT City chairman. It is alleged that he became the Chairman for the project inspite of conflict of interests. Mr. Sudhir held positions in various IL&FS subsidiaries but still awarded contracts to them without disclosing his interests.

It is also alleged that though IL&FS has got the land on lease of 99 years for just Rs. 1 but it mortgaged the Government land to the Banks and other financial institutions to raise loans of Rs. 1,100 crores.






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