‘Suffocating Occupation’ of Palestine is now a Series of War Crimes

Vijay Prashad | 28 Oct 2023

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The US has deeply politicised the atmosphere in the UN, using its own resolutions to rally support—unsuccessfully—for Israel, while attacking the Palestinians (and bizarrely Iran) in the process.

On the night of October 27, Israel cut all communication services in Gaza and intensified the aerial bombing campaign.

On October 24, it became clear to the United Nations (UN) that the sustained bombardment of Gaza—which had already killed 6,500 people (including at least 35 UN employees)—had made this part of Palestine unviable for human life. Over two million people live in this slim section of land on the Mediterranean Sea. Since 1948, the refugees who live here have relied on UN assistance, with the United Nations building an entire agency (UNRWA) in 1949 for that purpose.

UN Secretary General António Guterres told the UN Security Council that within days the UN would run out of fuel for its trucks, which carry the minimal relief that crosses into Gaza from Egypt and supports the 660,000 Palestinians who have fled their homes to come to UN compounds across Gaza. The trucks carry “a drop of aid in an ocean of need,” Guterres said. “The people of Gaza need continuous aid delivery at a level that corresponds to the enormous needs. That aid must be delivered without restrictions.”

Guterres’s statement, delivered in a calm voice, did however depart from the sentiment of disregard that defines the statements of European and North American leaders—many of whom have rushed to Tel Aviv to stand beside Israeli Prime Minister Benjamin Netanyahu and pledge their full-throated support for Israel.

History matters. Guterres said that the problems now befalling the Palestinians of Gaza did not begin on October 7, when Hamas and other Palestinian factions broke through the apartheid security barrier and attacked the settlements that border Gaza.

His statement on the situation over the past decades is factual, based as it was on thousands of pages of UN reports and resolutions: “It is important to also recognize the attacks by Hamas did not happen in a vacuum. The Palestinian people have been subjected to 56 years of suffocating occupation. They have seen their land steadily devoured by settlements and plagued by violence; their economy stifled; their people displaced, and their homes demolished. Their hopes for a political solution to their plight have been vanishing.” The image of the “suffocating occupation” is utterly accurate.

After Guterres made these remarks, Israeli authorities—as if on cue—demanded the resignation of the UN Secretary-General. Israel’s permanent representative to the UN Gilad Erdan accused Guterres—absurdly—of “justifying terrorism.” Saying that Guterres “once again distorts and twists reality,” Erdan noted that his government would not permit the UN Humanitarian Aid chief Martin Griffiths from crossing the Rafah border into Gaza to oversee the distribution of relief. “In what world do you live?” asked Israeli Foreign Minister Eli Cohen of Guterres.

At the UN Security Council, meanwhile, the United States vetoed resolutions for a ceasefire, while China and Russia vetoed a US resolution that said Israel had a right to defend itself and Iran must stop its export of arms. The United States has deeply politicised the atmosphere in the UN, using its own resolutions to rally support—unsuccessfully—for Israel, while attacking the Palestinians (and bizarrely Iran) in the process.

Nothing Neutral About the United States

The United States has never been an unbiased arbiter over the region, given its close linkage to Israel from at least the 1960s. Billions of dollars of weapons sold to Israel, billions of dollars of aid to Israel, and punctual statements in favour of Israel have defined the relationship between Washington and Tel Aviv.

During all the negotiations between the Palestinians and Israelis, the United States has played a game of duplicity: pretending to be neutral, but in fact, using its immense power to neuter Palestinians and to strengthen Israel.

The Oslo Accords, which led to the creation of a powerless Bantustan run by the Palestinian Authority, was negotiated with the United States with its hands on the pen. Oslo led to the creation of a process that has resulted in the attrition of Palestinian control over East Jerusalem and the West Bank as well as the garrotting of the Palestinians in Gaza—all of this combined being the “suffocating occupation” that Guterres talked about.

Since 2007, when Israeli troops left Gaza and then hemmed it in by land and sea walls that made Gaza the world’s largest open-air prison, Israel has routinely bombed the Palestinians who live there. Each time there is a bombardment, one worse than the next, the United States government has backed Israel fully and re-armed it during the bombardment.

Calls for a ceasefire have been blocked by Washington in the UN Security Council since the destructive bombing of Gaza called Operation Cast Lead (2008-09). This time, on cue, the United States has provided Israel with diplomatic support, with President Joe Biden going to Tel Aviv and with the United States going as far as adopting a flagrant lie that Israel did not bomb al-Ahli Arab Hospital in Gaza City on October 17.

