Indo Asian News Service, 1.76 Lakh crores (40 billions dollars) loss in recent 2G scam
Raja ignored PM advice on 2G, cost Rs.1.76 lakh crore: Auditor
posted 2 mnths ago – by sulekha news | 24 Views | View Source: Indo Asian News Service
New Delhi, Nov 16 (IANS) In the most serious indictment on the 2G-spectrum scam, India’s official auditor Tuesday said former communications minister A. Raja even ignored Prime Minister Manmohan Singh’s advice and allotted radio frequency to new telecom players at low prices, resulting in a huge revenue loss of Rs.1.76 lakh crore (nearly $40 billion).
In a 96-page report, including annexures tabled in parliament, the Comptroller and Auditor General (CAG) said the presumptive loss to the exchequer through spectrum allocation to 122 licencees and 35 dual technology licences in 2007-08 was Rs.1,76,645 crore.
‘The entire process of spectrum allocation was undertaken in an arbitrary manner,’ said the report, adding the loss was arrived at on the basis of the 3G auction earlier this year that fetched the government Rs.67,500 crore (around $15 billion).
The report was tabled in the Lok Sabha by Minister of State for Finance S.S. Palanimanickam, who belongs to Raja’s party DMK. In the Rajya Sabha, it was tabled by his colleague Minister of State for Finance Namo Narayan Meena.
The audit report, also sought to give a clean chit to the ministries of finance and law and justice — as also the Prime Minister’s Office — saying the telecom minister had brushed aside their advice as well.
‘The entire process of allocation of unified access service licences lacked transparency and was undertaken in an arbitrary, unfair and inequitable manner,’ said the damning report that was brushed aside later by Raja, who continued to say he had done no wrong.
‘The prime minister had stressed on the need for a fair and transparent allocation of spectrum, and the ministry of finance had sought for the decision regarding spectrum pricing to be considered by an empowered group of ministers,’ said the report.
‘Brushing aside their concerns and advices, the Department of Telecommunications in 2008 proceeded to issue 122 new licences for 2G spectrum at 2001 prices, by flouting every cannon of financial propriety, rules and procedures.’
At a press conference later, when Deputy Comptroller and Auditor General Lekha Gupta was asked on what basis the various ministries, the prime minister and the federal cabinet as a whole were absolved, she said there was no such attempt.
‘We have not given a clean chit to anybody. We have only based our report on the basis of documents at our disposal,’ Gupta said, adding even the cut-off date for receipt of applications was advanced arbitrarily.
Raja, who resigned Sunday in the wake of the controversy, said the government’s stand was spelt out in an affidavit filed before the Supreme Court, which was hearing the matter, and that he could not comment any further as the case was sub judice.
‘Let the law take its course. I have put up my defence before the Supreme Court. My conscience is clear,’ he said, adding: ‘I did everything according to the recommendations by the telecom regulator.’
After adamantly refusing to resign, Raja quit the cabinet late Sunday night over the 2G spectrum controversy, ending an opposition-Congress standoff that, however, continues to paralyse parliament.
Even two days after Raja’s resignation, the opposition continued to demand a probe by a joint parliamentary committee, resulting in the adjournment of both houses of parliament Monday and on several occassions a day later.
The government, so far, has rejected the opposition demand.
THE HINDU, Dec 6, 2010
Perils of becoming a republic of scandals
India now is witnessing not mere corruption but national plunder.
Brahma ChellaneyT+ · T-
The Hindu India’s situation is best explained by an ancient proverb, “A fish rots from the head down.” When the head is putrid, the body politic cannot be healthy. And when those at the helm remain wedded to grand corruption, clerks or traffic police cannot be singled out for taking small bribes.
Corruption, No. 1 national security threat, is eating into the vitals of the state, enfeebling internal security and crimping foreign policy.
