The Namo Story – Gandalf and His Flo Chart


Excerpt

Gandalf And His Flo Chart
As Narendra Modi sets about pursuing his ambitions with a well-crafted image of a ‘doer’ and a politician ‘who means business’, a new biography separates the man from the myth, Outlook
The Namo Story A Political Life
THE NAMO STORY A POLITICAL LIFE
BY
KINGSHUK NAG

PUBLISHED BY ROLI BOOKS | PAGES: 188 | RS. 295

A lot of the myths around Modi and his economic prowess are based on half truths and gross exaggerations. Modi’s hyped Vibrant Gujarat shows, for instance, convey the impression that Gujarat leads other states in attracting foreign investment. But the truth is that Gujarat has received only 5 per cent of foreign investments in India in the last 12 years. Maharashtra and the National Capital Region of New Delhi are far ahead.

Nowadays and more often than not, the website of the Gujarat State Petroleum Corporation (GSPC) does not open easily. It is as though the bosses of GSPC do not want information about the company to be public. But this was not always the case. On a Sunday at the end of June 2005, during torrential monsoon rain over the city of Ahmedabad, Narendra Modi suddenly called for an evening press conference. Rudely awakened from their post-lunch siesta, mediapersons tore to the Sardar Patel Institute of Public Administration to figure out what the matter was. Modi was at his ebullient best: “I am proud to announce the biggest gas find in India. We have discovered more than 20 trillion cubic feet (TCF) of gas. GSPC has discovered this gas which is valued upwards of $50 billion,” Modi said. The gas had been struck at the distant Krishna-Godavari Basin off the coast of Andhra Pradesh, where GSPC had taken up exploration. Modi’s officials were quick to point out that the discovery made by GSPC was higher than the 14 tcf discovered by Reliance Industries Limited (RIL) in the same basin.

The hype created by GSPC soon emboldened Modi to egg the state government-owned company to go international. GSPC took up blocks in Egypt, Australia, Yemen and Indonesia. Earlier, Modi had signed an MoU with Russia’s Astrakhan province for the same purpose.

Less than eight years later, the GSPC bubble burst. After some false indicators, the discovery proved to be nothing but a mirage. The Directorate-General of Hydrocarbons, which independently evaluates such ‘discoveries’, had figured out that the find was not worth 20 tcf but only about 2 tcf. GSPC managers realised that even this 2 tcf would be difficult to extract because the costs would be very high. According to a senior official, Modi was informed about all this two years ago. He heard the matter out and said nothing more. Obviously, no public announcements were made, but GSPC had reputedly borrowed upwards of Rs 9,000 crore to fund the exploration that has, so far, yielded little. At the fag-end of the campaign for Election 2012, Arvind Kejriwal had also brandished documents to show that GSPC had entered into a partnership with a company based in Barbados and had thrown away its stakes for a pittance. This has apparently rattled Modi who has built his image on probity.

Modi may not have berated his officials. But to cover up all this and in a bid to be seen as a successful venture, GSPC has spawned several subsidiaries in related businesses like gas transmission, gas purchase and sale and even supply of gas to domestic households. In the first week of October 2012, it bought 65 per cent of the equity in Gujarat Gas Company, an entity owned, till then, by British Gas, an MNC. If newspaper reports are to be believed, there was an element of coercion in the takeover: by raising the prices of supplies, Gujarat Gas, which supplies domestic gas in Ahmedabad, was locked in a dispute with the Gujarat government.

Later, British Gas put up Gujarat Gas for sale. Media reports allege that Adani Gas and Torrent Power, two private companies interested in the purchase, were advised to keep away. In the end, GSPC took over Gujarat Gas at a cost of Rs 2,694 crore that was a heavy discount from the market price of Rs 4,000 crore British Gas was expecting. Barely three weeks later, on October 21, Britain’s high commissioner in India, John Bevan, called on Modi, ending 10 years of boycott of the Gujarat chief minister. Her Majesty’s government announ­ced that the engagement was to further British business interests in Gujarat. Thus, Modi was able to achieve twin objectives: provide for a profitable revenue stream for the down-in-the-dumps GSPC, and rein in the British, whose attitude had been troubling him for long.

Riots and After

It was as if the entire Gujarati society held the community of Gujarati Muslims responsible for the Godhra train incident, even though it had taken place far from Ahmedabad. The collective national conscience was jolted by these acts and yet the local press seemed in sync with the mood in the state. Worse still, representatives of the Cong­ress, who should have been galvanised into action, were untraceable. Gujarat Congress chief and former chief minister Amarsinh Chaudhary was nowhere to be seen. Protesting the mayhem were only members of ngos; their voices did not carry far. In some places, though, local communities refused to be drawn into the rioting: a good exa­mple is a 20,000-population slum, Ram Rahim Nagar, that had both Hindus and Muslims living side by side, which maintained absolute peace. In many places, Dalits who had lived cheek-by-jowl with Mus­lims were being drawn into the conflict. Leaders of the Left and the Samajwadi party did arrive in town on the night of February 28, but they were unable to get the police commissioner to act.

