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Communist Party of India has big stakes in private firms

So much for Socialism/Communism. I guess their double talk comes to the fore again, as  usual.

New Delhi: The Communist Party of India (CPI) claims it is dedicated to the spread of socialism (an economic system based on state ownership of capital), but its leaders have been merrily investing in private companies.

A scrutiny of I-T returns filed by CPI reveals functionaries have been regularly buying equity shares of at least eight private firms using party money.

The fact has been stated in the auditor’s report but has been overlooked by taxmen, perhaps because it does not directly concern them. Pune-based M/s PG Bhagwat Chartered Accountants has stated in its report that private equity shares worth lakhs of rupees have been purchased by CPI leaders. The auditor has, however, not named the leaders.

What raises suspicion is that two of the private firms — both based in Mumbai — have been shown to have shut shop.

I-T returns reveal CPI leaders bought equity shares worth Rs1,50,000 of Mayur Arts Pvt Ltd and worth Rs25,000 of Vanguard Publications Pvt Ltd.

The other companies of which CPI leaders have been shown to have purchased equity shares are People’s Publishing House Pvt Ltd (worth Rs22.93 lakh), New Delhi-based Navsahitya Printing and Publishing Co Pvt Ltd (Rs3.50 lakh), Kolkata-based Manisha Publications Pvt Ltd (Rs23,000), Nav Karnataka House Pvt Ltd (Rs5,000), Lok Vangmaya Griha Pvt Ltd (Rs8.10 lakh) and Navchetan Books Pvt Ltd (over Rs1 lakh).
There are other major discrepancies that have surprisingly escaped the notice of tax sleuths. The loss on account of closure of the two Mumbai firms has not been reflected in the balance sheet.

“If the auditors are stating that the firms have been closed, the investment made by the party is lost. Such investment cannot be shown in assets,” a tax expert said.

If this did not arouse suspicion of taxmen, the fact that the party does not possess equity share documents of three firms — Manisha Publishing, Navsahitya Printing and Publishing and Navchetan Books — should have.

People’s Publishing House, whose shares have been purchased by a CPI leader, has also been a beneficiary of the party’s generosity. CPI, whose net worth stayed between Rs5.08 crore (in 2001-02) and Rs6.12 crore (in 2005-06) and whose annual income did not exceed Rs1.22 crore in any of the five years, has disbursed Rs2.71 crore under “loans and advances” to the company.

The party also disbursed Rs50,000 to Navchetan Printing in 2003-04. The entry remains unchanged for the next two years, meaning there was no return of cash or kind from the publishing house.

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April 22, 2009 - Posted by | Current Affairs | , , ,

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