India confronts several pressing national security threats. But only one of them – political corruption – poses an existential threat to the state, which in reality has degenerated into a republic of mega-scandals. The pervasive misuse of public office for private gain is an evil, eating into the vitals of the state, sapping India’s strength. When important decisions, from arms procurement to policy changes, are often tainted by corrupt considerations, it is inevitable that national security will get compromised. If India today is widely seen as a soft state, much of the blame must be pinned on the corrupt and the compromised that lead it. Such ‘softening’ of India has made the country a tempting target for those seeking to undermine its security.
India’s situation is best explained by an ancient proverb, “A fish rots from the head down.” When the head is putrid, the body politic cannot be healthy. And when those at the helm remain wedded to grand corruption, clerks or traffic police cannot be singled out for taking small bribes. In fact, it is the self-perpetuating cycle of corruption at all government levels – federal, State and local – that has turned internal security into India’s Achilles heel. As the then Chief Justice of India pointed out last year, the plastic explosives employed in the deadly 1993 Mumbai bombings had been smuggled into the country due to local corrupt practices.
But it is the institutionalised corruption in high office that is eviscerating the republic. When domestic policy is seriously stained by corruption, foreign policy can hardly be dynamic and proactive.
Such is the weakening of the state that India did a better job warding off regional security threats when it was economically weak – like during Indira Gandhi’s reign – than it is able to do today, despite nearly two decades of impressive GDP growth. Economic liberalisation, paradoxically, has whetted personal greed and brought in an era of big-bucks corruption, even as a system of arbitrary environmental stoppages and clearances has taken the place of the old “licence-permit raj.”
India now is witnessing not mere corruption but national plunder. The consequence is that it is getting feebler institutionally. Yet scandals remain so recurrent that public ire over any malfeasance is short-lived.
Indeed, one strategy often employed to ease public anger over revelations of a new mega-scandal is to start targeting second-tier corruption selectively. The misuse of government agencies remains rampant.
Corruption scandals now actually resemble television soaps, with engrossing but diversionary plots. To deflect public attention, the focus in the immediate aftermath is always on government processes related to probing a scandal, not on opening judicial paths to identify the real beneficiaries and quickly recover the loot. The latest scandal over the government’s allotment of second-generation telecom spectrum in 2008 falls in the same category, although the putative loss to the national treasury has been estimated at $39 billion, or 14.3 per cent of India’s total current external debt. The sheer scale of this kickback scandal indicates that multiple political interests must have had a hand in the till. If there is any good news, it is the belated appointment of a clean professional as Telecom Minister.
Make no mistake: The spiriting away of billions of dollars to international financial safe havens constitutes more than criminal wrongdoing. When economic contracts are signed or policy decisions taken so as to net handsome kickbacks, it constitutes a flagrant assault on the national interest. India ranks among the top countries whose stolen national wealth is stashed away in Swiss bank accounts. Yet no Indian politician has ever been convicted and hanged for waging such war on the state.
Let’s be clear: Corruption stalls development, undermines social progress, undercuts the confidence of citizens in the fairness and impartiality of public administration, impedes good governance, erodes the rule of law, distorts competitive conditions in business transactions, discourages domestic and foreign investment, fosters a black market economy, and raises new security threats. In sum, corruption obstructs a country from realising its goals and undercuts national security.
The cancer of corruption in Indiahas alarmingly spread to elements within the two institutions that are central to the country’s future – the judiciary and the armed forces. Recent revelations have highlighted the deep corporate penetration of the major political parties and the manner big business influences policymaking and media coverage. The rot in the media – the nation’s supposed watchdog – stands exposed. In fact, even the integrity of the national Padma awards has been badly vitiated.
But nothing illustrates the corrosive effects of the culture of corruption better than the palpable decay of state capacity. India’s economic dynamism is rooted in its private sector-led growth. But in stark contrast to China, India does poorly wherever the state is involved. The deterioration of the state is the principal constraint on India’s ability to secure its interests. That underscores the national-security costs of widespread corruption.