Before Biden got to Israel, the United States sent two major naval battle groups into the eastern Mediterranean—two aircraft carriers, the USS Dwight D. Eisenhower and the USS Gerald Ford, with their supporting naval vessels in two strike groups.

Since then, the US has moved missile defence systems into the region to strengthen the Israeli armed forces. The movement of these forces comes alongside billions of dollars spent annually by the US to arm Israel, including $15 billion in extra military assistance over this recent period. These wars are not merely Israel’s wars. These are the wars of Israel and the United States, with its Western allies in tow.

Gaza Will Become Mosul

Meanwhile, the United States has sent senior military officials to work closely with the Israeli generals. One of these officials is a three-star Marine lieutenant general James Glynn, who has been sent to “help the Israelis with the challenges of fighting an urban war.”

Glynn and others are in the Israeli military chain of command not to make decisions for Israel but to assist them. Glynn was part of the US Operation Inherent Resolve against the Islamic State of Iraq and Syria (ISIS) in the years following 2014, when the United States bombed Mosul and Raqqa (Iraq) to eject ISIS from those cities.

As if to underline Glynn’s Mosul and Raqqa experience, US Defence Secretary Lloyd Austin told Israel’s Defence Minister Yoav Gallant that he had himself been involved in Operation Inherent Resolve in 2016-2017 when Austin headed US Central Command. Austin’s comments and Glynn’s deployment to Israel are in anticipation of the ground war that is expected against Gaza. “The first thing that everyone should know,” Austin told ABC News, “and I think everyone does know, is that urban combat is extremely difficult.”

Indeed, Austin’s comment about the difficulty of urban combat, particularly with the Mosul and Raqqa experiences in mind, is appropriate. In 2017, the Associated Press (AP) reported that the US attack on Mosul had resulted in between 9,000 and 11,000 civilian casualties. Very few people recall the brutality of that war and the numbers of civilian dead are barely noted.

If Mosul is the example before the United States and Israel for the ground war to come in Gaza, there are some differences that should be borne in mind. ISIS had only two years to dig in its defences, while the Palestinian factions have been preparing for such an eventuality since at least 2005 and are, therefore, better prepared to fight the Israeli army one ruined street after the next.

It appears from all reports that the morale of the Palestinian factions is far greater than that of the Israeli army, which means that the Palestinian factions will fight with much more force and with much less to lose than ISIS (whose fighters slipped out of the city and vanished into the countryside).

In both Mosul and Raqqa, when the US aerial bombardment began, tens of thousands of civilians fled the cities for the countryside alongside some ISIS fighters to wait for the destruction to commence and then end. If they had remained in Mosul and Raqqa, the civilian casualties would have been twice the number reported by AP.

Mosul’s population was just 1.6 million, smaller than the 2.3 million residents of Gaza—so the numbers of civilian casualties would have to be adjusted upwards. Palestinians in Gaza are trapped and cannot escape to the countryside, unlike the residents of Mosul and Raqqa. They can go nowhere as Israeli tanks enter Gaza, guns blazing. The civilian deaths in Gaza, already outrageously high due to the uncontrolled bombing by Israel, will be unimaginable during this ground war that began on October 27. Gaza, already a ruin, will be left a cemetery.

The Everyday Violence of Life in Occupied Palestine

Vijay Prashad | 25 Oct 2023

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Since the Nakba, institutional violence by Israel against Palestinians has worked alongside paramilitary and military violence to advance the Zionist fantasy of a “Jewish state” across all of Historic Palestine.

Israel's defense minister told parliament that his forces have a three-point plan—to destroy Hamas, to destroy the other Palestinian factions, and to create a new “security regime” in Gaza (Photo: Times of Gaza via X).

Driving along the Jordan River Valley in the Occupied Palestine Territory (OPT) of the West Bank is a stunning experience. The road is officially called Highway 90. The arable and irrigated land along this road is held militarily and illegally by Israeli settlers, many of whom are not actually Israeli citizens, but residents from the Jewish diaspora. A United Nations Commission report published in 2022 showed that this settlement activity is a crime against international human rights law (transfer of population into an occupied territory). Israeli settlers and the Israeli military that defend them call Highway 90 Derekh Gandhi or Gandhi’s Road. When I first drove along that road over a decade ago, I was puzzled by Gandhi’s name there. Mahatma Gandhi was a leader of the Indian freedom struggle, and had on many occasions—such as in his 1938 article, “The Jews”—offered his sympathy and solidarity with the Palestinian people. In fact, the road that slices through the West Bank—a crucial part of a proposed Palestinian state—is named after Rehavam Ze’evi, who was ironically given the nickname Gandhi.

