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The Nitin Gadkari interview

Last updated on: October 24, 2012 16:08 IST

'You need credibility like Nitin Gadkari's'

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Will BJP President Nitin Gadkari be able to answer the questions that Arvind Kejriwal has raised about his company, Purti Sugar & Power Ltd?

Read on, to find out what Gadkari has to say about Purti, and Arvind Kejriwal, in this exclusive interview with NDTV Editor Sreenivasan Jain. Reproduced with kind courtesy NDTV Profit.

BJP President Nitin Gadkari, whose credibility is under the scanner, defends himself against the charges levelled against him, in a conversation with NDTV Editor Sreenivasan Jain.

Sreenivasan Jain: A number of questions have been raised about the financing of Nitin Gadkari's Purti Group, which is into power, sugar, ethanol and so on.

The first charge is that the Purti Group is financed by shell companies.

The second charge is that Gadkari gave favours to a major roadways contractor called Ideal Road Builders when he was Maharashtra's PWD minister between 1995 and 1999. This company repaid the favour by investing in Gadkari's Purti Group (by buying shares) shortly after he demitted office.

The questions being raised is -- are these investments and these loans that the IRB has given to Gadkari tantamount to a quid pro quo?

Others are asking even if there is no quid pro quo, does it amount to a conflict of interest?

Before we go in to all of this, let's first just understand what exactly the Purti Group is.

My colleague Miloni Bhatt, who has been tracking the story very closely and who has done her own independent investigation, joins us. Miloni first takes us through the nature of this company, the Purti Group.

Gadkari often says he is a social entrepreneur, but is this actually a business company with a scope and a footprint much beyond that?

Miloni Bhatt (chief correspondent, Mumbai, NDTV): That is the big question... whether the Purti Group is a business or a charity?

Nitin Gadkari set up the Purti Group in 2001. The full name is Purti Sugar & Power Ltd. It is one of Vidarbha's largest business groups, so it has a very strong presence in Maharashtra and especially Vidarbha.

It deals in power, ethanol, alcohol and bio-diesel.

Purti is a Rs 300 crore (Rs 3 billion) company. It employs 2,000 people. It has eight major companies. So, clearly, Purti has a wide range of business interests and it has lots of subsidiary companies taking care of these businesses.

Sreenivasan Jain: As Gadkari set up this company, he obviously required financing for it. His own balance sheet shows that a big bulk of this financing came from cooperative banks and other institutionalised financial investors.

But there also was a financing component which came from other sources and they, in fact, control the majority shareholding pattern today in the Purti Group. And that is where the questions have arisen.

Miloni, take us through that.

Interview courtesy: NDTV Profit

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Image: BJP President Nitin Gadkari gets a warm welcome at the National Convention on e-Governance.
Photographs: Arun Patil

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'In any company there are many stakeholders'

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Miloni Bhatt: Who are these investors, these real owners of the Purti Group?

Now, from the documents that Purti itself has posted on the website of the registrar of companies, it says its total share capital is Rs 68 crore (Rs 680 million).

What we found in its own documents is that almost Rs 60 crore (Rs 600 million) of that amount has come from 18 companies. Those are the 18 companies that actually control Purti.

Gadkari ironically owns only about 200 shares. So nearly 80 per cent of the shares are held by these 18 companies.

Who are these companies? The names that came up, which are listed on the RoC website, are Swiftsol, Earnwell, Leverage Fintrade, etc. They own a major chunk.

Swiftsol and Earnwell alone own about Rs 4.5 crore (Rs 450 million) worth of shares in Purti Power & Sugar Ltd.

Sreenivasan Jain: That's the first question to you Mr Gadkari, that your company is actually owned just by about 18 companies. You only own 200 shares in the Purti Group. So who are these companies who have put in all this money?

Nitin Gadkari: In any company, like in NDTV, there are many stakeholders.

Sreenivasan Jain: Who are your stakeholders?

Nitin Gadkari: As far as the law is concerned, I have the right to purchase the shares of your company.

Basically, when we started this project for a sugar factory, we had to increase the capital.