Today, a self-advertised “incredible India” has no articulated national security strategy, or a defined defence policy, or a declared counterterrorism doctrine, yet it is the only large country dependent on other powers to meet basic defence needs. Instead of seeking to build a first-rate military with strategic reach and an independent deterrent, India has allowed itself to become a money-spinning dumping ground for weapons it can do without. As a result, India has emerged as the world’s top arms importer in the past decade, even as its capacity to decisively win a war erodes.
The defence of India indeed has turned into an unending scandal. Even indictments by the Comptroller and Auditor-General (CAG) have made little difference to the manner arms continue to be procured from overseas. Such imports, often clinched without transparency or open bidding, are a major source of political corruption. India shows that the more corrupt a system, the greater will be will be its corrupting power. A corrupt system quickly corrupts those who enter it, fixating them on the lure of kickbacks and on amassing pelf. Such metastasising corruption cannot be controlled simply by public funding of political parties. After all, much of the big-bucks corruption is designed to line one’s pocket, with no seeming limit to personal greed. In fact, the series of scandals during the Atal Bihari Vajpayee-led government – from bribery-influenced arms imports and $1-billion urea contract with Oman to the loss of hundreds of millions of dollars to the state in allowing private mobile telephone operators to shift from fixed licence fees to revenue sharing – served as a reminder of the growing concentration of powers in a few hands and the consequent disdain for integrated, holistic policymaking.
As in other national security challenges, the principal causes of rampant corruption are leadership deficit and governance deficit. The only way corruption can be contained is through integrity of leadership; improved governance; measures to ensure fiscal transparency; strengthened anti-bribery enforcement; government accountability; and active public involvement. The independence of investigating agencies is a prerequisite for developing an anti-corruption culture in politics and business. Yet in India, these agencies are controlled by those whom they are supposed to keep in check or investigate when a scandal unfolds. Even the vigilance system lacks autonomy and is open to manipulation. With corruption, nepotism and cronyism now endemic, Indian politics has become the safe, fast track to wealth. India freed itself from British colonialism only to come in the grip of an indigenous political class ruling the country on colonial-style principles and still functioning from colonial-era structures. It may take a second war of independence for India to gain true freedom from exploitation and pillage.
(Brahma Chellaney is the author, most recently, of Asian Juggernaut – HarperCollins USA, 2010.)
‘Swiss black money can take India to the top’
March 31, 2009 19:41 IST
Indian money stashed in the Swiss Bank has become a focal point of debate, especially after the Leader of Opposition and the Bharatiya Janata Party’s [ Images ] prime ministerial candidate L K Advani [ Images ] raised the issue on Sunday. If elected, the BJP has vowed to bring the black money back home. Though the Congress dismissed the idea, the Swiss bank issue is slowly becoming a hot election issue.
In fact the BJP also plans to carry out a mock election across the country on April 6 where people will have to cast their vote indicating whether India [ Images ]n money in Swiss banks should be brought back to India or not.
During his address, Advani said the BJP will form a task force comprising experts to prepare a strategic document for India to recommend ways to get back the national wealth stashed away illegally by corrupt politicians, businessmen and criminal overlords.
One of the names he mentioned in the task force is Professor R Vaidyanathan, Professor of Finance at the Indian Institute of Management, Bengaluru [ Images ].
In this exclusive interview to rediff.com‘s Vicky Nanjappa, Vaidyanathan explains in detail the importance of bringing back the ill-gotten wealth and how the money got there in the first place.
Firstly how much Indian money do you think is stashed away in the Swiss Banks?
In 2006, the most recent Global Financial Integrity study, developing countries lost an estimated $858.6 billion (about Rs 43 lakh crore) to $1.06 trillion (abot Rs 51 lakh crore) in illicit financial outflows. Even at the lower end of the range of estimates, the volume of illicit financial flows coming out of developing countries increased at a compound rate of 18.2 percent over the five-year period analysed for the study. On average, for the five-year period of this study, Asia accounts for approximately 50 percent of overall illicit financial flows from all developing countries.
