Thursday, March 28, 2013


J Gopikrishnan / New Delhi
March 18, 2013

Union Petroleum Minister M Veerappa Moily could be in the dock for raising funds for his family controlled trust from a corporate giant when he was Corporate Affairs Minister. Moily faces another serious case of conflict of interest as a top official of Reliance Industries is advisor to a company controlled by Moily’s son Harsha Moily. Even earlier, the Minister has faced charges of favouring Reliance in the KG basin case.

Veerappa Moily has been president of Kissan Sabha Trust (KST), which received huge funds from ITC from Corporate Social Responsibility (CSR) budget in September 2012. His son Harsha Moily’s email message to his partner Sudhir P clearly showed that Moily himself managed the fund from the ITC for his private trust.

“Sudhir — Dad just called and confirmed that ITC has approved the funding the operating expenses of KST (Kissan Sabha Trust) for the next five years. Therefore, for ITC to process the payments, we have to immediately furnish ITC all OpEx bills for Karkala & Chikaballarpur for the academic year 2011-12. Request you to do the needful,” said the email message, which was also forwarded to Moily’s official email vmoily@

The subject of the message was Capital Budget for Kissan Sabha Trust for Funding. The Kissan Sabha Trust is a family-controlled trust of Moily. It was established decades ago and is running educational institutes and charitable organisations in Karkala and Chikaballarpur in Karnataka. In addition to Moily, his wife Malathy, son Harsha and daughter Sushma too are members of the trust.

“The total capital cost for Karkala school comes to Rs.1.71 crore and for Chikkaballarpur school Rs.3.10 crore. Total capital cost comes to Rs.4.81 crore…. For operating the schools, our budget right now is Rs.50 lakh for this year and will increase with PUC students getting admitted. Hence we may ask for a corpus fund of Rs.6 crore to fund the day to day operations @ 8% per annum,” said an earlier email sent by Sudhir to Harsha Moily. The email messages between the duo talk about approaching the corporate sector for the requirements of the trust.

The person, Sudhir P, referred in this mail is Sudhir K Prabhu. He is also a Director in one of the companies run by Moily’s son  and the Karnataka branch head of a Mumbai-based Chartered Accountant’s firm, which audits companies of Harsha Moily.

The documents available with The Pioneer show that Harsha Moily is/was Promoter and Director of four companies, whose business flourished after Moily became Cabinet Minister in May 2009. The account of one of his companies shows an unsecured loan of Rs.6 crore from an unknown source. Moksha-Yug Access India Private Limited is one of the major companies run by Harsha.

The company which faced fund crunch after it was established way back in 2005, literally got “Moksha” after Veerappa Moily landed in Union Cabinet in 2009 as Law Minister, then moved to Corporate Affairs Minister with additional charge of Power, and finally shifted to the coveted Petroleum and Natural Gas portfolio.  
The Moksha-Yug Access (MYA), started as a supply chain company of rural products, is currently concentrating on milk supply. The company, which was floated by Harsha and his sister Hamsa, handles more than one lakh litre of milk supply every day.

And here comes the Reliance connection. The website of the company claims that one Mr Ananth Ravi, President of Reliance Industries, is their Advisor.

“Mr Ananth Ravi advises MYA on finance related matters. He has led the Project Finance team of Reliance in the financing of billion dollar projects in telecom, petroleum and retail sectors. He was also instrumental in setting up the Reliance’s telecom venture, Reliance Infocomm operations in Karnataka. He brings to MYA, his vast experience in project management and finance,” says the company’s website.

Around 50 per cent of this company’s shares are held by US and Mauritius-based funds, while Harsha owns around 20 per cent stakes. Well-known companies like Bharat Forge and Jubilant Agro are stakeholders or Directors Board of this company.

MYA Financial Services Private Limited, Rural Crystals Educational Services Private Limited and MVH Holdings are the other three companies where Harsha and Moily’s other family members are Directors.
Moily's son speaks out : 
Pioneer News Service / New Delhi March 20, 2013

While Moily maintained a stony silence over the exposé, his son Harsha Moily issued a clarification through a PR agency. He sought to claim that their family-controlled Kissan Sabha Trust (KST) “operates on low budget and expenditures were met from donations from public”.