The company was very interested to work in the interest of the farmers. The farmers' purchasing power had collapsed so they were not in a position...

Interview courtesy: NDTV Profit

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Image: Gadkari and Gujarat Chief Minister Narendra Modi exchange a warm hug.
Photographs: Rediff Archives

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'Purti has not taken any help from the government'

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Sreenivasan Jain: These companies have names like Spatial Dealers Pvt Ltd, Swiftsol Pvt Ltd, Sterlight Fincom Pvt Ltd...

Nitin Gadkari: If you want to decide something and just paste on me...

Sreenivasan Jain: Go ahead...

Nitin Gadkari: First of all, any company can buy shares of any company. Any individual can purchase any (amount of) shares from any company.

Basically, there are 10,000 farmers who are the members of Purti.

Now, on that equity, it was difficult to get a loan, so we approached many people from society -- industrialists, traders, businessmen, investors.... We assured some of them 12 per cent returns.

Some NRIs were also there. After taking their equity in it, we made it like that.

Sreenivasan Jain: Can you give us the identities of these companies because it's not clear and that is the allegation being made by your political opponents?

Nitin Gadkari: First of all, neither has this company taken any help from the government nor any land from the government.

Sreenivasan Jain: Again, Mr Gadkari, with respect, you are not answering my question about the identity of these companies.

Nitin Gadkari: I can give the identity. I know many of the investors. If there is any problem... Already, the income tax department has scrutinised it. If anyone (else) wants to make an enquiry, there is no problem.

Sreenivasan Jain: We exactly did that. We sent out our teams to many of these companies, to the addresses that they had themselves registered on the MCA website and this is what we found (shows reporters visiting the offices of the shell companies which establishes that none of the companies exist at the given addresses.)

Interview courtesy: NDTV Profit

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Image: BJP leaders Sushma Swaraj, LK Advani, Gadkari and Arun Jaitley.
Photographs: Arun Patil

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'I am not supposed to give you everybody's details'

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Sreenivasan Jain: Mr Gadkari, this is the reality on the ground. All the companies which are registered owners of the Purti Group -- when we went to check on a majority of them, we found none of those addresses even exist.

Nitin Gadkari: A lot of companies have changed their addresses. If there is any problem, we are ready. Purti is ready for any enquiry.

Sreenivasan Jain: But, sir, many of those people have been at the same address for more than 20 years?

Nitin Gadkari: These are not the companies owned by my group. These are independent companies.

They have their shareholdings and they are registered companies from 1995. If you want to verify (it), the income tax department can verify it. We are ready for that.

Sreenivasan Jain: Of Purti's Rs 68 crore (Rs 680 million) paid up capital, these companies control Rs 60 crore (Rs 600 million), so they own your company?

Nitin Gadkari: I again tell you, the latest position is different.

Sreenivasan Jain: This investigation was done in the past two days.

Nitin Gadkari: I am not supposed to know the names of the 10,000 shareholders. I don't know everybody's details.

I am not supposed to give you everybody's details. And you are not the chartered accountant asking me the details of every shareholder.

Sreenivasan Jain: We would have thought as the chairman and founder of the company, you should know who owns your company.

Nitin Gadkari: Can you tell me what NDTV's shareholding list is?

Sreenivasan Jain: This is not about NDTV. Miloni, would you like to come in?

Interview courtesy: NDTV Profit

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Image: Gadkari gets a traditional Maharashtrian welcome.
Photographs: Arun Patil

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'There is a possibility the addresses have changed'

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Miloni Bhatt: Actually, (that is a) very important point there.

We were listening to Rashmi and Monideepa (in the package, establishing that none of these companies exist at the given addresses) and they are saying that the people at those addresses have been living there for 20 years.

Purti Group started in the year 2000. These people have been living there for two decades.

Now, surely, a point needs to be made that if these companies that existed, there would be some indication of them being there. For example, Swiftsol and Earnwell that Rashmi talked about together own Rs 4.75 crore (Rs 47.5 million) in your company.

Nitin Gadkari: The address may be changed. Now suppose X company...