This report shows that the average amount stashed away from India annually during 2002-06 is $27.3 billion (about 136,466 crore). It means that during the five-year period the amount stashed away is 27.3×5=136.5 billion (about 692,328 crore). It is not that all these amounts went to Swiss banks. It has gone to different tax and secret shelters. The share of Swiss banks in dirty money being a third of the global aggregate, some $45 billion out of the 136.5 billion stashed away from India would have been hoarded in these years in Swiss banks.
The important point is that this is only for five years. More amounts were stashed away during the Nehruvian regime. So the loot for 55 years will be several times higher. In fact, in those days the rupee commanded a better value per dollar. So fewer rupee could get more dollars. So the estimation that the Indian money stashed away may be of the order of $1.4 trillion (about Rs 71 lakh crore).
On what basis have you come to this conclusion?
There is a lot of literature available as to how to estimate the illicit financial flow from developing countries. We find out what the nature of the flow is. I have also relied upon the study Illicit Financial Flows from Developing Countries: 2002-2006 Global Finanacial Intergrity authored by Dev Kar and Devon-Cartwright Smith, a project of the Ford [ Images ] Foundation. Financial flows in the context of this report includes the proceeds from both illicit activities such as corruption (bribery and embezzlement of national wealth), criminal activity, and the proceeds of ilicit business that become illicit when transported across borders in contravention of applicable laws and regulatory frameworks (most commonly in order to evade taxes).
Which are the various tax havens, where the ill-gotten wealth of Indian businessmen and politicians are stashed?
There are presumably more than 70 tax havens in the world. Indian wealth could be more in Switzerland [ Images ] and various British /US islands. At least 40 countries market themselves aggressively as tax havens [Source: Internal Revenue Service USA on Abusive Off-shore Tax Avoidance schemes Talking Points Jan 2008]. The well-known tax havens are Switzerland/ Liechtenstein/Luxemburg/ Channel Islands etc.
Could you elaborate and tell us how the money got there in the first place?
There are several methods/reasons. Under invoicing/over invoicing of exports and imports and getting the balance stored abroad. Kickbacks from major defense/civilian contracts. Not bringing the earnings abroad. In the old days smuggling of gold and illegal money. Transactions done abroad and not reported here. Hawala funds. Funds earned by artists/ entertainment industry /sports people and stashed abroad. When you want to indulge inadharma, hundreds of ways are open!
We would like to know the terror connection. Do you think even terrorists are stashing away cash and using the tax haven route to send across money all over the world, to finance their activities?
M K Narayanan, our National Security Advisor, has spoken about it in Berlin recently.
Advani says that it is important to bring this money back. How can the government go about it and what are the various ways in which India can get its money back?
Put it on the Global Agenda. Put it in G-20. Put it in the International Monetary Fund. Put it inEgmont Group. Also take a lead among all developing countries. Support US /German/French efforts.
If India decides to take the initiative, will the Swiss authorities cooperate?
It is not due to our pressure but that of US which will make them co-operate. When a family is in deep financial crisis then it tries to look at the small amount saved under the sugar jar by grandma. Same way developed economies are desperate for every dollar. Even if we do not act due to their efforts the list of crooks may be out, then we will be in a dangerous social situation since the who’s who of India will be there. Instead we should get it and get the funds and decide on the steps to sterilise it. Otherwise, the world will laugh at us.
Politicians sure must be having a lot of money in Swiss Banks. Do you think this factor will deter the government from acting?
Public pressure will make them do it. Plus, the evolving global situation against tax havens. The money belongs to the poor farmers and unorganised workers of India. Also, Indian businessmen have a lot of their ill-gotten gains in these banks. The world situation is such that Indian businessman will want to bring it back now given the attractive returns in India.
Do you think that the Indian government should demand all the Indian black money in Swiss banks?
Of course. India should and must act. We are not a banana republic.
You wrote in your column that the German foreign intelligence agency BND got names of 1,400 clients of the Liechtenstein-based LTG bank who were supposed to be suspected tax evaders. Of the 1,400, 600 were supposed to be Germans. Do you think of the remaining there will be Indians as well? Has the Indian government approached the German government for the list?