News of the trouble shook the Delhi esta­blishment. Defe­nce minister George Fer­nandes was dispatched to Ahmeda­bad to deploy the army (if the state government wanted it) and bring the situation under control. Fernandes, a socialist who had visited Ahmedabad in 1969 as an activist in the midst of major riots, was shocked by what he saw. I met him on March 2 at the Circuit House. Though I had no previous acquaintance with Fer­nandes, he sent away the chief secretary and other heads of civil administration, and sought a detailed report from me. It was clear from the conversation that Fernandes was getting contra-indications about the intention and seriousness of the government in trying to put down the violence. At the end of a three-hour conversation, Fernandes volunteered that he had heard the arsonists had been given three days to do whatever they wanted. I told him this was unconfirmed news off the grapevine. The meeting ended when minister of state for defence, Harin Pathak—who was also the Ahmedabad MP and a hardcore Hindutva man—barged into the room. He flung himself on the sofa: his body language suggesting that he did not want this meeting to continue. Meanwhile, Modi was seen doing nothing to control the situation. There were murmurs in senior police echelons that their chief had been asked to keep silent. Stories were doing the rou­nds about how Modi had called a meeting of senior civil and police officials at his home on the evening of February 27 saying that if there was a Hindu reaction it should be “allo­wed”. The allegation of such a statement being made by Modi has persisted for many years. But it has been denied by Modi, who was many years later quizzed by officials of the SIT.

The decision to bring the charred bodies to Ahmedabad was taken at a meeting presided over by Modi, despite being told it was ill-advised.

The SIT gave him a clean chit saying there was no “prosecutable evidence” to try Modi. Of course, the fact that such a meeting to review law and order was held has never been denied. I asked Modi’s then private secretary, Anil Mukim, whether his boss had ever spoken of allowing a “Hindu reaction”. He told me: “Not in my presence.” However, it is a fact that the decision to bring the bodies of those who perished in the Godhra carnage to Ahmedabad was taken at a meeting presided over by Modi, even though civil servants and police had warned that such a move was ill-advised and could lead to a law-and-order situation. The charred bodies were brought in trucks to Ahmedabad in the wee hours of February 28. This contributed towards inflaming the public mood, especially because no curfew had been imposed in anticipation of trouble. It was also strange that the bodies of those killed in Godhra were handed over to the office-bearers of the VHP, and not to the next-of-kin of the deceased.Rioting started in the early morning of February 28. In one of the first instances, a British Gujarati Muslim family ret­ur­ning to its ancestral village was waylaid on the highway and killed. Modi’s minister Haren Pandya, who was later slain, told me he had also advised against a move to bring the bodies to Ahmedabad, but was shouted down by cabinet colleagues who said a “reaction” in Ahmedabad would benefit the BJP in the next elections. Pandya subsequently tend­ered this evidence in camera to a Citizens’ Tribunal comprising retired high court judges. He told them about a meeting of ministers where Modi had talked about allowing a “Hindu reaction”. I later asked Pandya whether he had, in fact, given such a testimony and what made him do so. He claimed he understood the “Hindu anger” as a reaction to the Godhra incident but could not reconcile with the killing of people in retaliation.

Incidentally, Pandya was also part of a mob which had participated in arson, but not killings. An inquiry by the nhrc later reported that the then home minister, Gordhan Zadaphia, had raised his fingers in a victory signal even as killings were going on. So bad were the riots that even a sitting Muslim judge of the Gujarat high court was targeted at his official residence. He had to be rescued by well-wishers and shifted elsewhere. The collector of Gandhinagar—a Muslim—had his car stoned. In many parts of the state, hoardings came up welcoming visitors to the ‘Hindu rashtra’. A sign in Ahmedabad welcomed them to ‘Karnavati’ (the anc­ient Hindu name of the place where Ahmedabad came up in 1411). When a journalist queried VHP president Keka Shastri how marauding crowds were able to target commercial establishments owned by Muslims—in spite of their carrying no board proclaiming their ownership—and leave out Hindu-owned establishments, he said that a list of the ownership of establishments—religion-wise—was available with his organisation…. Journalists like Sheela Bhatt believe (though these views do not have many takers) that when riots broke out after the Godhra carnage, Modi “got damn scared”, but persisted with (ill-advised) bravado.