Sreenivasan Jain: But these addresses are the latest addresses on the ministry of corporate affairs website.

Nitin Gadkari: Now, again, you verify. There are a lot of companies who are also known to me and there is possibility that the addresses are changed.

Sreenivasan Jain: The question being raised, and if I can just go across to (Congress leader) Digvijaya Singh who I spoke to earlier... He has made an allegation about all these different companies that have invested in Purti and this is what he had to say...

Digvijaya Singh: He has been collecting money and channelling his ill-gotten wealth through these shell companies.

Now it has to be closely examined, investigated (as to) which are these shell companies. I have come to know that there are four persons who are directors in all these shell companies, which have not done any business for years together.

What is required is a detailed investigation by the ministry of corporate affairs so that the facts can come out.

Sreenivasan Jain: Are you saying, Mr Singh, that you would like the corporate affairs ministry to investigate the Purti group? This is your government and your words will carry weight, so is that what you are trying to imply?

Digvijaya Singh: There are more than 50 companies at different levels. It needs a very detailed investigation. There is an organisation in the corporate ministry that does these fraudulent investigations... SIFO (Serious Fraud Investigation Office) or something like that... and it is a fit case to be handed over to them.

Interview courtesy: NDTV Profit

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Image: Gadkari garlands Chhatrapati Shivaji's statue.
Photographs: Arun Patil

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'I have not been a Purti director for last 14 months'

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Sreenivasan Jain: Mr Gadkari, respond to Digvijaya Singh's allegations. He says that you are fuelling ill-gotten wealth via these front companies.

Nitin Gadkari: Digvijaya Singh is making allegations for many days now. In Madhya Pradesh, some court has ordered a CBI enquiry against him. I am ready for any enquiry. I am open.

Sreenivasan Jain: You are open?

Nitin Gadkari: 100 per cent.

Sreenivasan Jain: You are open that these companies that own the Purti Group can be enquired (into) by any authority?

Nitin Gadkari: These companies do not belong to the Purti Group.

Sreenivasan Jain: I am saying the investors in the Purti Group.

Nitin Gadkari: We have 10,000 investors. I have got my latest affidavit, please keep it with you.

As per this affidavit, my total assets are Rs 12,37,91,000 (nearly Rs 12.38 crores). These are my assets.

In 2008, when I contested the elections, my assets were Rs 8 crores (Rs 80 million). That affidavit was also submitted to the Election Commission.

Now, this affidavit is dated September 10, 2012.

I have already given you the information that, because of this, I have resigned from the Purti Group. I have not been a director (with the Purti Group) for the last 14 months.

I am ready for any enquiry.

Interview courtesy: NDTV Profit

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Image: Gadkari with media-persons before Kejriwal's revelations.
Photographs: Rediff Archives

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'We are ready for any investigation'

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Sreenivasan Jain: Going back to what Digvijaya Singh said, that you will find that the same three or four people are directors of all the companies -- one Kawdu Pandurang Rade, Manohar Madhav Rao Panse, Nishant Vijay Agnihotri and one Sagar Kotwaliwale.

In all 18 companies, one mysteriously finds the same directors again and again?

Nitin Gadkari: This is not the situation.

Now, who are the directors, what are the companies... they can go for any investigation, we have no problem. That the company will explain.

You are expecting that I should explain the position of the company from my side.

We are ready for any investigation.

Sreenivasan Jain: The next point that is being raised in connection with the Purti Group is, did a major roadways contractor called Ideal Road Builders in any way benefit or invest in Purti Group and was that a quid pro quo?

Miloni, take us through what that allegation is.

Interview courtesy: NDTV Profit

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Image: Gadkari, Advani and Gopinath Munde with Shiv Sena leaders Uddhav Thackeray and Manohar Joshi.
Photographs: Arun Patil

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'I can accept your equity also'

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Miloni Bhatt: Let me just take a minute to explain to you what this is.

Nitin Gadkari was Maharashtra's PWD Minister from 1995 to 1999. During that period, Ideal Road Builders got six projects which were worth Rs 63 crore (Rs 630 million).