Indian names will be there. Our tax evaders and crooks are like the omnipresent Maha Vishnu [ Images ] — present in all continents and all tax havens. But our government has been lukewarm in this issue. It should have despatched immediately senior officials to get the names.
Isn’t it important to tackle the issue of domestic black money?
It is definitely important. At least the domestic black money is used in our economy and to that extent it is productive. But the money kept in Swiss banks is neither useful to India nor does it benefit Indians.
What role should the media play?
The media has a very important role to play. At the moment it seems like most part of the media is more interested in the diet of an actress. Pressure by the media needs to be built up on this issue and remember that a lot of Indians don’t just go to Switzerland to ski.
What about the names of these persons?
India must try and get the names. But more importantly should get the money back. It should be top on the agenda and India ought to take a moral lead in this issue.
Will the Indian economy improve if the money is brought back?
It will do phenomenally. India will be in the top five league if all the ill-gotten money is brought back. It will change the Indian scenario and I have been saying this since 1993.
Do you think that these people will now try and pull out the money since this issue has become a hot topic?
I don’t think so. If they do then India should create an instrument and regulate frameworks to bring the money back.
What kind of punishment do you suggest for these persons?
Punishment is not the issue now. There is a need to create fear in them and follow what the international community does on this issue.
Lastly do you think this is becoming just another election issue?
The US and Germany [ Images ] took the lead and there is no election there. We should not treat this as an election issue. We have to take up this matter and if we don’t then we will become a laughing stock of the entire world.
India, Republic Of Scams
The latest issue of India Today (January 3, 2010) carries an interesting cartoon by Ravi Shankar with an amount boldly inscribed at the top : Rs.176, followed by eleven zeroes. The main cartoon shows Dr. Manmohan Singh and Sonia Gandhi declaring “We have ZERO tolerance for corruption!” and some minions of theirs declaring “We can tolerate many more zeros….”
The total scam money lost by the Bhaaratiya government treasury is approximate 73 Lakh Crore and could be more during the last two decades. Here is glimpse of some major scams of this period.
Republic Of Scams
Total Scam Money (approx) Since 1992:
Rs. 73000000000000 Cr.
(73 Lakh Crore)
Hard to digest ?
Just check the below given details
1992 -Harshad Mehta securities scam Rs 5,000 cr
1994 -Sugar import scam Rs 650 cr
1995 -Preferential allotment scam Rs 5,000 cr
Yugoslav Dinar scam Rs 400 cr
Meghalaya Forest scam Rs 300 cr
1996: -Fertiliser import scam Rs 1,300 cr
Urea scam Rs 133 cr
Bihar fodder scam Rs 950 cr
1997 -Sukh Ram telecom scam Rs 1,500 cr
SNC Lavalin power project scam Rs 374 cr
Bihar land scandal Rs 400 cr
C.R. Bhansali stock scam Rs 1,200 cr
1998 -Teak plantation swindle Rs 8,000 cr
2001 -UTI scam Rs 4,800 cr
Dinesh Dalmia stock scam Rs 595 cr
Ketan Parekh securities scam Rs 1,250 cr
2002 -Sanjay Agarwal Home Trade scam Rs 600 cr
2003 -Telgi stamp paper scam Rs 172 cr
2005 -IPO-Demat scam Rs 146 cr
Bihar flood relief scam Rs 17 cr
Scorpene submarine scam Rs 18,978 cr
2006 -Punjab’s City Centre project scam Rs 1,500 cr,
Taj Corridor scam Rs 175 cr
2008 -Pune billionaire Hassan Ali Khan tax default Rs 50,000 cr
The Satyam scam Rs 10,000 cr
Army ration pilferage scam Rs 5,000 cr
The 2-G spectrum swindle Rs 60,000 cr
State Bank of Saurashtra scam Rs 95 cr
Illegal monies in Swiss banks, as estimated in 2008 Rs 71,00,000 cr