Modi: The Man

Modi’s knack for gauging the public mood is attributed to his days in the RSS. Like all organisers, he was groomed to speak and listen to a huge number of people and gather information. “I am half a newsman,” remarked Modi when I entered his chief ministerial office one day, many years ago. Modi was reading reams of papers on his table: printouts of freshly-filed stories on the newswires. “The way he gossips is not funny…” says a journalist who knows him well. “He can be a newsman’s delight or nightmare, depending on which way you look at it,” says ano­ther reporter. His reason: Modi makes it a point to read and scrutinise newspapers and websites and react to the stories almost immediately. Most contemporaries of Modi across the nation are not known to be so alert and on the ball. This reliance on gathering information has also helped Modi develop another skill: that of public relations which, in some ways, is a related trade. A good example is the 3D technology Modi leveraged in the last election. Film director Mani Shankar from Hyderabad, who imported the technology from the UK where it is used to beam music shows, shared: “We did not approach Mr Modi with our services. His men sought us out.” Modi was dressed differen­tly each day for the 3D show: in an array of multi-coloured kurtas. A public relations specialist says Modi seems to bel­ieve in the dictum that “style is the man”. He is well-groomed, wears good clothes, dons Ray-Ban sunglasses and shows off pedicured feet with clipped nails and scrubbed skin.

When TOI reported how Modi and Advani entered Akshardham to pose next to the bodies of the slain assailants, Modi was incensed.

Those who know him well say he has been fond of good attire and personal grooming from the beginning. “He came from a very small town where most people did not iron their clothes. Modi, as a boy, had no access to ironing services. But he would try to press his clothes by using some heavy objects or whatever he could lay his hands on,” says journalist Darshan Desai who has researched his early days. RSS insiders remember how he ran afoul of his bosses in his early days in the organisation, when he trimmed his beard in order to look better. This apparently was not the norm in the RSS, at least then. In the early ’80s, he started patronising a barber—a Muslim incidentally—who had his salon close to the RSS headquarters and who gave him a Rajesh Khanna-style haircut. A few years later, Modi started riding a Bajaj Chetak scooter. After becoming chief minister, he began patronising Jade Blue, a clothing outfit in Ahmed­abad. Tailors from Jade Blue reportedly go to his house and take his measurements. The shop has now developed its own brand of Modi kurtas.If stylish clothes go a long way in enhancing personality, so do pictures. Modi knows this well. If those who have had a peep at his portfolio are to be believed, it contains hundreds of shots of the big man striking various poses. Modi loves to project himself as a hero, a powerful man, destroying all villains. Any contra-projection ang­ers him. I got a taste of this on the morrow of the Akshardham incident in Sep­tem­ber 2002. When the Times of India reported how Modi and Advani ventured to enter the complex and pose next to the bodies of the two assailants who had been shot to death, I was greeted by an early morning call from an incensed Modi. “Why are you writing that we went in after the intruders were killed? It conveys that I am a weak man,” Modi said.

Analysts agree that Modi loves his image of an Alpha-Male. “He is especially the subject of adulation amongst women. Many well-educated, well-heeled women swoon over him. Many are head-over-heels in love with him, without knowing him personally,” confirm observers. “Gujarat is essentially a mercantile state with no martial tradition. Heroes of the Bollywood type, successful in doing the impossible, are conspicuous by their absence in Gujarat. Perhaps there is a perceived need for such heroes, especi­ally amongst women. The image of Modi satiates that need,” speculates Reema Desai, a 40-year-old Gujarati woman who lives in Mumbai. Many journalists on the Modi trail in the last elections confirm this adulation is waning.

Weaving fantasies is part of the Modi myth. Many in Gujarat who participated in the Navnirman movement of 1974 say Modi fans try to project him as the hero of the movement, when he did not even have a role in the affair. They also say it is ludicrous to suggest Jaya­prakash Narain was impressed by what he saw of Modi in those days. “This is absolute balderdash,” says social activist Hanif Lakdawala.”‘I am not too sure JP even encountered Modi.” “Wonder if such myth-making has the support of Modi,” says another student leader of those days. He points out how the cries of “dekho dekho kaun aaya, Gujarat ka sher aaya”, which greet Modi at election meetings, may not be all that spontaneous. Even Modi’s men do not deny their boss has the knack for creating hype. Every­body agrees Modi is a good orator and an effective public speaker. Part of this ability is God-given and part developed by training in the RSS. But almost everybody agrees Modi hits opponents below the belt and resorts to cheap humour that titillates but is not expected of a person so high in public life. “To that extent, he has not overgrown his mofussil days. Such cheap diatribes are lapped up by rural crowds,” says a minister in his government. A TV anchor says Modi used to be crude on the box before he became chief minister—“he was ready for a fight and often his facial expressions put off many vie­wers.” All through Election 2012, he referred to Prime Minister Manmohan Singh as ‘Maun’ Mohan Singh, alluding to the silence he maintained on many public matters. “This is the sort of stuff that goes around in SMS jokes, not fit to be part of a speech of a leader,” says journalist Paranjoy Guha Thakurta. The instance of Modi labelling Sunanda Puskhar as the “Rs 50 crore girlfriend” of Congressman Shashi Tharoor also indicates the Modi brand of humour. This author also recollects how he was the butt of this cheap humour in the midst of the 2002 riots. A colleague received a phone call from an inspector of the intelligence branch, who informed her that there was the threat of physical attack upon the author. The author immediately called up the chief secretary and dgp, who were nonplussed and seemed to be ignorant of the threat. A little while later, Modi called up the author himself and guffawed: “What is all this that I am hearing about a life threat to you? Arrey, I only told the intelligence to ensure your safety. After all, you are writing so much against the police that I thought that somebody could attack you, ha ha ha.” In another instance when the author encountered Modi in public after many months, during which he had lost a substantial amo­unt of weight, the big man said: “You seem to be suffering from diabetes.” The statement was greeted by a stunned silence by Modi’s men. A minister in attendance tried to cover up by saying that Modi sahib was wondering whether you have started going to the gym.

