On March 12, 2018, as a part of his Rajya Sabha application as a Bharatiya Janata Party candidate, Rajeev Chandrasekhar submitted an intriguing affidavit listing his assets and sources of wealth to the Election Commission. The affidavit, a mandatory requirement for electoral aspirants, pegged the businessman-turned-politician’s annual income at Rs 28 crore and valued his family assets at Rs 65 crore.

According to the affidavit, Chandrasekhar held equity shares in six unlisted companies: Vectra Consultancy Services, SPL Infotech PTE, Jupiter Global Infrastructure, Minsk Developers, RC Stocks & Securities and Sanguine New Media.

Missing from the affidavit, however, was Jupiter Capital, the largest company controlled by Chandrasekhar.

Described on its website as an investment and financial services firm, it was set up by Chandrasekhar in 2005. In its first year, the company had four subsidiaries and an income of Rs 15.08 crore. Since then, it has grown rapidly. The company’s 2018 filings with the Ministry of Corporate Affairs report 58 subsidiaries – among them, media companies like Suvarna News, Asianet, Indigo 91.9 FM and Republic; technology firm Axiscades and defence firm Indian Aero Ventures.

Spanning technology, aerospace, media, music, entertainment, hospitality and infrastructure, Jupiter Capital’s subsidaries account for most of Chandrasekhar’s business activities and earnings. The company manages, as its website says, a portfolio of investments estimated at over $1 billion (Rs 7,100 crore). In March, 2018, it reported a consolidated gross income of Rs 1,026 crore.

In contrast, the companies listed by Chandrasekhar in his affidavit are much smaller. For the year ending on March 31, 2018, Vectra Consultancy Services reported an annual income of Rs 5.07 lakh. The other three companies, RC Stocks & Securities, Jupiter Global Infrastructure and Minsk Developers reported Rs 0 as annual income.

The reason why Jupiter Capital doesn’t feature in Chandrasekhar’s affidavit lies in how he has structured his companies.

An intervening layer of companies

Of the six companies listed in his affidavit, Chandrasekhar is a minority shareholder (1.25%) in Sanguine New Media – “Malavika Rajbans Sanghvi, daughter of Rajbans Khanna” and “Ramesh Raaj Sanghvi, son of Vir Sanghvi”, own 85% of this company. SPL Infotech is incorporated in Singapore. Its shareholding information is not available.

Chandrasekhar, however, controls the other four companies. He owns 99.97% of Vectra Consultancy Services, with his wife and mother holding the remaining 0.03%. This means the company is 100% owned by his family.

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Next, he owns 50.69% in Jupiter Global Infrastructure directly and another 37.43% through Vectra Consultancy Services. The remaining 11.38% is held by Kunje Venkatarame Gowda, who also owns minority shares in other companies connected to Chandrasekhar.

Minsk follows a similar structure. Chandrasekhar owns 62.84% of the company, Vectra Consultancy Services holds another 37.04%, and the remaining 0.13% is with Gowda.

These three companies – Vectra Consultancy Services, Jupiter Global Infrastructure and Minsk Developers – own 99.92% of Jupiter Capital. The remaining 0.08% is with Gowda. This arrangement, where these three companies operate as an intervening layer between Chandrasekhar and Jupiter Capital, creates an situation where, while Chandrasekhar got, as his affidavit says, Rs 27 crore as income from Jupiter Capital, he doesn’t directly own any shares in the company. Almost all shares in the company are held by three companies that he controls – directly and through Vectra Consultancy Services.

This is a grey area in India’s Representation Of The People Act, 1951. It says elected candidates have to declare movable and immovable property that they, their spouses and dependant children jointly or independently own. Accordingly, while Chandrasekhar has to declare ownership of companies in which he holds shares, the law is silent on whether he needs to declare these companies’ subsidiaries. “Any candidate can create a layer of companies above his or her primary business concerns and only declare those,” said MR Madhavan, the president of PRS Legislative Research.

A puzzling omission

India requires electoral candidates to report their assets and sources of income. This is partly to ensure the country can track growth in their wealth while in power, and partly to ascertain any conflicts of interest between their businesses and their duties as public representatives.

This has resulted in a cat and mouse game between elected representatives and the country. In 2018, the Economic Times reported some politicians parked assets with their wives. Others have used proxies. For instance, in 2012, The Times of India reported Nitin Gadkari’s employees, including his driver, controlled companies which had invested in Purti Power and Sugar.

In Chandrasekhar’s case, his use of an intervening layer of companies raises questions for two main reasons.

List of assets

In his 2018 affidavit, Chandrasekhar declared a net worth of Rs 65 crore.