Ze’evi led the National Union party, which brought together all the most dangerous currents of Israeli far-right politics. As the leader of this party, and, before that, of Moledet, Ze’evi advocated the removal of Palestinians from what he considered to be Israel’s land (East Jerusalem, Gaza, and the West Bank). He supported the creation of Eretz Yisrael that would stretch from the Jordan River to the Mediterranean Sea. In March 2001, Ze’evi—who would later be accused of sexual harassment and of being involved in organized crime—told The Guardian that “it’s not murder to get rid of potential terrorists, or those who have blood on their hands. Each one eliminated is one less terrorist for us to fight.” A few months later, Ze’evi showed that he did not distinguish among Palestinians, calling all of them a “cancer” and saying, “I believe there is no place for two peoples in our country. Palestinians are like lice. You have to take them out like lice.” He was shot to death by fighters of the Popular Front for the Liberation of Palestine (PFLP) in October 2001. The name of the road that cuts across the West Bank—promised to a Palestinian state in the Oslo Accords of 1993—still bears Ze’evi’s name.

Ze’evi was assassinated by PFLP fighters because the Israeli army had killed their leader Mustafa Ali Zibri by firing two cruise missiles at his home in Al-Bireh (Palestine). The assassination of Zibri was not an isolated incident. It was part of Israeli Prime Minister Ariel Sharon’s plan to “cause the collapse” of the Palestinian Authority—created to manage the Oslo Accords—and “send them all to hell.” Apart from the murder of civilians on a punctual basis, from July 2001 the Israeli government killed four political leaders (Islamic Jihad leader Salah Darwazeh and Hamas leader Jamal Mansour in July, and then Hamas leader Amer Mansour Habiri and Fatah leader Emad Abu Sneineh in August). After the killing of Zibri, the Israelis assassinated Hamas’s Mahmoud Abu Hanoud in November. “Whoever gave a green light to this act of liquidation,” wrote military correspondent Alex Fishman in Yediot Ahronot, “knew full well that he is thereby shattering in one blow the gentleman’s agreement between Hamas and the Palestinian Authority; under that agreement, Hamas was to avoid in the near future suicide bombings inside the Green Line [Israel’s pre-1967 borders].”

Hot violence, cold violence

For centuries, Palestinian Christians, Muslims, and Jews lived side-by-side in the lands that would eventually be Israel and the OPT, including along the Jordan River Valley. Since the expulsion of the Palestinian Christians and Muslims and the arrival of European Jews, the legal apparatus—or the “cold violence,” as the writer Teju Cole calls it—worked alongside paramilitary and military violence against the Palestinians to create a fantasy of an ethno-nationalist state project (the Jewish State, as it was then called). The erasure of the non-Jewish Palestinians was key to this project, either by massacres (Deir Yassin in 1948) or the wholesale removal of the Palestinian population from their land (the Nakba of 1948). The massacres and the population transfers came alongside the denial of the reality of Palestine and the Palestinian people. The heir to Ze’evi, current finance minister Bezalel Smotrich said this March, “There’s no such thing as Palestinians because there’s no such thing as a Palestinian people.” This is not an opinion that can be dismissed as a far-right rant. Likud member Ofir Akunis, minister of science and technology, said three years ago, “There’s no place for any formula to establish a Palestinian state in Western Israel.” The phrase “Western Israel” is a chilling statement about the Israeli consensus on full annexation of the West Bank with disregard for international law.

A focus on Gaza is essential. The Israeli “hot violence” is extreme, with the death toll of Palestinians—almost half of them in Gaza of children—over 5,000. The Israeli land invasion has been blocked, for now, by the recognition of high morale among the Palestinian resistance. The latter will fight every Israeli soldier that goes into the ruins of Gaza. Before this Israeli incursion, 450 trucks crossed into Gaza with supplies for the 2.3 million residents; it was taken as a victory when nine United Nations trucks and 11 trucks of the Egyptian Red Crescent crossed into Gaza on October 21. Amnesty International looked at only five bombings of the Israelis and found evidence of war crimes, which should alert the International Criminal Court to re-open its file on Israeli atrocities. This should include the crime of collective punishment by cutting water and electricity to Gaza, and bombing access roads to the Rafah crossing into Egypt, and by bombing the Rafah crossing itself.

Large demonstrations across the world demand a ceasefire (at a minimum) and an end to the occupation. Israel is not interested. Its defense minister Yoav Gallant told parliament that his forces have a three-point plan—to destroy Hamas, to destroy the other Palestinian factions, and to create a new “security regime” in Gaza. The Palestinian people—not just the armed factions—are resolute in their resistance to Israeli occupation. The only way for Gallant’s new “security regime” to work would be to erase this resistance, which means to remove all Palestinians from Gaza either by massacres or by dispossession. The United States is following along with this extermination plan: a US State Department memorandum says that its diplomats must not use phrases such as “de-escalation,” “ceasefire,” “end to violence,” “end to bloodshed,” and “restoring calm.”

