Korean Firm That Pledged To Invest Rs 90,000 Cr In UP Has Annual Revenue Of Just Rs 13 Cr

In February, the Yogi Adityanath-led government hosted the Uttar Pradesh Investor summit where, as claimed by the chief minister, businesses pledged about Rs 4 lakh crore worth projects via Memorandums of Understanding (MoUs).

Investment of Rs 4,28,000 Crore have been approved in the summit. I am pleased to announce that we have the proposal of further investment of Rs 4 Lakh Crore in the state: UP CM Yogi Adityanath at #UPInvestorsSummit pic.twitter.com/dXkHZDe2aY

— ANI UP (@ANINewsUP) February 22, 2018

Out of all the business that promised to invest in Uttar Pradesh, one name stood out – Korea-based WorldBestech that pledged Rs 90,000 crore, which is around 20% of the total MoUs signed in the summit.

“We shall set up gas-based power plant and allied companies in Mathura that would also solve the problem of potato growers of Mathura and adjoining districts,” said the company’s CEO and president K K Kim while briefing Adityanath on the investment plans, reported PTI.

In its website, Seoul-based WorldBestech describes itself as a company that specialises in cooling systems used in rooftops of factories. It plans to invest the Rs 90,000 crore in projects like gas power plant, food processing ventures and cold storage, said the company’s CEO.

On February 24, WorldBestech officials were also called for a meeting with the CM in Lucknow. Adityanath told the Korean investor that the state would provide all possible assistance and they should go ahead with the plans. Furthermore, the CM directed state power minister Srikant Sharma to provide assistance to WorldBestech.

Rs 90,000 pledged by a Rs 13 crore firm?

An investigation by NDTV revealed that WorldBestech’s annual revenue is between Rs 6.5 to 13 crore.

However, UP government officials refused to share any details with the media house – how was the company contacted, how did they attend the summit, what was in the MoU signed.

An investigation by NDTV journalist Manas Pratap Singh found that the company has some big clients, including Hyundai, in Korea. But he could not find details of its financial capabilities on its website. The media house then contacted a firm that gives out details of Korean traders. It was revealed to NDTV that WorldBestech was established in 2000 (the company’s website says “since 1995”), has 11 to 50 employees and an annual revenue of $1 to 2 million (or Rs 6.5 to 13 crore).

“The Korean firm appears to have an Indian subsidiary based in Pune with whom the parent company appears to have had legal troubles,” reported Srinivasan Jain of NDTV. The annual report of the Indian subsidiary filed in 2016 says that the auditors have expressed concerns over the legal action initiated by WorldBestech against the Indian subsidiary in the Company Law Board.

When NDTV contacted the Indian subsidiary, their phone call was disconnected. Another NDTV journalist Saurabh Gupta paid a visit to the company in Pune, finding its address in a number of trade websites of the company. He found that the location of the company now houses a gym.

The person working in the gym told Gupta that the company has not been functioning in the location for at least two years. Although, he was unaware where it has shifted to.

UP government’s response

After multiples attempts of contacting Uttar Pradesh officials, NDTV spoke to the Industrial Development minister Satish Mahan who told them that he had never heard of the MoU signed between the UP government and the Korean company. He added that the highest amount invested by any business was Rs 35 to 40,000 crore by the Adani Group.

“There are several who signed MoUs with the government. Now we are asking these companies to send project profiles and detailed project reports. We have told everyone to send these requirements,” said Mahan.

“An MoU is signed when a company merely shows interest. We later look into the details of all companies and provide on-ground help to the genuine ones. It is not possible for us to do a background check on every company at the time of signing the MoU,” he added.

When asked if the companies are vetted or not before being allowed to attend the investor summit, Mahan said to NDTV that this happens in due process after the MoUs are signed.

The minister’s justification might be reasonable, but it leaves two questions unanswered – 1) If the scrutiny is done after MoUs are signed, on what basis did Chief Minister Yogi Adityanath tweet that businesses pledged Rs 4 lakh crore in UP?; 2) Did the UP government not discover the truth about WorldBestech in the two meetings between its CEO with Adityanath?