These were direct projects from the PWD ministry in the government of Maharashtra.

Ideal Road Builders' turnover rose from Rs 41 crore (Rs 410 million) to Rs 67 crore (Rs 670 million). If we look at its group company right now, which is IRB Infrastructure Developer's Ltd, their turnover is Rs 2857 crore (28.57 billion).

What is very interesting is that, in 1999, Gadkari demits office as PWD minister in the Maharashtra government.

In 2001, Gadkari starts the Purti Group and that is listed on his website. Ideal Road Builders immediately buys shares worth Rs 1.85 crore (Rs 18.5 million) in the Purti Group.

This is very interesting. Nitin Gadkari has just left office as PWD minister and has started a company and, almost immediately, there is an investor, which is Ideal Road Builders who buy shares of Rs 1.85 crore.

It increases its shareholding in Purti to Rs 2.8 crore (Rs 28 million).

Ideal Road Builders' founder, DP Mhaiskar, buys on an individual basis shares worth another Rs 2 crore (Rs 20 million) in Purti. So his total investment in Purti comes to Rs 4 crore (Rs 40 million).

Now, Ideal Road Builders alone own about 8 per cent of Purti Power & Sugar Ltd.

Sreenivasan Jain: The allegation being made by the Congress and your critics is that should a company that, under your time received certain contracts, have, the moment you demit office barely one year later, become an investor in your company? And is that a form of quid pro quo?

Nitin Gadkari: First of all, the cost of the six projects was Rs 66 crore (Rs 660 million) and they are BOT (build-operate-transfer) projects and you are arguing that, from that six period, they are giving me eight per cent equity.

Now, first of all, I have received the equity from the IRB.

I have no problem. I accept it.

Sreenivasan Jain: You are accepting it?

Nitin Gadkari: I have accepted that. Now I can accept your equity also. You are also free.

Interview courtesy: NDTV Profit

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Image: Brahmashree Gurvanand Maharaj blesses Gadkari.
Photographs: Raju Jagtap

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'My project was a social enterprise'

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Sreenivasan Jain: No, there is a difference. The difference is, I am not a road contractor.

Nitin Gadkari: Sreenivasan, as far as the law is concerned I can accept equity from the Congress, the BJP, Samajwadi, BSP, any leader... I can accept equity from a doctor, professor, lawyer, or anybody. And I can accept equity from any contractor, any businessman.

Sreenivasan Jain: Even though you were a public works department minister? As a former PWD minister, should you be taking equity from a roadways contractor? Isn't that a conflict of interest?

Nitin Gadkari: Not at all. Not at all. Have you got a single incident that I gave any project with any violation of laws there?

Sreenivasan Jain: That is the allegation Nawab Malik of the NCP is making. Over to you, Mr Malik.

Nawab Malik: He has introduced some new mechanism, pre-bidding scrutiny, that this bidder is eligible or not. At that time, he organised some people -- 4-5 contractors -- and he has distributed the work.

We can prove what we are saying on the floor of the house.

He said there is no syndicate. But, basically, there was a syndicate between the contractor and Mr Gadkari was the beneficiary.

Sreenivasan Jain: In terms of propriety, do you think that it's proper that you should be accepting investments of crores of rupees just after you demit office?

You demitted office in 1999. In 2000-01, you start your company. Straight away IRB picks up Rs 1.85 crore (worth of) shares.

Isn't there a question of propriety? Laxman rekha jisko kehte hain politics mein...

Nitin Gadkari: My project was a social enterprise.

Interview courtesy: NDTV Profit

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Image: Gadkari greets guests at the wedding of his son, Sarang.
Photographs: Rediff Archives
Tags: NDTV , BJP , NCP , PWD , IRB

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'What is your apprehension... that a contractor cannot have friendship with politician?'

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Sreenivasan Jain: What is your relation with IRB and Mhaiskar? You consider him a good friend?

Nitin Gadkari: Hundred per cent. I share a good relation with him. He is a contractor but that does not mean he cannot be a good friend for me? I don't hide anything.

Sreenivasan Jain: A PWD minister should be good friends with a contractor?