Vijay Prashad is an Indian historian, editor, and journalist. He is a writing fellow and chief correspondent at Globetrotter. He is an editor of LeftWord Books and the director of Tricontinental: Institute for Social Research. He has written more than 20 books, including The Darker Nations and The Poorer Nations. His latest books are Struggle Makes Us Human: Learning from Movements for Socialism and (with Noam Chomsky) The Withdrawal: Iraq, Libya, Afghanistan, and the Fragility of U.S. Power.

This article was produced by Globetrotter.

Hostility to Evidence is the Hallmark of Fascists

Prabhat Patnaik | 28 Oct 2023

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By not showing any concern for so many indices prepared by different agencies on nutritional deficiencies in India, the Hindutva-led Modi government is showing its true colours.

All fascistic outfits have one common characteristic: they reject outright all evidence that goes against the narrative they spin; and the Hindutva elements in power in India are no exception. Their narrative presents India as the fastest growing economy in the world where the people never had it so good. But, if evidence collected by international agencies or even by the government’s own agencies shows otherwise, then that evidence must be wrong. The credo of India’s fascistic Hindutva outfit is simple: the reality is what (Prime Minister Narendra) Modi says, if evidence shows otherwise then it must be wrong, and, most likely, the product of a nefarious terrorist conspiracy.

There is a fundamental difference between an outright rejection and a critique. If the Hindutva elements critiqued the evidence, then that would be a perfectly worthwhile activity, since all critique is intellectually productive: it leads either to a refinement of the method of collecting evidence, or to a different interpretation of the available evidence from the one commonly read into it, or to a redirection of focus to an altogether different body of evidence; it leads in short to a deepening of understanding.

But engaging in any such intellectual activity, such as a critique of the evidence, is beyond the capacity of the Hindutva elements; they can only reject outright any evidence contrary to their spin, without ever explaining why a particular piece of evidence should not be taken into account for assessing the validity of their claims.

I shall illustrate my point with reference to three such episodes of rejection of evidence by the Modi government. The first relates to the 2017-18 National Sample Survey on consumer expenditure. These surveys, it may be recalled, had been designed by Professor P C Mahalanobis, the distinguished statistician of the country, way back in the 1950s. Every five years, there was a large sample survey which, in fact, was the largest regular periodic sample survey in the world, and which, notwithstanding all its limitations that are bound to exist in any such exercise, provided valuable material for generations of researchers in India and abroad.

The 2017-18 quinquennial survey, however, reportedly showed a dismal picture with regard to poverty in the country, because of which the Modi government not only prevented the findings of the survey from becoming public, but ended these surveys altogether. 

From what had “leaked out” before the suppression occurred, the real per capita rural consumer expenditure had declined by as much as 9% between 2011-12 and 2017-18, on the basis of which the proportion of rural population unable to access 2,200 calories per person per day (the original official benchmark for defining rural poverty) was estimated to have increased from 68% in 2011-12 to 78.5% in 2017-18.

Instead of being alarmed by this evidence, or even testing its verisimilitude by conducting a fresh survey (as the United Progressive Alliance or UPA government had done in 2011-12 because of the high levels of poverty shown by the original quinquennial survey of 2009-10), or setting up a committee of experts to examine the implications of the survey and the possible remedial measures that could be adopted, the National Democratic Alliance or NDA government just suppressed the findings and abandoned all future surveys! This is the typical fascistic response to evidence contrary to their claims.

My second example relates to the National Family Health Survey 5 which was conducted over the period 2019-21. This showed that compared with the previous NFHS 4, which was carried out in 2015-16, the incidence of anaemia in both children and women, which was already very high, had registered an alarming increase. While 59% of children between the ages of 6 months and 59 months were anaemic in 2015-16, the figure for 2019-21 had risen to 67%.

What is more, the incidence of moderate to severe anaemia had risen from 30.6% to 38.1% between these two dates, while the incidence of mild anaemia had remained unchanged at 28.4% and 28.9%, respectively.

Likewise, among women (up to age of 49 years) there had been an increase in the incidence of anaemia between these two periods from 53% to 57%; the increase in moderate to severe anaemia was from 28.4% to 31.4%.

Even among men up to the age of 49 years, where the incidence of anaemia was much lower and rose by a smaller margin, from 23% to 25%, the incidence of moderate-to-severe anaemia rose from 5% to 8%. Rural children and adults showed a higher incidence of anaemia than the average, and children of anaemic mothers were at a higher risk of being anaemic.