Can he become prime minister?

It takes neither a degree in rocket science, nor one in psephology, to guess who was happiest when Modi won the Gujarat assembly elections for the third time in a row. Of course, the party in question will never admit to its euphoria in public. But when Modi took oath at a glittering event at Sardar Patel Stadium, leaders of the Congress—albeit priva­tely—applau­ded the loudest. To them, Modi’s victory was a certain sign that he would inevitably make his way towards Delhi as the BJP’s next prime ministerial candidate—and therewith consolidate minority votes across the nation against the BJP and in favour of the Congress.

“Muslims in Gujarat—to some extent—may have made their peace with Modi, but in minority circles across the nation, he is nothing but a hate figure. His projection of being a great performer on the economy front cuts no ice with the minorities,” says a senior Congress leader.


Photograph by Siddharaj

With Modi being projected as PM candidate, Congress believes it’ll get Muslim votes. But Muslims are fed up of being taken for granted.

India’s electoral system—called the first-past-the-post—does not require a candidate (or a party) to get a majority of votes to get elected. Often, candidates and parties come to power based on minority votes. Now consi­der the fact that Muslims make up nearly 15 per cent of the electorate. The belief in Congress circles is that Muslims will vote for the Congress with a vengeance. To get another 15 per cent is not such a great deal, feel Congress leaders. In fact, the victory of the Congress-led alliance in both 2004 and 2009 is attributed to the votes it got from Muslims. This was topped up by votes from other sections. The performance of the Vajpayee gover­nment (1999-2004) was good and India was really ‘shining’. In 2004, liberalisation was more than a decade old and the benefits of reforms were being felt across India in the form of higher disposable incomes and better lifestyles. Vajpayee’s image was good and the government did not provoke a strong anti-incumbency. Yet, much to analysts’ surprise, the NDA government was booted out of power. What happened?“Vajpayee had made an attempt to make Modi quit his post in 2002, but failed. The consolidation of Hindu votes in Gujarat brought Modi back to power in Gujarat, but the consolidation of minority votes against the BJP forced the government out of power in New Delhi,” confesses a BJP insider. The same sentiment returned the Congress-led alliance back to power in 2009, at a time when there were murmurs that Modi could possibly cross over to Delhi. “The Congress allowed itself to be destroyed in Gujarat by Modi, but in the process strengthened itself at the federal level,” chuckles a Congress leader.

The Congress is hoping for an encore in 2014, but politics seldom follows a predictable path. For one, Muslims are fed up of being taken for granted by the Congress government. “They feel that they have nowhere else to go and that with the BJP around, they will have no option but to vote for the Congress. But this is a fallacious belief,” says Altaf Hussain, a Muslim businessman from Mumbai. “I would say that many Congress leaders are soft Hindutva proponents who pay only lip service to our cause.”

Changing alignments in the Muslim pattern of voting have been confirmed by the estrangement of the Majlis-e-Itte­hadul-Muslimeen (MIM) from the Congress. Staunch allies for nearly three decades, the MIM, which is a force in Hyderabad (where Muslims constitute some 35 per cent of the population), has walked out of the UPA alliance in New Delhi and the Congress government in Andhra Pradesh. Though he refrains from calling Sonia Gandhi names, MIM party chief Asaduddin Owaisi has been shouting from the rooftops that the Andhra Pradesh chief minister is ‘communal’. MIM is now expected to join hands with a breakaway Congress faction: the YSR Congress led by Jagan Reddy. The latter, who has ruled out a tie-up with the BJP, favours a loose alliance of third parties across the nation. Such an alliance may potentially include the Nationalist Congress Party (NCP) of Sharad Pawar in Maharashtra, Mulayam Singh Yadav’s Samajwadi Party in UP and the YSR Congress in Andhra Pradesh. This alliance may tilt the Muslim votes in its favour, so the Congress gambit may be misplaced. But this will be of little solace to Narendra Modi, other than the fact that the two combinations may undercut each other. In fact, this is what had happened in the recent Gujarat elections over some seats: though the Congress could have won because of sizeable Muslim votes, the BJP did instead. The presence of independent Muslim candidates divided the vote, thereby affecting the Congress. A prime example was the Jamalpur-Khadia assembly seat in Ahmeda­bad, where Muslims account for 60 per cent of the votes. Yet the BJP had the last laugh, because up against the Congress Muslim candidate was another—a rebel Congress Muslim. They cut into each others’ votes and the BJP candidate sailed through.