Nitin Gadkari: What is your apprehension... that a contractor cannot have friendship with politician? Is that your principle?

Sreenivasan Jain: Yes.

If you are taking policy decisions that benefit any particular company or industry, one should keep one arm's length. That is the general principle.

Nitin Gadkari: Sreenivasan, I had just completed the tenure of ministry. Now 12 years are over.

Sreenivasan Jain: But this investment happened in 2001, just two years after you left office.

Nitin Gadkari: I am thanking you that you are the first person who is creating a suspicion about my relationship with Mr Mhaiskar.

I have good relations with many contractors, many businessmen, many farmers, many political leaders, many ministers.

Sreenivasan Jain: Now, that was in 2001, when Ideal Road Builders invested in the Purti Group. But those investments and that financial support continued (till) as recently as just two years ago. For more details on that, back to Miloni.

Interview courtesy: NDTV Profit

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Image: Gadkari with Shiv Sena supremo Bal Thackeray.
Photographs: Arun Patil

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'Purti is in a loss of Rs 64 crore'

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Miloni Bhatt: The founder of Ideal Road Builders is DP Mhaiskar who, as Mr Gadkari has just said, is very good friends with him.

In 2009, the Ideal Road Builders' founder firm -- DP Mhaiskar's firm, Global Safety Vision -- loans Purti Rs 155 crore (Rs 1.55 billion).

Now, what does that do to Purti? This loan from Ideal Road Builders allows Purti to repay its debts. So it has wiped out the debts of the Purti Group.

Then, in 2009 -- what we see from the documents that Purti itself has posted on the site of the RoC interestingly enough -- Purti posts its first profit of Rs 20 crore (Rs 200 million). All this is in the documents that Purti Group has submitted to the RoC.

Interestingly, the documents that Global Safety Vision has submitted to the RoC -- remember, they have given out a loan of Rs 155 crore (Rs 1.55 billion) to Purti to repay its debts.... What is the paid up capital of Global Safety Vision? A very princely Rs 1 lakh (Rs 100,000).

Sreenivasan Jain: Here is a situation that a company called Global Safety Vision which has in its books, as far as 2009, only Rs 1 lakh as paid up capital, gives you a Rs 155 crore loan. This is a company that Mhaiskar has started. How would you explain that?

Nitin Gadkari: I want to explain it very nicely and you should understand it.

First of all, the present balance sheet and report which you can get, Purti is in a loss of Rs 64 crore (Rs 640 million). Purti was never in profit after differentiation and you can verify it.

Interview courtesy: NDTV Profit

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Image: Gadkari cuts a 55 kg cake on his 55th birthday.
Photographs: Rediff Archives

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'I already repaid Rs 64 crore with 14 per cent interest to Mhaiskar'

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Sreenivasan Jain: The point being made was that though you posted a net profit, you were still in net loss.

Nitin Gadkari: Yes. Now, no bank was ready to finance us.

So Mhaiskar, in the name of his company, had taken finance from a financial bank and they gave that loan to me with 14 per cent interest. And I already repaid the Rs 64 crore with 14 per cent interest to Mhaiskar.

Sreenivasan Jain: This company, would you have any idea where they got the money from? Because when we tried to contact Mhaiskar, and we tried to get an understanding from him (as to) why he would give a loan of that amount from his own company that barely has any money, we did not get a response.

Miloni, you tried to contact them and you got no response?

Miloni Bhatt: That is right.

We sent a detailed questionnaire to DP Mhaiskar not once but twice, and both the times we got no response from DP Mhaiskar.

We did receive a response from Virendra Mhaiskar, who owns IRB Infrastructure Developers Ltd.

DP Mhaiskar is part of another company called MEP. It is run by his younger son and DP Mhaiskar's office, who we have tried for three days, finally came back to us saying that DP Mhaiskar is not going to be responding to any of the allegations.

IRB Infrastructure Developers Pvt Ltd Response: 'Ideal Road Builders Pvt Ltd made an investment of Rs 1.85 crore in equity shares of Purti Sakhar Karkhana Ltd in 2001. At that time, investment in sugar factory in Vidarbha region was felt to yield promising return.'

