Old-time Rolta director former Lt.Gen Parnaik appointed Governor of Arunachal Pradesh
- Rommel Rodrigues
- Feb 13, 2023
MUMBAI: In the latest round of gubernatorial reshuffle announced on Sunday (February 12), twelve states and the Union Territory of Ladakh were assigned new Governors by the central government.
Half among them were transfers from one state to the other, while the other half were new faces, first-time appointments among whom the announcement of Justice (Retd.) S Abdul Nazeer as the governor of Andhra Pradesh came under criticism by the opposition including the Congress Party and the Trinamool Congress.
Congress general secretary Jairam Ramesh tagged a tweeted video of late BJP leader, Arun Jaitley with the title, "Pre-retirement judgments are influenced by post-retirement jobs," and tweeted, "Adequate proof of this in the past 3-4 years for sure."
The TMC said that after former CJI, Ranjan Gogoi’s nomination as a Rajya Sabha member, soon after his retirement this was yet another example of how quickly key appointments are done post post-retirement from the judiciary.
The controversy around former Justice Nazeer who retired quite recently from the Supreme Court on January 4 stemmed from the fact that he was part of the Constitution bench that passed the verdict in the Ayodhya land dispute case, allowing the construction of a Ram temple at the disputed site of Babri Masjid and politically sensitive cases like the triple talaq and demonetisation.
However considering his post-retirement engagements, the one among the lot of appointments, it looks evident that the appointment of Lt Gen (retired) Kaiwalya Trivikram Parnaik, as the Governor of Arunachal was morally unwarranted. It also seems that the agencies which do the mandatory screening and clearing before appointments to important constitutional posts were lacklustre for some reason. And here are the reasons why.
Former Lt.Gen Parnaik is known as a fine gentleman who had an illustrious career as a decorated officer commissioned into the Rajputana Rifles in 1972 and served in the Army for 41 years. He was the Northern Army Commander for about two and a half years before retiring in 2013.
Sometime after his retirement, Parnaik joined an information technology group called Rolta and become executive director in most of their group companies and according to the latest master data on the Ministry of Corporate Affairs (MCA) he continues to be a director on those boards even as his appointment as the governor has been cleared.
According to MCA data, Parnaik, with the Directors Identification Number (DIN) number 07129253 joined the boards of Rolta Thales Ltd on 20 March 2015, Rolta Defence and Security Systems Ltd and Rolta Defence Technology Systems Pvt Ltd on 26 November 2015, Rolta Bi & Big Data Analytics Pvt Ltd on 14 January 2016 and of Rolta India Ltd on 30 May 2016. Rolta India Ltd (RIL) was the flagship company of the group while the rest were subsidiaries. Old annual reports show he held senior managerial positions of joint managing director on the boards of Rolta companies.
RIL which had migrated from a variety of software sales and services in the last decade ventured into geospatial software and geographic information system (GIS) for capturing and analysing data related to positions on the earth's surface and entered the defence business in a big way. In the era of the post-Kargil war of 1999, it claimed in several of its media and investor interactions that it's GIS solutions were globally worth billions in revenues.
This endeavour of the group was spearheaded by Parnaik who got in several hundred former defence staff to join the group. The company which once had bustling premises that housed three large IT buildings under a complex called Rolta Technology Park, situated in the MIDC area of Mumbai, which has now been ripped off into a scrapyard (Click to read: Rolta India strips off its key assets, turns tech complex into a scrap yard) had ex-defence staff moving all around. The complex also had several military-grade vehicles permanently parked inside the complex.
As the senior board member and joint managing director, Parnaik was naturally the key man for defence-related projects of the government. The defence administration of the country under the erstwhile Congress-led UPA government was considering investing big time into technology for the wings of the armed forces.
Considering it was a niche area RIL of GIS and geospatial services Rolta created a separate business division for defence and went under a recruitment spree hiring hundreds of retired colonels and brigadiers and other consultants.
At that stage, the company formed a consortium with Bharat Electronics Ltd (BEL) a Navratna PSU as a development agency for the ambitious defence project of the battlefield management system (BMS) which was to be worth more than Rs 50,000 crore and was assured that it was the top contender.
Envisaging huge returns from the defence business, RIL started borrowing heavily, first from the bond market through its international subsidiaries and then from banks and domestic institutions. However, with the change of regime at the centre, the defence project was junked, taking with it the company's humongous growth targets that it had built up over the years. Without a future outlook, the company collapsed like a pack of cards. That was the beginning of the downfall.
During its borrowing times, RIL and all the group company's board approved huge borrowings which till the fall of the company burgeoned more than Rs 10,000 crores. There were direct borrowings from Indian banks, institutions, foreign funds and bonds in the US markets. And Parnaik was on the board of all these companies through these funds mobilisation. An expert in company affairs said, "It's perplexing why a man who was formerly holding such high office in the military was party to such erratic mindless borrowings and then preferred to remain on the board while the entity went into default."