Senior leaders of the BJP are falling over each other to congratulate Modi and hail him as the suitable prime ministerial candidate. Many of them, both BJP national leaders as well as satraps of different states, scrambled to Ahmedabad to attend Modi’s investiture. Still insiders say that the last thing they would want is to have him lead the party.

“Even the RSS, the mother organisation of the Sangh parivar where Modi began his political life, is opposed to him,” confides a party insider. “The RSS is a disciplined party but everybody who knows him well is aware that Modi will not listen to Nagpur at all and hijack the BJP to serve his own end,” the insider, who has risen from the ranks of the RSS and is now in the BJP, discloses. Incidentally, the RSS, even in Gujarat, is opposed to Modi because of his ‘self-willed’ ways. If party veterans are to be believed, the trio of L.K. Advani, Arun Jaitley and Sushma Swaraj, too, would like to keep Modi at bay. “Advani is already 85 years old. This is his last chance to become prime minister. He would not like Modi to upstage him,” party sources reveal. Though Advani was Modi’s original benefactor in the BJP, those who keep close tabs on the relations between the two aver that the former is totally dependent on the Gujarat chief minister to get elected to the Lok Sabha from the Gandhinagar constituency. They also point to how Modi has drawn more applause at election rallies they have jointly addressed since 2004.


Photograph by Jitender Gupta

“In some ways you don’t have to formally designate him candidate for PM,” says a political analyst. “He is already so in public perception.”

The crafty ‘legal eagle’, Arun Jaitley, is close to Modi and has contributed hugely to the latter’s cause. “Jaitley is a great strategist and a brilliant lawyer. But he has no political base of his own,” says the insider. He deduces that even if a BJP-led coalition comes close to power, it could succeed only if it has a prime ministerial candidate acceptable to all. “That means a Manmohan Singh-type of prime minister. Jaitley feels that he himself could fit the bill,” a party insider asserts. Of course, there is no concrete proof of Jaitley’s strategy. But the insider says that if Modi fails to become prime minister, Jaitley wants that Modi should support him. The argument is that since the lawyer has no political base, Modi will not be threatened by him and therefore he can afford to bide his time as Jaitley holds the reins. But in the corridors of power in Delhi, the belief is that the relations between Modi and Jaitley are a bit frosty these days. This would imply that if push comes to shove, it cannot be taken for granted that Modi will root for Jaitley, who is a Rajya Sabha MP from Gujarat and has got a fresh, six-year mandate in 2010. But the days preceding his nomination were marked by intense speculation that the Delhi lawyer would have to seek accommodation from some other state. Sushma Swaraj wants to be the first woman prime minister of the BJP. Indeed, during Shiv Sena supremo Bal Thackeray’s lifetime, she had sought and secured his support too. But to the RSS, Swaraj is suspect because of her husband Swaraj Kaushal’s socialist background. There is no love lost between her and Modi either. Her comments at Vadodara amidst the heat of electioneering, that Modi could be a prime ministerial candidate, are attributed to convoluted political logic that only politicians can make head or tail of. In the words of a BJP insider, Sushma, by projecting him as a prime ministerial candidate, wanted to keep Modi in Gujarat till 2014 and prevent him from becoming the BJP president. The argument goes that as BJP president in Delhi, Modi would consolidate his position faster than if he were to remain in Gandhinagar as the chief minister. In the event, Modi did not press for his candidature after (Nitin) Gadkari stepped down. This was perhaps due to strategic reasons and internal opposition.Strong BJP chief ministers like Shivraj Singh Chauhan of Madhya Pradesh and Raman Singh of Chhattisgarh have not shown any inclination to bid for the top post. The possibility of them throwing in their hats at a later stage cannot be discounted. “Our chief minister’s performance has been brilliant. Chauhan is a great administrator and has brought so much investment into the state. But he works silently and does not make a big song and dance like Modi. He is good material to be a prime minister,” says Anil Sharma, a merchant from Indore and a BJP supporter. There is a similar support for Raman Singh whose strong stand against Maoists is cited as evidence of his being a strong man. It is not that Modi does not know of these inner machinations of senior leaders of his party. But he also knows that he is very popular with the middle-rung leaders and the rank-and-file of the party, the kind of people whose personal ambitions don’t clash with his and who are looking for a leader who can take them to victory. Modi knows that it is only a BJP victory that can give such smaller leaders a share of the spoils of office. He is also aware that these leaders consider him the only one cut out for the job. “Modi sahib will overpower the opposition inside the party bec­ause of the massive support he enj­oys at the grassroots level. The BJP bosses may lock the doors in Delhi, but our leader will break open the lock and with the tremendous support of the state party workers Modi will be anointed as the bjp’s PM candidate. A chief minister like Shivraj Singh Chauhan can be good but they can­not lead the party to victory nationally,” says a Modi acolyte in Gujarat….

“In some ways you don’t have to formally designate him as prime ministerial candidate of the BJP, he is already so in public perception,” a political analyst suggests. Though it is virtually a fait accompli that Modi will be the BJP’s prime ministerial candidate, can he actually pull off a victory and occupy South Block? Or will the Congress gambit pay off?