So this is why they claim they have made the investment.

Interview courtesy: NDTV Profit

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Image: Gadkari greets his supporters.
Photographs: Arun Patil

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'That Kejriwal has made many allegations against me, not a single one is proven'

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Sreenivasan Jain: Mr Gadkari, your response.

Nitin Gadkari: First of all, Global (Safety Vision, DP Mhaiskar's firm) has taken the finance from a financial institution, giving their bank guarantee, their assets.

After that, they transferred that finance with 14 per cent interest to me.

I mortgaged my company property to their company.

Sreenivasan Jain: Why?

Nitin Gadkari: It is because of the relationship. It is a very clear thing.

Sreenivasan Jain: This is how close the relationship is that they just give you Rs 155 crore (Rs 1.55 billion) from a company that has a net worth of only Rs 1 lakh?

Nitin Gadkari: For this, you need credibility like Nitin Gadkari's.

Sreenivasan Jain: You are denying the allegations being made that these investments in your company are a form of quid pro quo?

Nitin Gadkari: Not at all.

Sreenivasan Jain: These are a form of kickbacks, are the allegations being made.

Nitin Gadkari: That allegation anyone can make. That Kejriwal has made many allegations against me, not a single one is proven.

Sreenivasan Jain: So you are denying that?

Nitin Gadkari: I am ready to face any enquiry. I have no problem for it.

Interview courtesy: NDTV Profit

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Image: Gadkari with Sushma Swaraj and Advani.
Photographs: Raj Patidar/Reuters

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'I am giving you the addresses of the 10,000 people who invested in Purti'

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Sreenivasan Jain: As we conclude, the question I raised at the beginning which has still not been comprehensively answered is, who does Purti belong to because the people who control the majority of your company have given addresses which don't exist?

Nitin Gadkari: The legal answer is the companies belong to the shareholders.

Sreenivasan Jain: But who are these shareholders, we don't know.

Nitin Gadkari: 10,000 shareholders -- the list is with you.

Sreenivasan Jain: In 10,000, the main 18 shareholders have given wrong addresses.

Nitin Gadkari: As far as the company law is concerned, anyone can purchase shares of any company. There is no prohibition for any contractor, lawyer or media-person to purchase shares of the company.

Sreenivasan Jain: So you are saying that those companies whose addresses we could not find are shareholders of your company.

Nitin Gadkari: The addresses have changed. You can get the address.

Sreenivasan Jain: You will give us the correct addresses of which those companies are?

Nitin Gadkari: I will again go to verify. The 10,000 addresses are there.

Sreenivasan Jain: No, only of those main 18 companies.

Nitin Gadkari: I am giving you the addresses of the 10,000 people.

Interview courtesy: NDTV Profit

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Image: Gadkari, Advani and other BJP leaders lead a protest against the inflation in food prices.
Photographs: Danish Siddiqui/Reuters

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'I am a reputed political leader'

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Sreenivasan Jain: Okay. You will give us the addresses.

Secondly, you say that you have no regrets about your relationship with Mhaiskar, your friendship with him? You feel that there is no conflict of interest between a friendship between you and someone who is a contractor?

Nitin Gadkari: Not at all.

I am a reputed political leader.

I have credibility in the market and I am the only politician in politics who has raised Rs 4000 crore (Rs 40 billion) from the capital market.

As far as taking equity (is concerned), equity is not a fraud. Equity is not corruption. Equity is a shareholding. Even I can accept shareholding from Sreenivasan Jain or NDTV if you are ready to give it to me.

Sreenivasan Jain: I wish I could afford it, but I can't. But you have no regrets of taking money from Mhaiskar?

Nitin Gadkari: As far as shares are concerned, the share values increase sometimes. It is business and people have right to invest anywhere in any company. So I have no regret for that.

Sreenivasan Jain: Thank you Mr Gadkari.

Interview courtesy: NDTV Profit


Image: Gadkari outside Mantralaya, Maharashtra's secretariat building.
Photographs: Arun Patil

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