GOVERNMENT HIKES DUTY on GOLD to 6%

The government's move to hike the customs duty from 4 to 6 percent will have a loud impact on the Bullion sector. The hike sums up to around INR 60,000 (approx) per kilogram of gold. To be clear, with this duty hike a difference of 7 percent between the international and domestic price of the yellow metal is evident.

This may lead to rise illegal channels and malicious activities with respect to importing gold and related products like jewellery etc., in the country. In turn it will lead to an increase in unemployment among the skilled artisans of the country (around 1-2 million people depend on this sector to earn their livelihood) as well the businesses of local jewelers across the country. 

The government should harness the existing reserve of gold in our country rather than turning towards imports and implementing this alarming hike on customs duty. Also other opportunities for revenue generation, like increasing exports should be explored by the government of India. Hiking the duty on imports will in no way, curtail the demand, as the precious metal has always been regarded as one of the best investment options for social security.

My Defamation case against BBA!

On Wednesday, 16th Jan, 2013, 

I had invited media for a press conference at RSBL's office, wherein the agenda was to give the clarity on the recent events between RSBL and BBA.

 

                      Kindly note that, the following is a PRESS RELEASE handed over to media!

RSBL, Kothari file defamation case against Bombay Bullion Association

a.   It is not Mr. Prithviraj Kothari who is a member of the BBA but RiddiSiddhi Bullions Limited (RSBL) who is a member of the BBA (membership no 895). Mr. Prithviraj Kothari was the President of the BBA till his term as a President of BBA got over in September 2012.

b.   BBA’s allegations in the newspaper that Mr. Kothari was involved in a fraud are wrong, illegitimate and malicious. Mr. Kothari did not act in his personal capacity as a President but in a board meeting of the BBA in March 2011, the directors resolved to give the lower ground floor of the Bombay Bullion Exchange Refinery building on leave and license to M/s S.L. Industries, a firm which is into the minting of coins. Mr. Prithviraj Kothari was not a signatory to any of the documents concerning the lease. This fact can be confirmed from the leave & license agreement dated 29^th May, 2012 registered with the Sub-Registrar of Assurances, Mumbai on 05^th June, 2012. Since the floor was in a dilapidated condition since 60 years and due to maintenance and cleanliness of sewage lane, it took additional time for BBA to get it operational. Proper procedure was followed. Paper advertisements were given twice and on the basis of that, two firms had submitted their interest. S.L. Industries was finalized as it offered favorable terms to the association. Hence the following allegations are baseless:

i. That it was 3000 sq ft was wrong. It was only 780 sq ft built up. These details are mentioned in the agreement.

ii. Besides, the allegation that there was no royalty income to BBA was wrong. S.L. Industries was to pay BBA royalty of Re 1 on every gold coin and Rs 0.25 on every silver coin.

iii. That Mr. Kothari manipulated the minutes of meetings for giving undue advantage to his nephew is baseless since the premise was given on rent to a firm where one Mr. Shailesh Jain of S.L. Industries who is in the business of minting coins since 25 years, is the main partner. The board had resolved that the unused premise be given for a combination of rent and royalty. An extract of the same is attached. Further, a letter from the then serving Directors of BBA is also attached confirming their presence and approval of the said resolution.

iv. The idea behind setting up a minting facility was to enable member-jewelers inside the market to use the facility for minting of coins without commuting. Hence this would save time and money for the members at large and lesser risk. Please also note that in no way was RSBL to gain from this arrangement. To the contrary, it would become easy for other to mint coins and compete with RSBL. Various members had benefited from this service.

v.  S.L. Industries was to set up a minting facility and invest in the interiors. Also, S.L. Industries paid the full year rent in advance. The 60 year old dilapidated property was finally put to productive use.

vi.  A basement area of 780 sq ft given for a fixed rent of Rs 50000 plus royalty was market price. The arrangement didn’t last for long. The BBA, under the new president compelled S.L. Industries to vacate the premises and the latter did so with articles lying therein within less than forty eight hours. S.L. Industries have now filed proceedings in the civil court for restoration of possession and have claimed damages.

c.  The fact that BBA published photograph of Mr. Kothari (even though he is not a member of BBA) in various newspapers along with a press release accusing him of fraud, is a conspiracy and a ploy to defame RiddiSiddhi Bullions Limited and Mr. Prithviraj Kothari.

Series of Events:

December 2012

31^st Dec – BBA publishes ‘Notice’ in at least six news papers with a photograph of Mr. Prithviraj Kothari mentioning: “Mr. Prithviraj Kothari, Director of RiddiSiddhi Bullions Ltd. Membership No 895 has been expelled from the membership of the Association in terms of powers of the Board”.  Besides this, various newspapers and television channels cover this story related to the expulsion of Mr. Kothari. Important things to note: Though the expulsion is for RiddiSiddhi Bullions as a member of BBA, carrying the photograph of Mr. Kothari was with the intention to damage his reputation worldwide.

January 2013

3^rd Jan – RSBL sends a letter asking the BBA to give an extract of the resolution. RSBL tells BBA that the expulsion was illegal and illegitimate. RSBL demanded copies of various documents which were never produced by the BBA.

7^th Jan – The Bombay City Civil Court passed an order of injunction against The BBA, staying the resolution expelling RSBL and further restrained BBA, its president and its directors and office bearers from publishing any article in the media or any other manner in respect of the expulsion of RiddiSiddhi Bullions Limited/Mr. Prithviraj Kothari.

11^th Jan – RiddiSiddhi Bullions Limited sends notice to 17 parties including the Association, its president, vice-presidents and directors asking them to furnish apologies. The notice mentions that all the parties would be liable to pay damages to the extent of Rs 100 crores and also liable to be prosecuted and punished for having committed an offence of defamation under section 500 of the IPC for which RSBL/Mr. Kothari intend to adopt appropriate proceedings, criminal as well as civil in the Court of Law against them.

14^th Jan – BBA releases another press release through a leading English daily terming Mr. Kothari as a ‘criminal fraud’. This is a clear contempt of the court. All 17 parties will be sent notices for contempt of court.

For details regarding the 17 parties kindly refer the BBA website.