(Nag is currently resident editor, Times of India, Hyderabad, and was chief of bureau in Ahmedabad during the riots.)

 

Gujarat-Sweet Deals Are Made Of Gas # Narendramodi #mustread


A dubious company registered in Barbados will enjoy a windfall of Rs 20,000 crore at the cost of Gujarat taxpayers thanks to an agreement inked under Modi’s watch

An Investigation By Ashish Khetan, Tehelka, Nov 29,2012

CORRUPTION AND cronyism in the allocation of natural resources have been dominating the national discourse for more than two years. The giving away of precious 2G spectrum and coalmines by the Congress-led UPA regime has triggered anti-graft movements and invited unprecedented scrutiny from institutions such as the CAG, the Supreme Court and the media. But in the heat and dust of accusatory politics and competitive journalism, there is one shady deal involving a precious natural resource worth billions of dollars that has escaped public scrutiny. The deal involves the Narendra Modi government and a dubious company incorporated in the Caribbean island of Barbados.


In perhaps what would qualify as one of the most scandalous contracts ever signed, the Modi regime gave away a 10 percent participating stake in an expansive gas field it had won in a bidding process to a company named GeoGlobal Resources that existed only on paper. The company, incorporated in Barbados, had a capital of just $64.

The deal was inked in March 2003, when the BJP was in power both at the state and the Centre. Shockingly, the Barbados-based company didn’t pay a single cent for its stake. Even the company’s 10 percent share to the cost of exploration was borne by a state PSU, the Gujarat State Petroleum Corporation (GSPC). Within days of signing the contract with the Gujarat PSU, GeoGlobal parked 50 percent of its stake in the KG Basin to another shell company in Mauritius.

The Gujarat government has justified this sweetened deal on the sole ground that GeoGlobal was a technical expert and had helped the government in preparing the geological model for gas exploration. But in its latest report, the CAG has pointed out that GeoGlobal’s technical assistance has been so deficient that GSPC had to hire another technical expert to revise the geological model from scratch. The revised technical advisory work cost the government just Rs 2.64 crore. While for the same work, it had given GeoGlobal a permanent stake of 10 percent worth millions of dollars.

On 27 March 2002, the GSPC formed a consortium with GeoGlobal Resources India Inc and an Indian company named Jubilant Enpro Pvt Ltd. GeoGlobal was incorporated only six days before the formation of the consortium and was effectively controlled by a single person named Jean Paul Roy, a resident of Guatemala. The consortium was formed to bid for a gas block measuring approximately 4,57,000 acres in the Krishna-Godavari Basin off the east coast of India under the National Exploration Licensing Policy III framed by the BJP-led NDA government.

THE STORY AT A GLANCE
01. The Modi regime gave 10 percent stake in a KG Basin gas field to GeoGlobal Resources, a company only on paper, incorporated in Barbados02. GeoGlobal, a one-man firm controlled by Jean Paul Roy, was formed just six days before the JV with GSPC, and was incorporated with a capital of just $64

03. GeoGlobal was picked as JV partner in a whimsical and arbitrary manner. No tendering procedure or transparent methods were adopted in selecting the company for the project

04. The worth of 10 percent stake could run into millions of dollars with total gas reserve in the field expected to be between 2 and 20 trillion cubic feet

05. GSPC also gave GeoGlobal a carried interest, as per which its 10 percent share towards capital and operational cost was borne by the state PSU

06. GeoGlobal’s work was so deficient that GSPC had to hire another technical expert, for which it was paid Rs 2.64 crore. A job for which GeoGlobal got a stake worth millions of dollars

07. So far, GSPC has spent in excess of Rs 20,000 crore in drilling and exploration costs. GeoGlobal’s share of Rs 2,000 crore towards expenditure cost has been borne by GSPC

08. Within days of signing the contract, Roy transferred 50 percent of his share in the KG Basin deal to a dubious entity incorporated in Mauritius

09. The nominal value of each share of GeoGlobal at the time of incorporation was $0.001. In January 2006, the shares hit a high of $14.92 per share

10. The 15,000-time appreciation in the share price was achieved on the strength of the sweetened KG Basin deal

11. The commercial operations in the KG Basin offshore block would commence from July 2013. GSPC is expected to drill 11 deepwater wells

At the time of bidding, the Gujarat government claimed that the gas field, designated as Block KG — OSN — 2001/3, had over 45 trillion cubic feet of recoverable gas. As per the Modi government’s own estimates, the gas field was worth about $20 billion.

The absurdity of the deal could be gauged from the fact that the Modi government gave away 10 percent stake, which in its own eyes was worth millions of dollars to GeoGlobal on the ground that the company had international experience and a proven track record in the oil and gas exploration field. On the other hand, in its disclosures before the US authorities, GeoGlobal told its shareholders that the company had no exploration experience before venturing into India and the GSPC-led joint venture was its first foray in the oil and gas exploration business.

