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The curious case how Dempo and Souza changed to Vedanta

Shah Commission Final Report

vedantasadan

04, Sep 2014

You need to read the fascinating story of how leaseholder Dempo and Souza Limited of Goa as concessionaires of 5 leases, changed like a chameleon over the years to “Cornphania Mineira Dempo & Souza Limited of Goa” as operators of these 5 mines. Souza was dropped by the time the environmental clearances were given by the Ministry of Environment and Forests, Government of India to Dempo Mining Corporation Limited in 2005-07.

How did it happen? It’s all in the name they said. Just a name change but within a few days, the Registrar of Companies, Goa, facilitated Dempo Mining Corporation Private Limited to drop its “Private” on 12/11/2010. And less than a week later, Dempo Mining Corporation Limited then changed its name to “Sesa Mining Corporation Limited” on 18/11/2010. This was done with the Central Government’s kiss of approval. In less than a week.

‘V.S. Dempo & Company Private Limited’ also had an identity crisis, dropped its ‘Private’ and changed to V.S. Dempo &  Company Limited on 19/11/2010. Turned out it didn’t like that too so on the very same day on19/11/2010, changed it to ‘Sesa Resources’. And you were marvelling at how Dempo Mining Corporation changed its name in less than a week. Practice makes perfect.

So what’s in a name you will say? What’s wrong with a name-change. But the Chief Executive of Sesa in the General shareholders meeting for the year 2009-2010 announced that it was an Acquisition. The statement read: “Dempo has been the first major acquisition by your Company. And the success of the post-merger fit has given us confidence to pursue the acquisition route for growth for coming years.”

The plan was for Vedanta to take over all the mining lease companies in Goa. Which hat did we pull Vedanta out from? Simple.

Japan Mitsui Finsider International Ltd owned majority stake in Sesa Goa, and Vedanta bought over their stake. So now, Vedanta of UK owned major share of Sesa Goa.

And, what’s more in 2003 one of the Directors of Vedanta was one P Chidambaram who became the Finance Minster of the country and being the upright citizen that he is, resigned from his post of Director in 2004 when the UPA-1 was steering this country into the pits. So while we in Goa were complaining and cursing poor old former CM and Mining Minister, Digambar Kamat who was being controlled by the mining lobby, none of us knew that the controls were strongest at the Centre, with the Union Finance Minister himself as their old colleague. It’s all there in the Shah Commission’s Final Report.

You absolutely must click on this link of the Shah Commission’s Final Report and scroll straight down to Page 273  mines.gov.in/writereaddata/Contentlinks/8cdbd336de114659aec16773d27dc096.pdf  Read and learn. It’s very educative about how corporates can sell the birthright of their descendants to the highest bidder.

The report states: “This is not a case of a mere change in the name of a company on account of change of holding pattern of shares of a limited company. Hence, the excavation of mineral namely iron ore from the Day One is in contravention of Rule 37 of MCR, 1960.

“The Stake in Multinational Company Vedanta Group of Companies by a Non-Indian may have direct bearing on legality of even indirect transfer of leasehold interest in a lease area in view of the scheme Section 5(a)
of MM(DR) Act, 1957. All Directors of Vedanta will have control on administration and dealing of other
subsidiaries, including Sesa Goa Ltd. or Sesa Resources Ltd., etc. because Vedanta Group of Companies is
holding 51 % or more shares. Unless all directors of Vedanta Group of Companies are Indian Nationals, they
can not obtain mining lease and I or create interest, in any direct or indirect manner, in the lease hold rights.

“The matter become more serious being the lease lands are forest land. This would amount of violation of the
purpose of the Act in general and Section 5(a) of MM(DR) Act, 1957 in particular
.”

– See more at: http://www.targetgoa.com/goabuzzdet.php?bzid=6332&&id=3#sthash.voZIrseC.6wXeDiRr.dpuf

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