What was the government’s response to these findings? Instead of showing any concern over these alarming findings, calling experts to discuss their veracity and implications and also the urgent steps to be taken to reverse the trend, which any government with an iota of concern for the people would have done, it simply suspended on a trumped-up charge the director of the institution, the International Institute of Population Studies, that had carried out the NFHS.(The trumped-up nature of the charge is evident from the fact that the suspension was lifted when the director resigned). That again was the typical fascistic response.

My third example relates to the Global Hunger Index. The Index for 2023 shows India occupying the 111th rank among a total of 125 countries for whom it is compiled (it is not compiled for countries with low levels of hunger); what is more, India’s rank is lower than that of our immediate neighbours, Pakistan (102nd), Bangladesh (81st), Sri Lanka (60th) and Nepal (69th), and has been falling over time.

Again, what was the government’s response to these extremely disturbing findings? Not an iota of shock, not an iota of concern, but simple outright rejection, with one cabinet minister even making utterly ill-informed and facetious remarks about them.

The Global Hunger Index (GHI) is calculated from four parameters: undernourishment, under-5 mortality rate, child stunting (height compared with age) and child wasting (weight compared with height). Even if one accepts for a moment the government’s claim that these parameters are heavily influenced by the state of children rather than of adults, the index still shows that the state of children is abysmal in India compared with the rest of the world; this, in other words, does not constitute any ground for ignoring the finding of the GHI.

The minister had facetiously claimed that she too was hungry because she was travelling the whole day and would have said so if telephoned to inquire about her state of nutrition; the under-nutrition information going into the construction of the GHI, which was based on polling 3000 respondents in India, was therefore suspect, warranting a rejection of the GHI as a whole.

Three points, however, need to be made in this context: first, under-nutrition is only one of four parameters entering the GHI; second, even for assessing under-nutrition, the GHI relies not just on polling respondents but also on food balance sheets of each country, derived from official data themselves; and third, the reason for polling respondents lies precisely in the discontinuation of the consumer expenditure surveys that the BJP (Bharatiya Janata Party) government itself has ordered.

It should be remembered that India’s rank in the GHI, though sliding over time, has been abysmally low for quite a while, even before the consumer expenditure surveys were discontinued by the BJP government and the method of polling respondents was perforce resorted to.

The coexistence of acute and growing hunger, together with high rates of GDP growth, has, in other words, been a perennial feature of the neo-liberal regime, even before the fascistic elements had come to power; they have only continued and accentuated the trend.

The claim that polling respondents to assess hunger is responsible for showing India in a poor light is, therefore, additionally flawed, in addition to the above-mentioned reasons, for two further reasons: first, this method is used for all countries, not just for India, since other countries do not have the elaborate sample surveys that India used to have; and second, India’s low rank is not caused by the polling respondents method, for it predates the use of this method.

The fact that so many different indices prepared by so many different agencies, each using different sources, point to a state of acute and growing nutritional deprivation in India, even when GDP (gross domestic product) growth has apparently been occurring at a high rate, is a matter to be taken seriously.

The fact that the fascistic government of the country, instead of showing any concern, simply rejects this evidence, shows its true colours. At this rate it will only destroy the entire statistical infrastructure of the country that had been erected with such great care.

HIDUISM IS FASCISM

INDIA

In Last Decade, 14% ‘Concerning’ Growth in Cargo Handled by Adani Ports

Newsclick Report | 28 Oct 2023

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Two officials and a former CCI chairperson flag concern about APZEZ’s market concentration to The Indian Express.

Adani Ports and Special Economic Zone Limited (APSEZ) has a coastal network rivalling that of the government’s 12 ports with the company having a presence every 500 km on an average along the country’s 5,422-km coastline.

The phenomenal expansion from only the Mundra Port in 2001 to 14 ports and terminals handling 24% of all cargo passing through the country’s ports has become a cause of concern in certain sections of the government, according to an investigative report of The Indian Express.

“This is a concern. Such a growth model compounds the concerns about the growing concentration risk,” a top economic ministry official requesting anonymity told the newspaper.

The figures of the total cargo handled by APSEZ and the Adani Group’s market share in the last 10 years show a massive increase.

From 2013 to 2023, the total cargo handled by APSEZ jumped nearly fourfold to 337 million tonnes (MT). Its volumes increased at a compounded annual growth rate (CAGR) of 14% against the industry’s 4%.

In contrast, the total cargo volume of all other ports grew at a CAGR of merely 2.7% from 842.66 MT to 1,096.39 MT.