TEHELKA’s investigation shows that the company was fully controlled by Jean Paul Roy, who is a geologist by profession and had worked with various oil companies as a geological expert before forming this company. After entering into a joint venture with GSPC, Roy used this deal to showcase his credentials as the head of a corporation and entered into nine more contracts with the Government of India, a majority of which were signed when the NDA regime was in power.

“We are in the early stage of developing our operations. We have a very limited operating history and we have realised very limited revenues from our activities. Our activities in the oil and natural gas exploration and production industry have primarily involved entering into 10 Production Sharing Contracts (PSCs) with the Government of India,” reads a company quarterly report for the period ending 30 June 2012.

Shockingly, GSPC also agreed to contribute GeoGlobal’s share of 10 percent to the venture fund set up for the exploration activities and the same was to be recovered only after the joint venture starts earning revenues from the sale of gas.

Reportedly, GSPC has so far spent around $3.069 billion towards exploration costs. GeoGlobal should have contributed $306.9 million out of the total cost. But it is the taxpayers of Gujarat who have been made to fund GeoGlobal’s share of expenditure.

By virtue of this agreement, it’s the taxpayers who have been made to finance GeoGlobal’s activities, while the company has walked away with a 10 percent Participating Interest in the gas field, a national wealth.

Soon after the deal was signed, Roy made a string of questionable share transactions by which he transferred half of GeoGlobal’s 10 percent stake in a company he incorporated in Mauritius. The contract between GeoGlobal and GSPC was signed in March 2003. In the same month, GeoGlobal entered into a “Participating Interest Agreement” with Roy Group (Mauritius) Inc, a corporate entity fully controlled by Roy, by which the company assigned 50 percent of the benefits and obligations of the production-sharing contract pertaining to the KG offshore block, i.e., 5 percent of its participating interest, to this newly incorporated entity in Mauritius. This transfer of 50 percent of its stake by GeoGlobal within days of inking the deal with GSPC raises serious questions about its motives and the mala fide of the entire deal.

After around five months, GeoGlobal effected a reverse takeover of a US company named Suite101.com. By this deal, all outstanding capital stock of GeoGlobal was exchanged for 34 million shares of Suite101.com. In addition, Roy was paid $2 million. As per the deal, 14.5 million shares of Suite101.com were delivered to Roy and the remaining 19.5 million shares were held in escrow to be released on the occurrence of certain events related to the KG Basin offshore exploration. On 2 February 2004, Suite101.com changed its name to GeoGlobal Resources Inc. The nominal value of the shares of GeoGlobal was one-tenth of a US cent ($0.001). But within a few years, in January 2006, the shares reached a trading rate of $14.92. In other words, there was a 15,000-time appreciation in the share value, which was primarily on the strength of the sweetened KG block deal.

The joint venture between GSPC and GeoGlobal raises serious questions about the management of natural resources, in general, and the production-sharing contracts signed between private parties and the Government of India in the oil and gas sector, in particular. Sources at the Directorate General of Hydrocarbons (DGH) told TEHELKA that GSPC would start gas production by July 2013 and it is scheduled to drill 11 deepwater wells. As of today, the DGH reckons that the gas discovered so far is about 2 trillion cubic feet, which would be worth more than $1 billion. However, DGH sources added that it was possible that the company could discover more gas in the future.

TEHELKA sent detailed questionnaires to both the Gujarat government and GeoGlobal, and waited for more than 10 days for their response. Despite repeated reminders, both the parties failed to respond.

The so-called technical expertise provided by GeoGlobal and its promoter Roy has now been described as sub-standard, misleading and deficient by the CAG. According to sources, beyond the 10 percent stake, GSPC also paid hefty consultation fees to Roy for his technical assistance. TEHELKA could not get a confirmation or denial of the same by any of the parties concerned.

Geoglobal prepared an erroneous and deficient Geological model, says the CAG

IN APRIL, the CAG tabled a report on state PSUs in the Gujarat Assembly where it made a series of damning observations on the structure and the implementation of the joint venture between GSPC and GeoGlobal. However, unlike the CAG’s reports on 2G and coalmines, the audit body’s report on GSPC and its joint venture with GeoGlobal has gone unnoticed.

“Though the services of a technical expert could be measured and determined in monetary terms, the company admitted GeoGlobal Resources with 10 percent Participating Interest without any basis,” the CAG noted. The audit body also observed that GeoGlobal submitted a deficient and erroneous geological model, which not only delayed the exploration activities, but also led to a steep escalation of costs. The technical model prepared by GeoGlobal was so deficient, the CAG observed, that GSPC had to hire another technical expert viz, Petrotel USA, at a cost of Rs 2.64 crore. “The geological model of GeoGlobal had failed in respect of well depth estimate, its location and exploration cost estimates. Hence, Petrotel was engaged to thoroughly revise GeoGlobal’s geological model,” says the report.