“As a practice budget requirements are drawn to understand the funding requirements to run educational institutions for underprivileged poor and school dropouts. The estimation for a yearly operating expenditure was worked out at Rs.50 lakhs a year. A corpus to ensure yearly interest receipt was worked out at Rs.6 crores to yield Rs.50 lakhs at 8 per cent interest per annum. The estimation of creating a corpus is an accounting exercise. The Trust has not received any funding of Rs.6 crores. It has been granted Rs.42 lakhs to fund the operating expenditure for the year though the operating expenditure is higher and is met from donations from the public. The trust operates on a low budget and does not have any corpus or other assets,” an emailed statement on behalf Harsha Moily maintained.

Harsha admitted that Ananth Ravi, president of Reliance Industries, was an “Advisor” in his company Moksha-Yug Access India Private Ltd (MYA). However, Harsha claimed that Ravi “excused from the Advisory Board” since August 2012 and that he was his “mentor” from 1999. 

“It is important to note that MYA received funding from professional investors in 2008, much before my father joined the Government. MYA’s investors did due diligence on MYA through the most part of 2007, and the funding from VCs came through in March 2008,” he said, while reacting to this newspaper’s report that funds started flowing from 2009 when Veerappa Moily became the Union Cabinet Minister.

The fact remains that the The Pioneer report focussed on highlighting Veerappa Moily’s role as Union Corporate Affairs Minister in managing funds from the corporates for his family-controlled Trust. The newspaper never mentioned about the amount of funds received by KST from tobacco major ITC. It cited only the contents of the emails between Harsha and his partner Sudhir P to established Veerappa Moily’s direct involvement in the whole issue. The report mentioned about a transaction of Rs 6 crore, as unsecured loan in two tranches from unexplained sources, to Harsha’s another company called MVH Holdings.

“Sudhir - Dad just called and confirmed that ITC has approved the funding the operating expenses of KST (Kissan Sabha Trust) for the next five years. Therefore, for ITC to process the payments, we have to immediately furnish ITC all OpEx (Operational Expenses) bills for Karkala & Chikaballarpur for the academic year 2011-12. Request you to needful,” said the email message sent by Harsha to his partner.

The email was also marked to Veerappa Moily’s official email id at 1.09pm on September 21, 2012. The subject of the message was ‘Capital Budget for Kissan Sabha Trust for Funding’. Harsha didn’t contradict the facts as reported by The Pioneer and chose to maintain silence both on his father’s role.

No favour to corporates in lieu of funds for trust: Moily

Pioneer News Service / New Delhi  March 21, 2013

Breaking his silence over The Pioneer expose on his role in managing funds from ITC to his family-controlled Kissan Sabha Trust (KST), Petroleum Minister Veerappa Moily on Wednesday admitted that his Trust approached corporates “for noble purposes”. In a Press release, Moily claimed that he never extended any favour or help to any corporates for seeking financial assistance for the trust.

However, in his two-page statement, Moily chose to keep mum on the email communications between his son and partner over the funds from tobacco giant ITC. “Dad just called and confirmed that ITC has approved the funding for next 5 years…,” his son Harsha stated in his email to his partner and marked to Veerappa Moily also.

“The Trust accounts are maintained in a fair and transparent manner and the same is open for any scrutiny. However, in order to effectively work towards achieving its noble purpose, the Trust approaches Corporates who are promoting the social cause for the benefit of the people from the bottom of the pyramid.

“I would like to categorically state that there have been absolutely no occasion for me to extend any kind of favour or help to any corporates for seeking financial assistance for the Trust,” said Moily in the statement.

Moily said that he was “pained” to see that his son Harsha’s successful business ventures being condemned, merely since he “happens to be son of a political person”.

“It is also a matter of fact that Harsha has been successfully working towards social cause on the basis of his own conscience and without any political ambitions,” said Moily senior.