COALGATE….…The Supreme Court order
The recent order of the Supreme Court on Coal Mines only adds to a huge list of miss-directed Judgments in this country. Countless in the past – like reversal of Telecom Licenses, re-auctioning bandwidth and retrospective Tax laws etc. have only added to more confusion and ambiguity for the business community as a whole.
Let us talk about the recent order on Coal Mining by the Honorable Supreme Court of India. Such coalmines were allotted way back from 1993 onwards. Good amount of coal has been mined, refined, burnt and power produced which in turn has been consumed for the GDP of this nation. The process of Coalmines’ allotment was not questioned and found faulty for years. The entire Government machinery including the CAG, the Lokayukt, Coal Ministry & the Judiciary etc choose to sleep over the issue for almost two and half decades. During such times, massive capacities got built up in terms of Mining, Power and Steel.
It was mostly Large houses that created and carried such capacities and the funding was done by a mix of Equity and Debt. Equity funding was primarily either through internal accruals (belonging to all shareholders) or through public offering of Equity like QIP/FPO/Rights etc… Debt was from banks, which also happens to be public money….So it was PUBLIC MONEY DEPLOYED ALL ALONG WHICH IS AT STAKE…
AND who benefitted from the undue process… the Political parties, certain promoters, few intermediaries and power brokers. By this order, the court has SIMPLY robbed the Public of their Money and allowed these unscrupulous elements in the society to keep the ill-gotten wealth. Is it JUSTICE?
As if this damage and miss-directed judgment was not enough, by passing such an order (a case of knee-jerk reaction) we as a nation have only put brakes to the smooth business wheel of this country. Imagine what this Power hungry country has to immediately face…the condition of shortage of power, closing down of few upcoming Power projects, the shooting of the spot rates in Power.....all pointing towards business going bad and increase in inflation. All projections of businesses can go haywire…
And what is the message we are projecting to entrepreneurs and outside world…That we as a nation are unpredictable and can any time make amendment’s / corrections / pass laws which are applicable in retrospective frame of time…………….So PLEASE BEWARE BEFORE INVESTING HERE ……!
Is this the RED CARPET our Mr. PM was talking while he was in Japan….A Carpet which can be pulled anytime while you are walking on it….! Beware while stepping on this Carpet…!
So please, for heavens sake, for the sake of Entrepreneurial skill, for the sake of this Power hungry country and for the countless small investors and banks who have seen their hard earned money invested in such enterprise vanish overnight …… Please, try to apply more wisdom and foresee certain fallouts of any order before passing them….
By Inani BP
Swan Finance Limited
CAclubindia