2009: -The Jharkhand medical equipment scam Rs 130 cr
Rice export scam Rs 2,500 cr
Orissa mine scam Rs 7,000 cr
Madhu Koda mining scam Rs 4,000 cr”
SC refuses to quash PIL against Mayawati in Taj corridor scam
Orissa mine scam could be worth more than Rs 14k cr
CORRUPTION, MONEY LAUNDERING SCAM, Koda discharged from hospital, arrest imminent
‘A Cover-Up Operation’:
“It’s a scam involving close to Rs 60,000 crores”
Spectrum scam: How govt lost Rs 60,000 crore
India’s biggest scams 1, Ramalinga Raju, Rs. 50.4 billion
India’s biggest scams 2, Harshad Mehta, Rs. 40 billion
India’s biggest scams 3, Ketan Parekh, Rs. 10 billion
India’s biggest scams 4, C R Bhansali, Rs. 12 billion
India’s biggest scams 5, Cobbler scam
India’s biggest scams 6, IPO Scam
India’s biggest scams 7, Dinesh Dalmia, Rs. 5.95 billion
India’s biggest scams 8, Abdul Karim Telgi, Rs. 1.71 billion
India’s biggest scams 9, Virendra Rastogi, Rs. 430 million
India’s biggest scams 10, The UTI Scam, Rs. 320 million
India’s biggest scams 11, Uday Goyal, Rs. 2.1 billion
India’s biggest scams 12, Sanjay Agarwal, Rs. 6 billion
India’s biggest scams 13, Dinesh Singhania, Rs. 1.2 billion
1, Jeep Purchase (1948) :- Free India’s corruption graph begins. V. K. Krishna Menon, then the Indian high commissioner to Britain, bypassed protocol to sign a deal worth Rs 80 lakh with a foreign firm for the purchase of army jeeps. The case was closed in 1955 and soon after Menon joined the Nehru cabinet.
2, Cycle Imports (1951) :- S.A. Venkataraman, then the secretary, ministry of commerce and industry, was jailed for accepting a bribe in lieu of granting a cycle import quota to a company.
3, BHU Funds (1956) :- In one of the first instances of corruption in educational institutions, Benaras Hindu University officials were accused of misappropriation of funds worth Rs 50 lakh.
4, MUNDHRA SCANDAL (1957):- It was the media that first hinted there might be a scam involving the sale of shares to LIC, Feroz Gandhi sources the confidential correspondence between the then Finance Minister T.T. Krishnamachari and his principal finance secretary, and raised a question in Parliament on the sale of ‘fraudulent’ shares to LIC by a Calcutta-based Marwari businessman named Haridas Mundhra. The then Prime Minister, Jawaharlal Nehru, set up a one-man commission headed by Justice M.C.Chagla to investigate the matter when it becomes evident that there was a prima facie case. Chagla concluded that Mundhra had sold fictitious shares to LIC, thereby defrauding the insurance behemoth to the tune of Rs. 1.25 crore. Mundhra was sentenced to 22 years in prison. The scam also forced the resignation of T.T.Krishnamachari.
6, Teja Loans (1960):- Shipping magnate Jayant Dharma Teja took loans worth Rs 22 crore to establish the Jayanti Shipping Company. In 1960, the authorities discovered that he was actually siphoning off money to his own account, after which Teja fled the country.
7, Kairon Scam (1963):- Pratap Singh Kairon became the first Indian chief minister to be accused of abusing his power for his own benefit and that of his sons and relatives. He quit a year later.
8, Patnaik’s Own Goal (1965) :- Orissa Chief Minister Biju Patnaik was forced to resign after it was discovered that he had favoured his privately-held company Kalinga Tubes in awarding a government contract.
9, Maruti Scandal (1974) :- Well before the company was set up, former Prime Minister Indira Gandhi’s name came up in the first Maruti scandal, where her son Sanjay Gandhi was favoured with a license to make passenger cars.
10, Solanki ExposÃ© (1992) :- At the World Economic Forum, Madhavsinh Solanki, then the external affairs minister, slipped a letter to his Swiss counterpart asking their government to stop the probe into the Bofors kickbacks. Solanki resigned when India Today broke the story.