After entering into a JV with GSPC, Jean Paul Roy used this deal to enter into nine more contracts with the Government of India, a majority of which were signed when the NDA was in power

The question that arises is that if the preparation of a new geological model, which has also yielded results, costs just Rs 2.64 crore, why did the Gujarat government give away a 10 percent permanent stake to GeoGlobal for the same kind of work — though it has proven to be deficient and faulty?

In its defence, the Gujarat government told the CAG that, “Mr Jean Paul Roy of GGR, being a technical expert in the field, was admitted as a joint-venture partner for the block. He would not have agreed to solely carry out a technical evaluation of the block for bidding without being offered a Participating Interest in the block” (GSPC’s reply as paraphrased in the CAG report).

But the CAG has rejected GSPC’s contention. “The reply is not tenable. The company’s contention that Mr Roy would not have agreed to carry out the technical evaluation without a Participating Interest being offered to him was an invalid apprehension not supported by any documents.”

GSPC’s reply also admits the fact that an individual geologist was passed off as a company for the purpose of forming a consortium and participating in the bid.

TEHELKA spoke with many retired ONGC, GAIL and DGH officials. Though none of them agreed to speak on record, they all agreed that natural resources need to be explored and utilised in a more transparent and just manner. They also raised questions on the pre-bid qualification process.

“The joint venture between GSPC and GeoGlobal should have failed at the pre-bid stage itself,” says an industry insider. “There is a difference between a company with years of experience, proven track record and a team of experts as its employees, and an individual geologist. It defies logic why GSPC should tie up with a shady company for such a difficult and complex deepwater exploration work.”

There is not much information available on Jean Paul Roy in the public domain except his Linkedin profile, which describes him as a geologist with “excess of 28 years of geological and geophysical experience in basins worldwide. Since 1981, he has held geophysical positions with Niko Resources, Gujarat State Petroleum Corporation, Reliance Industries, Cubacan Exploration, Petro-Canada, GEDCO, Eurocan USA and British Petroleum”.

GSPC manipulated the bidding cost to win the KG block, says the CAG

THE CAG report has slammed GSPC for deliberately underestimating the cost of exploration to qualify for the bid. The total net worth of the consortium between GSPC, GeoGlobal and Jubilant was $60.5 million. The consortium submitted that the estimated cost of drilling during Phase 1 would be $59.23 million.

The CAG’s Problems with the Gas Deal
THOUGH the services of a technical expert could be measured in monetary terms, GeoGlobal was given 10 percent stake without any basisGEOGLOBAL’S geological model had failed with respect to well depth estimate, its location and exploration cost estimates

THE TECHNICAL MODEL prepared by GeoGlobal was so deficient that GSPC had to hire another technical expert at a cost of Rs 2.64 crore

GSPC’S CONTENTION that GeoGlobal would not have agreed to do the technical evaluation without a stake that was not supported by any documents

GSPC MANIPULATED the cost of exploration and underestimated the cost of hiring a rig at the time of bid submission

GSPC HAS SUFFERED a loss of interest running into hundreds of crores of rupees by agreeing to contribute GeoGlobal’s share of 10 percent to the venture fund

“We observed that the estimated cost of Phase 1 was worked out on the lower side and if the cost of hiring rig and associated services that prevailed at the time of submission of bid was considered realistically, the estimated cost would have been $169.270 million, i.e., almost three times of the cost projected,” the report said.

GSPC deliberately kept the estimated cost less than its net worth so that it qualified the pre-bid stage.

So far, the state PSU has spent $3.069 billion towards exploration costs, more than 60 times of its estimate given at the time of bidding. By deliberately underplaying the cost of bidding and keeping it at an unrealistically low level, GSPC could justify its joint venture with a nonentity like GeoGlobal.

TEHELKA was told by a senior Gujarat IAS officer (now retired), who at one point was involved with the affairs of GSPC, that sometime in 2006-07, the government realised that the deal was scandalous and could be a source of embarrassment for the government. To correct things retrospectively, GSPC wrote to GeoGlobal and asked it to contribute towards the escalating exploration costs.

GSPC contended that the excess amount spent towards exploration costs was not within the terms of the Carried Interest Agreement, as per which GSPC had agreed to spend GeoGlobal’s share of 10 percent towards the project costs and recover the same from the company only after the commencement of commercial operations. But GeoGlobal has refused to pay anything to GSPC citing the contract.

“We estimate that the amount of GSPC’s claim as of 30 June 2012 to be approximately $306.9 million plus interest, of which 50 percent is for the account of Roy Group (Mauritius) Inc,” GeoGlobal has disclosed in its latest shareholders report.

In another report, GeoGlobal has stated its legal counsels have advised it that it was not liable to pay any amount to GSPC. “We have advised GSPC that it has no right to seek the payment and that we believe the payment GSPC is seeking is in breach of the Carried Interest Agreement,” says one of GeoGlobal’s quarterly reports filed before the US Securities and Exchange Commission.

In effect, GeoGlobal has walked away with a substantial stake in the KG Basin offshore block without investing a dime and without making any meaningful technical contribution.

Ashish Khetan is Editor, Investigations with Tehelka.
ashish.khetan@tehelka.com