LOIL GROUP - 3rd Largest NSEL Defaulter

LAKSHMI OVERSEAS INDUSTRIES LIMITED (LOIL GROUP)

Located in Punjab, Lakshmi Overseas Industries Limited (LOIL) Group is promoted by Balbir Singh Uppal.  Initially the company was incorporated under the name of Lakshmi Grain Processors Private Limited. Later, the Company was converted into Public Limited Company in 1993 and consequently the name was changed to Lakshmi Grain Processors (India) Ltd. Further the  company got its new name i.e. Lakshmi Overseas Industries Ltd (LOIL).

LOIL Group is the third largest NSEL Defaulter, owing Rs. 757 crores to National Spot Exchange Ltd (NSEL).  LOIL Foods Ltd and LOIL Health Foods Ltd, were incorporated on December 15, 1999, while LOIL Continental Foods Ltd incorporated on August 6, 1999 are the subsidiary firms of LOIL Group. As per media reports, LOIL Overseas Foods Ltd owes Rs 93 crore, LOIL Health Foods Ltd owes Rs 298 crore and LOIL Continental Foods Ltd owes Rs 366 crore in the NSEL crisis.

In November 2013, the Economic Offences Wing (EOW) of Mumbai police had issued summons to LOIL director Balbir Singh Uppal as part of the probe into the NSEL crisis, but to no avail. The Economic Offences Wing (EOW) of  Mumbai Police had disclosed that it had frozen bank accounts worth Rs 1.1 crore and seized immovable assets worth Rs. 559 crore of the Lakshmi Overseas Industries Limited (LOIL) group chaired by Balbir Singh Uppal as part of its probe into the Rs. 5,600 crore commodities exchange crisis.

Details of several properties of LOIL Group which are secured for attachment by EOW, Crime Branch, CID, Mumbai Police are mentioned on the Exchange website. Some of the Groups assets includes five flats in posh localities of south Delhi, two shops in Naya Bazaar and an office on Kasturba Gandhi Marg in Delhi, besides the entire Laxmi Complex having rice mills and a captive power plant at Khamano on the Ludhiana National Highway.

N. K. Proteins - Largest NSEL Defaulter

        In 1992, established as ‘Maruti Proteins Ltd.’, today the company stands as ‘N.K. Proteins Ltd.’ in the business market and the brand is called as ‘Tirupati’ across India. N.K.Proteins Ltd. started its journey by Edible Oil Industry with Nilesh Patel, being the Managing Director is closely involved in the material aquirement process as one of the core areas for a company dealing in the Edible Oil Industry.

        Gujarat based N. K. Proteins is declared as the largest NSEL Defaulter owing Rs. 969 Cr. to NSEL investors. Due to which Nilesh Patel, the company’s promoter, was arrested by the Economic Offenses Wing (EOW) of the Mumbai Police for being the largest NSEL Defaulter in the Rs. 5,600 Cr. NSEL crisis. Later, Nilesh Patel was released on bail. As EOW’s investigation moved forward, they established that the owners of the Tirupati brand of cooking oil, N.K. Proteins, diverted the funds that were raised on NSEL in a branch of Tirupati in Ahmedabad, which is promoted by Darshan Baldevbhai Patel of N.K. Corporation, who is also cousin of Nimish Patel, strongly opposed by the EOW.

        According to an ED order, the agency has seized movable and immovable properties of NK Proteins in Mumbai, Noida, Ahmedabad and Palanpur in Gujarat under the criminal provisions of the Prevention of Money Laundering Act (PMLA). The Enforcement Directorate (ED) has attached assets worth Rs 18.1 crore of N. K. Proteins in connection with its money laundering probe in the National Spot Exchange Limited (NSEL) crisis case. ED Mumbai has also attached commercial property under PMLA in Ahmedabad worth Rs 14.22 crore of N K Protein in NSEL crisis along with some offices, valued at Rs 14.22 crore in a commercial complex in Ahmedabad.

INFLATION

Inflation

Inflation is an Economic theory where prices of goods, commodities and services go up over the time. Inflation decreases the worth of money. In India, Inflation is calculated through Wholesale Price Index (WPI) which is created by Central Statistical Organization. It consists of all the important goods traded in the wholesale market. There are two main types of inflation:

·         Demand pull inflation - this occurs when the economy grows quickly and starts to ‘overheat’ where Aggregate demand (AD) will increase faster than Aggregate supply (AS).

·        Cost push inflation - It occurs when there is an increase in the cost of production of goods and commodities.

Increase in demand and decrease in supply leads to inflation. The two main factors responsible for inflation are:

·         Demand Factor – it occurs in a condition where the aggregate demand in the economy has exceeded the aggregate supply. Therefore, due to scarcity in supply the price of the commodity rises.

·         Supply Factor – it is an important factor responsible for inflationary pressure in India. The high cost of labor eventually increases the production cost and leads to a high price for the commodity. The damage in transport of goods creates a scarcity, resulting in price hike.

Inflation is a rise in the price level of goods and services. People staying below poverty line have to struggle to fulfill their basic requirements. Due to which, some have to starve for many days. As a result, children below poverty line are malnourished. Whereas, people belonging to the middle-class families start planning how they can cope up with their monthly expenditures, with limited wages and rising prices of goods such as milk, vegetables etc.

Therefore, to sum it all up, inflation decreases the worth of the money severely. Inflation is caused by the failure of aggregate supply to equal the increase in aggregate demand. Hence, inflation can be controlled by increasing the supply in order to control aggregate demand.