However, his affidavit does not list all his assets. For instance, it lists only one vehicle – a 1942 model Red Indian Scout he bought in 2004 for Rs 10,000. His other cars are missing. This is a common pattern. Several Indian businessmen and politicians register their assets – like cars, houses and planes – not under their names but those of their group companies, said Jagdeep Chhokar, a founder-member of Association for Democratic Reforms, a civil society formation trying to make the workings of Indian political parties and politicians more transparent.

More importantly, with Chandrasekhar there is a discrepancy in the value of his holdings in Vectra Consultancy Services, Jupiter Global Infrastructure and Minsk Developers to the Election Commission. His affidavit pegs the value of his shares in Vectra Consultancy Services at Rs 2.19 crore; SPL Infotech, Rs 4.1 lakh; Jupiter Global Infrastructure, Rs 22,260; Minsk Developers, Rs 3.87 lakh; RC Stock & Securities, Rs 26 lakh; and Sanguine New Media, Rs 10 lakh.

These values, says his affidavit, report the value as on February, 28, 2018.

In its filings to the Registrar of Companies, Jupiter Global says something very different. The company’s financial statement for the year ending March 31, 2018, pegs the value of its 20.38% share-holding in Jupiter Capital at Rs 3,13,78,26,037 (Rs 313 crore).

Similarly, Minsk Developers pegs the value of its shares in Jupiter Capital at Rs 546.88 crore and RC Stock & Securities at Rs 677.75 crore.

While estimating the value of these companies that own almost all of Jupiter Capital, he uses much lower numbers.

Defence sector holdings

In the past, Chandrasekhar has been criticised for being a member of the standing committee on defence while also owning companies in the defence sector – like Axiscades.

At least three entites controlled by Chandrasekhar have sold a part of their equity to global firms active in the defence sector.

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The first of these is Indian Aero Ventures. It aims to provide lifetime support to aircraft – from training pilots to maintaining planes. Its biggest investor, with a 81.98% stake, is Hindustan Infrastructure Projects and Engineering. In turn, 99.99% of Hindustan Infrastructure Projects and Engineering, is owned by Jupiter Capital.

The company was set up in 2007. By the end of 2008, European Aeronautic Defence and Space Company, as Airbus was called between 2000 and 2014, bought 4.9% in the company. By 2011, its equity in the company had climbed to 17.85%, where it has remained since.

Airbus doesn’t only make passenger planes. It is also a partner in a joint venture – between Airbus (37.5%), BAE (37.5%) and Leonardo (25%) – called MBDA Missile Systems. MBDA makes Meteor missiles that India will use with Rafale.

The second company is Assystem Axiscades. A subsidary of Axiscades Engineering Technologies, it is a 50:50 collaboration with a French engineering company called Assystem. In India, the company is “involved in the construction of Dassault Reliance Aerospace Joint-Venture factories in Nagpur”, says its website.

The third company is Cades Studec. According to its Ministry of Corporate Affairs filings, 24% of this company is owned by Studec France, which works in the defense sector.

Chandrasekhar served on the Standing Committee for Defence between September 1, 2014, and August 30, 2017.

He attended meetings where Rafale was discussed. “In regard to acquisition, the Committee are very particular about the ‘Rafale’ Medium Multi Role Combat Aircraft (MMRCA) about which they recommend that negotiations should be completed at the earliest, procurement to be accelerated and every effort be made to avoid any kind of delay,” says the minutes of one meeting. In another Standing Committee meeting, another missile made by MBDA was discussed.

Scroll.in sent questions about both the discrepancy of net worth and possible conflicts of interest to Chandrasekhar. His office did not answer our question about the divergent valuation of Jupiter Global. His spokesperson, Pradeep Joseph, told Scroll.in to contact these specific companies saying they have “independent boards and management”. This response, however, elides over the fact that companies owned by Chandrasekhar hold controlling stakes in all but one company Scroll.in looked at – Assystem Axiscades is owned equally by the two partners.

On the question of conflicts of interest, Joseph said: “As required by Parliament, he has disclosed all his interests in his disclosures. All of Mr. Chandrasekhar’s disclosures are prepared by Senior External Counsel to be fully compliant with all mandatory disclosure requirements of Parliament.”

This response, however, sits oddly with a 2015 ADR report which sought to collate parliamentarians’ business holdings. Chandrasekhar disclosed his link to Jupiter Capital but described its business type as “NBFC Business”, meaning a Non-Banking Financial Corporation, a term usually used for firms that provide financial services, not holding companies.

As per this report, he did not mention any subsidaries of the company.