11, Kuo Oil Deal (1976):- The Indian Oil Corporation signed an Rs 2.2-crore oil contract with a non-existent firm in Hong Kong and a kickback was given. The petroleum and chemicals minister was directed to make the purchase.
12, Antulay Trust (1981) :- With the exposure of this scandal concerning A.R. Antulay, then the chief minister of Maharashtra, The Indian Express was reborn. Antulay had garnered Rs 30 crore from businesses dependent on state resources like cement and kept the money in a private trust.
13, HDW Commissions (1987) :- HDW, the German submarine maker, was blacklisted after allegations that commissions worth Rs 20 crore had been paid. In 2005, the case was finally closed, in HDW’s favour.
14, Bofors Pay-Off (1987) :- A Swedish firm was accused of paying Rs 64 crore to Indian bigwigs, including Rajiv Gandhi, then the prime minister, to secure the purchase of the Bofors gun.
15, St Kitts Forgery (1989) :- An attempt was made to sully V.P. Singh’s Mr Clean image by forging documents to allege that he was a beneficiary of his son Ajeya Singh’s account in the First Trust Corp. at St Kitts, with a deposit of $21 million.
16, Airbus Scandal (1990) :- Indian Airlines’s (IA) signing of the Rs 2,000-crore deal with Airbus instead of Boeing caused a furore following the crash of an A-320. New planes were grounded, causing IA a weekly loss of Rs 2.5 crore.
17, Securities Scam (1992) :- Harshad Mehta manipulated banks to siphon off money and invested the funds in the stock market, leading to a crash. The loss: Rs 5,000 crore.
18, Indian Bank Rip-off (1992) :- Aided by M. Gopalakrishnan, then the chairman of the Indian Bank, borrowers-mostly small corporates and exporters from the south-were lent a total of over Rs 1,300 crore, which they never paid back.
19, Sugar Import (1994) :- As food minister, Kalpnath Rai presided over the import of sugar at a price higher than that of the market, causing a loss of Rs 650 crore to the exchequer. He resigned following the allegations.
20, MS SHOES SCAM (1994) :- Anyone who war old enough in 1994 to read will remember the advertisements- tens of them intriguingly headlined: ‘Who is Pawan Sachdeva?’ For the record, it was the peak of the public issued-led advertising boom and the ads were created by the Delhi branch of Rediffusion. Sachdeva, the promoter of MS Shoes, allegedly used company funds to buy shares (of his own company) and rig prices, prior to a public issue. He is alleged to have colluded with officials in the Securities Exchange Board of India (SEBI) and SBI Caps, which lead-managed the issue, to dupe the public into investing in his Rs. 699-crore public-***-rights issue. Sachdeva was later acquitted
21, JMM Bribes (1995) :- Jharkhand Mukti Morcha leader Shailendra Mahato testified that he and three party members received bribes of Rs 30 lakh to bail out the P.V. Narasimha Rao government in the 1993 no-confidence motion.
22, In a Pickle (1996) :- Pickle baron Lakhubhai Pathak raised a stink when he accused former Prime Minister P.V. Narasimha Rao and godman Chandraswami of accepting a bribe of Rs 10 lakh from him for securing a paper pulp contract.
23, Telecom Scam (1996) :- Former minister of state for communication Sukh Ram was accused of causing a loss of Rs 1.6 crore to the exchequer by favouring a Hyderabad- based private firm in the purchase of telecom equipment. He, along with two others, was convicted in 2002.
24, Fodder Scam (1996) :- The accountant general’s concerns about the withdrawal of excess funds by Bihar’s animal husbandry department unveiled a Rs 950-crore scam involving Lalu Prasad Yadav, then the state chief minister. He resigned a year later.
25, Urea Deal (1996) :- C.S. Ramakrishnan, MD, National Fertiliser, and a group of businessmen close to the P.V. Narasimha Rao regime fleeced the government and took Rs 133 crore from the import of two lakh tonne of urea, which was never delivered.