The Group’s market share in total cargo handled almost tripled from around 9% to almost 24% in the same period. The Mundra Port handled 155 MT in FY23, more than any of the 12 government-owned ports.

On the other hand, the Centre’s market share dropped from around 58.5% to 54.5%.

Moreover, Adani’s market share has crossed 50% in ports not controlled by the Centre.

The increase in Adani Group’s market share in the ports sector has come at the cost of Centre-controlled ports, according to the newspaper.

Strikingly, this growth has been through the inorganic route, according to the officials and the regulator.

The Adani Group’s acquisition of ports in the last decade account for 37% of the total cargo volumes (337 MT), according to an analysis of cargo handling data by the newspaper.

The Group’s spokesperson didn’t reply to mails sent by the newspaper for comments on its expanding footprint and concentration risks.

APSEZ also beats the government in turnaround time, the duration between entry and exit of a cargo ship, taking only around 0.7 days compared to two days taken by the Centre in August.

While APSEZ is well-managed and a profitable business, a senior official with the shipping ministry flagged substantive risks of high market concentration, meaning low competition, high-entry barriers for newer and smaller players, high dependencies on dominant players, and higher chances of abuse of dominant position.

The Hindenburg Research and Organised Crime and Corruption Reporting Project reports alleging accounting fraud and stock manipulation by the Group are also a reason for concerns.

Another senior official from an economic ministry requesting anonymity said that the reports—denied by the Group as “motivated”—have increased anxiety about this market concentration in a strategic sector like shipping.

In 2013, APZEZ handled cargo volumes of around 91 MT, only 10% of the total volumes handled by all ports and more than 23% handled by all minor ports (not controlled by the government).

By 2023, the Group has a significantly higher footprint with its eight operational minor ports in India handling around 337 MT as against 650 MT handled by the minor ports, according to the newspaper.

APSEZ also operates terminals at three major ports. The Vizhinjam port (Kerala) and a terminal at the Syama Prasad Mookerjee Port (Haldia) are under construction. The company also acquired the Karaikal Port (Puducherry) in April—but since it was not part of the Adani Group in FY23, its volumes are not included in Adani’s total market share.

In the last 10 years, APSEZ’s volumes registered higher growth than compared to all major and minor ports. In FY21, when the overall port volumes and volumes at major and minor ports contracted by more than 4%, APSEZ’s volumes increased by around 11% compared to FY20.

ASPEZ’s growth was fuelled by the acquisition of Dhamra Port in Odisha, Kattupalli in Tamil Nadu, Krishnapatnam and Gangavaram in Andhra Pradesh and Dighi in Maharashtra.

According to a former Competition Commission of India (CCI) chairperson, APSEZ’s “share has been continuously growing in a creeping fashion. It is definitely a concern if there is a creeping acquisition of capacity by one player while the others fall or languish”.

In 5-10 year, it “could be a problem. The government and the CCI should keep an eye”, the chairperson said requesting anonymity.

Another former CCI chairperson differed saying that a company’s growth in “natural monopolies” like ports and airports isn’t worrying. The CCI’s only intervenes if there is evidence of “abuse of monopoly”.

The CCI didn’t respond to mails requesting it views on the matter.

CRIMINAL CAPITALI$M

INDIA

Minority Shareholders Accuse Baidyanath Group of Embezzlement, Company Denies

Ayush Joshi , Paranjoy Guha Thakurta | 29 Oct 2023

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The complaints made by these shareholders to the Ministry of Corporate Affairs have been described as vexatious and unfounded. The sequence of events indicates an internecine war within a business family to control lucrative assets. An exclusive report for NewsClick.

Image Courtesy: Justdial

Which Indian hasn’t heard of Chyawanprash? Who hasn’t tasted Churan before or after a meal? The first is an ancient dietary supplement that is a mixture of sugar, honey, ghee, amla, sesame oil, and various berries, herbs, and spices. Churan is a sweet and tangy blend of natural ingredients that helps digestion.

The pioneer in making and selling these two products is Shree Baidyanath Ayurved Bhawan Private Limited, the flagship company of the Baidyanath Group. Baidyanath is the oldest name in the market for ayurvedic medicines in India. The original company was founded in 1917 by two brothers, Pandit Ram Dayal Joshi, and Ram Narayan Vaidya, who were considered scholars of traditional Indian medicine.

The firm started as a small shop in Kolkata. It was then a proprietary concern. In May 1947, just before India became politically independent, it was converted into a private limited company under the Companies Act of 1913. Over the decades, the Baidyanath group expanded its operations to become one of the biggest manufacturers and sellers of ayurvedic medicines not only in India but across the world. The group later diversified its operations into unrelated sectors, such as coal mining and power generation, that landed it into controversies.