With a slowing enterprise business and sunken investments in the defence project, RIL tried to capitalise on some of its core software products and proprietary IP businesses by trying to sell them out. But the board became greedy and expected a very high value for the sale due to which several global players backed out.
A team member of the legal consultant to some of the deals said, "Initially we tried to convince the board that whatever some foreign giants were offering him was a very good price but they were greedy for more, finally everyone left, later we heard that some Indian IT majors were ready to give some pittance for whatever was left, but when they did the due diligence they realised it was worthless, they also exited quickly."
By early 2018 it became clear that the company was heading toward being a dead and bankrupt company, it defaulted on its loan dues, stopped paying salaries and finally began massive retrenchments. Hundreds of former defence staff who had been lured by a lucrative corporate career were dropped like the empty shells they would have seen during their defence career. Lt.Gen Parnaik, however, was brave enough to weather all this and he continues to be on the board of all these companies and remains to date.
Banks and institutions desperate to safeguard their funding and former employees for recoveries of dues took the company to the law board, the National Company Law Tribunal (NCLT) and some petitions were successful with NCLT ordering the insolvency proceedings against RIL, however, the promoters tried and legally scuttled all those attempts. (Click to read: How Rolta's creditors were stonewalled against insolvency proceedings)
Recently the NCLT in the appeal of Union Bank of India has ordered insolvency proceedings against RIL and various creditors have claimed dues worth over Rs 8,000 crores. Leading the pack are Indian PSU Banks including Bank of Baroda, Bank of India, Canara Bank, Central Bank of India, and Union Bank of India which are secured financial creditors have a huge claim of unpaid loans to the tune of Rs 6,451 crores. Interestingly the promoters have also claimed Rs 634 crores as part of secured financial creditors. The interim resolution professional has till today not admitted this claim. Naturally, they are pretty much aware of how the directors of Rolta are experts in manipulating and fudging the balance sheets over time and this could be a doubtful claim.
Former employees have not been paid their dues, including salaries, Provident Funds, Gratuity etc and the 513 employees of Rolta have claimed that they have dues amounting to Rs 125 crores. Several of them lamented that although they have staked claims but knowing that the directors and promoters have stipped off the company of everything there may be virtually zero value for any asset and they fear they would hardly get any of their dues in the insolvency.
The central government has also said that Rolta owes them unpaid taxes to the tune of Rs 50 crores. The Sales Tax has claimed Rs 13.38 crores, Income Tax TDS has claimed unpaid taxes of Rs 20 crores (this also includes TDS deducted from employees but not paid to the government), the Professional Tax officer has claimed unpaid due of Rs 67.50 lakhs and the Ministry of Commerce through the commissioner of SEEPZ-SEZ has claimed unpaid amount of Rs 16.33 crores to the central government. How come even this transgression in a firm where Parnaik was a director escaped the scrutiny of the central intelligence agency clearing the file?
Then there are two China-originated fund house, namely Pinpoint Multi-Strategy Master Fun and Value Partners Greater China High Yield Income Fund, which has claimed unpaid due of Rs 869 crores and 819 crores respectively that they had lent to Rolta.
With several dozen vendors including suppliers, advertising agencies, stationery suppliers, and registers to the company, the stock exchanges have raised claims to the tune of Rs 700 crores.
In the meantime, for the past two years, RIL has been repeatedly saying in all its communications that it plans to come out of the debt trap by 'repayment and restructuring its liabilities' under a Definitive Restructuring Services Agreement (RSA) with the 'Streamcast Group' which it signed on August 6, 2019.
The whole business with the 'Streamcast Group' as per one of our reports (Click to read: Rolta India's ruse with NCLT and the 'Streamcast' hoax) was never going to happen. The whole thing is turning out to be one of the biggest corporate ‘Hoaxes’ pulled up by the promoters of the so-called 'Streamcast Group' on which the distressed creditors of RIL had pinned their hope on. It was evident that the promoters of RIL willing devised a bogus plan to fool the creditors, employees, bankers and the government. (Click to read: The 'Streamcast Group' scam and Rolta: Was it deceitful collusion?) Some formers consultants in the defence team of Rolta say that this could have been done to buy some time as the company led by Parnaik was trying very hard to get some payment due from the military for some products and services deployed in the past.
This hoax of the Streamcast Group and its only chief promoter going around economic fraud around the world is another entity that the central intelligence agency needs to be immediately probed into. (Click to read: 'Streamcast Group' its promoters, history in Malta and affairs in India)
Thus in the whole above context in regards to Parnaik being appointed to the highest constitutional office of a state the question of propriety demanded that such an appointment was minutely scrutinized by the agencies that cleared the recommendation for the same. Parnaik also gracefully continues with the Linkedin profiling of being employed as the Joint MD at Rolta India Ltd.
Rommel is our Editor. He has close to three decades of experience in leading publishing houses including, Fortune India, Observer of Business & Politics, The New Indian Express etc.View Reporter News