Like many family-owned businesses, the ownership rights and managerial control over the flagship firm, Shree Baidyanath Ayurved Bhawan Private Limited (henceforth Baidyanath) and other companies in the Baidyanath Group passed down through generations after the demise of the two founders (see family tree below).

Source: Submission to the Serious Fraud Investigation Office (SFIO), Ministry of Corporate Affairs, Government of India

The group is now effectively controlled and run by a member of the third generation of the extended family, Anurag Sharma, who is designated as Joint Managing Director. His writ is being challenged by other family members who have accused his section of the family of financial misdemeanours and fraudulent transactions in shares. These allegations have been denied.

Booming Business Dominated By A Few

The market for ayurvedic products in India touched Rs 62,600 crore in 2022, according to one estimate. The Baidyanath Group is among the handful of corporate conglomerates that dominate this market. Controversies have dogged the group over the years. It was recently accused of putting out false and misleading advertisements. The United States Food and Drug Administration (USFDA) has alleged that Baidyanath used harmful ingredients in its products.

Adding to its woes, now a section of shareholders of the flagship company who are members of the extended family, have complained to the Serious Fraud Investigation Office (SFIO) in the Union Ministry of Corporate Affairs alleging embezzlement of funds and “illegal” transfer of shares. The SFIO’s investigations are on at the time of writing.

According to the complaint made to the Additional Director, SFIO, that was marked to the Secretary, Corporate Affairs, and other senior officials in the Ministry, a copy of which is with the writers of this article, on November 7, 2022, Rajesh Sharma and his brother Rakesh Sharma alleged that the shares in the name of their father, late Hazari Lal Sharma, have been “diluted” in a “grossly arbitrary and capricious manner” from 8.14% to 4.20% and claimed that the transfer of shares violates Sections 108 and 109 of the old Companies Act of 1956 (that are now Sections 58 and 59 of the new Companies Act of 2013).

Sections 58 and 59 of the Companies Act of 2013 state that “any person that has ceased to be a member of the company, has to be reflected in the register.” Moreover, “if a private company limited by shares refuses to transfer securities (shares) or interest of a member in the company, it shall inform them with a reason within 30 days of the refusal.”

It has been claimed that after the death of their father H L Sharma, Rajesh and Rakesh have not been given a seat in the board of directors of the company, whereas all other branches of the family have been represented on it. It has also been alleged by the complainants that they were not served any notices before convening general body meetings of shareholders and that many of such meetings were conducted only “on paper.”

Baidyanath’s company secretary has refuted these allegations and claimed that Rajesh Sharma (holding 0.8% shares) and his brother Rakesh Sharma (holding 0.6% of the shares) are not eligible to hold positions on the company’s board of directors. But the minority shareholders have more serious allegations against the company.

Allegations of Financial Embezzlement and Incorporation of Bogus Entities

According to the complainant’s allegations, the audited financial statements provided to government authorities, like the Registrar of Companies (RoC), contain fraudulent information and numbers, created by manipulating financial records without following accounting standards. The complaint claims that Baidyanath’s management has informally split the business to suit their preferences. The company’s main business has five manufacturing units located at Kolkata, Patna, Allahabad, Jhansi, and Nagpur.

Rajesh Sharma and his brother Rakesh Sharma have claimed that auditors have expressed concerns about the finances of companies in the group and their boards of directors have “intentionally” misled the RoC. These claims, together with other allegations which will be subsequently detailed, have been denied.

Shree Baidyanath Ayurved Bhawan’ has reported an annual turnover of around Rs 500 crore in recent years. Rajesh and Rakesh Sharma have alleged that the company’s and the group’s turnover has been “manipulated” over a period of three decades and should have been four times higher. They further allege that turnover not less than Rs 1,500 crore has been concealed and the funds “laundered” through fictitious payments and expenses. In addition, the complainants claim that 72 “asset-less” entities were created at Baidyanath’s addresses, and funds were diverted in the name of payment of office rent, advertising expenses and “fraudulent” accounting entries in the name of affiliate companies.

They also allege that 30 individuals were paid artificially high salaries totalling over Rs 25 crore a year, while the complainants were deprived of their dues and entitlements worth more than Rs 80 crore.

A particular director of the flagship company had reportedly side-tracked other members of the extended Sharma family to control its coal mining division. It may be noted that Baidyanath was booked by the Central Bureau of Investigation (CBI) and the Enforcement Directorate (ED) for its involvement in the infamous coal block allocation scandal (popularly called “Coalgate”) that took place 2015 onwards. In October 2023, a Delhi court acquitted the accused in the case.

The final set of allegations against Baidyanath relate to a school, Shri Shiv Narayan Joshi High School, that was located at Kotputli near Behror, mid-way between Delhi and Jaipur. The educational institution was registered as a society with the RoC in 1961 but has now ceased operations. According to the complainants, the society holds more shares in Baidyanath than individual members of the extended Sharma family. The complainants claim they are unaware of how Baidyanath’s dividends accrue to the society that used to run the school.

Baidyanath’s Response to the Allegations

Following the receipt of the November 2022 letter from Rajesh and Rakesh Sharma, addressed to the Assistant Registrar of Companies, Ministry of Corporate Affairs, Baidyanath’s company secretary Uma Shankar Gutgutia responded stating that there was no supporting evidence for the complainants’ allegations. He deemed the letter “vexatious” and an attempt to pressure the company’s management into conceding to unsubstantiated claims. Gutgutia said no shares had been transferred in violation of the provisions of the Companies Act of 1956 and that the company had not received requests or reminders for transfer of shares by the complainants.

Regarding auditing practices, Gutgutia said Baidyanath has a robust three-tier auditing system, adding that any claims of auditing malpractices are baseless. The company denied allegations of an “unofficial demerger” and said there was no such legal term in the country’s corporate laws. He disputed the claim of the complainants that revenue figures had been artificially suppressed, and added that Baidyanath’s annual turnover ranged between Rs 500 crore and Rs 700 crore in recent years. For instance, in the year ended March 31, 2021, the company recorded a turnover of Rs 689.79 crore.

Baidyanath’s company secretary argued that the 72 operating entities named in the complaint were all legitimate and that their transactions have been included in the audited financial reports. Gutgutia dismissed the accusation by the complainants that they had not been paid Rs 80 crore, as false and unsubstantiated. He emphasised that Rajesh and Rakesh Sharma had no inherent right to representation on the board of directors and that they were regularly receiving dividends.

Countering Baidyanath’s Reply

In response to Baidyanath’s counter statement, the complainants provided further details to the SFIO. Of the 72 alleged bogus entities, it has been claimed that a group entity, Baidyanath Finance and Leasing Limited, had a rental income of Rs 45.69 lakh in 2020-21 that was higher than its total receipts of Rs 30.67 lakh in 2021.

In 2017, Ameve Sharma, the then president of Baidyanath, had said in an interview with the Financial Express that “Baidyanath’s market share is higher than that of Dabur. With 15-20% of market share in the Indian Ayurvedic market of Rs 6,000 crore in 2017 (Rs 62,600 crore according to 2022 estimates), and 2-3% of market share in Herbal market space of estimated Rs 20,000 crore.”

If the above estimates are correct, Baidyanath’s claim that the company’s annual turnover has been between Rs 500 crore and Rs 700 crore, does not seem to tally. Our questions to the company secretary of Baidyanath as well as the minority shareholders Rajesh and Rakesh Sharma were not responded to.

The chart below is being reproduced from the complaint made to the SFIO.

Finally, there have been allegations that Baidyanath is marketing its products through undisclosed channels not reflected in the company's revenue reports. Baidyanath, in response, refuted these claims by asserting that the only official platform for product sales is “Baidyanath.co.in.” A simple online search, however, reveals the existence of several websites bearing Baidyanath’s name and official logo that are apparently involved in the distribution of the company’s products – these include “baidyanath.com,” “baidyanath.net.in,” and “baidyanathayurved.com.”

It is understood that the complainants have filed first information reports (FIRs) against the representatives of Baidyanath with the Rajasthan Police.

Detailed questionnaires were sent to one of the complainants, Rajesh Sharma, and Uma Shankar Gutgutia, company secretary of Shree Baidyanath Ayurved Bhawan Private Limited to their email addresses, on the afternoon of October 19.

Yadvendra Sharma, who is the son and nephew of the two complainants, Rajesh and Rakesh Sharma, in the case against Baidyanath, replied to their questionnaires and revealed that they had lodged an FIR in Jaipur against Umashankar Gutgutia. The F.I.R dated 28/06/2023, a copy of which has been provided to the writers of this report, mentions charges, such as cheating and criminal conspiracy.

Yadavendra also wrote in his reply, “Mr Gutgutia said that our complaint was a civil dispute and that we had no inheritable rights based on the board meetings’ minutes. The minutes showed that Late Mr Hazari Lal Sharma (our father) was owed a huge sum by the company, which was deleted from the records after he passed away and his legal heirs were not paid. This was a criminal offence and not a civil dispute.”

The writers have not received any reply from Gutgutia or any other Baidyanath representatives. The article will be updated if they get any responses.

The writers are independent journalists.