26, Hawala Diaries (1996) :- The scandal surfaced following CBI raids on hawala operators in Delhi in 1991. But it was S.K. Jain’s diaries that had heads rolling.
27, CRB SCAM (1997) :- Another scam forged by greed and discovered through accident. Chain Roop Bhansali, a smart-talking entrepreneur, created a pyramid financial empire based on high-cost financing. At its peak, his Rs. 1,000-crore financial conglomerate had in its ranks a mutual fund, a financial services company into fixed deposits, and a merchant bank. That Bhansali knew how to work the system became evident when he also managed to secure a provisional banking license. Then his luck ran out. An executive in the State Bank of India Inadvertently discovered that some interest warrants issued by Bhansali were not backed by cash. The bubble finally burst in May 1997, but by that time investors had lost over Rs. 1,000 crore. This was among the first retail scams in India and it was played out, in smaller avatars, across the country-especially in the South where financial services companies promised returns in excess of 20 per cent and decamped with the principal. Bhansali was arrested for a few weeks and released later on bail.
28, MEHTA’S SECOND COMING (1998) :- The Big Bull returned to the bourses. This time, he allegedly colluded with the promoters of BPL, Videocon International, and Sterile Industries to rig the share prices of these companies. The inevitable collapse happened sooner than planned, Harshad Mehta orchestrated a cover-up operation that included a high=jinks effort by officials of Bombay Stock Exchange to (illegally ) open the trading system in the middle of the night to set things right, but the damage had been done. SEBI finally passed its ruling on the scam in 2001, banning the three companies concerned from tapping the market-BPL, for two years. Mehta was debarred for life form dealing in Securities Appellate Tribunal (SAT) in October 2001
29, VANISHING COMPANIES SCAM (1998) :- A passing remark heard by then Finance Minister Palaniappan Chidambaram resulted in a furore over what was badly-kept secret on Dalal street. Chidambaram was told that hundreds of companies had disappeared after raising moneys form the public. An informal scrutiny revealed that perhaps over 600 companies were missing. Chidambaram ordered a probe by SEBI. The SEBI probe conducted in May 1998 revealed that while many companies are not traded on the bourses at least 80 companies that had rises Rs.330.78 crore were simply missing. Later that year, the Department of Company Affairs (DCA) was asked to probe and penalize these companies. DCA still investigating. Investigations continue to this day.
30, PLANTATION COMPANIES SCAM (1999) :- It was as innovative a swindle as any effected in the world. Savvy entrepreneurs convinced gullible investors that given the right irrigation and fertilizer inputs, teak, strawberries, and anything else that could be grown, would grow anywhere in the country. The promoters could afford to collect money from investors and not worry about retribution (or returns, for that matter). For, plantation companies fell under the purview of neither SEBI nor Reserve Bank of India. Indeed, they didn’t even come under the scope of the Department decided to change things in 1999, enough investors had been gulled: 653 companies, between them, had raised Rs. 2,563 crore from investors. To date, not many investors have got their principals back, just another affirmation of the old saying about money not growing on trees.
31, Match Fixing (2000) :- Mohammed Azharuddin, till then India’s cricket captain, was accused of match-fixing. He and Ajay Sharma were banned from playing, while Ajay Jadeja and Manoj Prabhakar were suspended for five years.
32, KETAN PAREKH SCAM (2001) :- Ketan Parekh’s modus operandi wasn’t very different from Harshad Mehta’s. If Mehta used banker’s receipts, then Parekh used pay orders to ramp up the prices of his favourite scrips (the K-10). Apart from money form the banking system Parekh also rerouted money from corporated like HFCL (Rs. 425 crore), and Zee (Rs. 340 crore) to good effect. He was caught when pay-orders issued by Madhavpura Mercantile Cooperative Bank bounced. Although the total amount involved in the scam was just Rs. 137 crore, the impact was far greater.
Apparently, when a bear cartel sensed Parekh was in trouble, it stepped in and leveraged a dip in the NASDAQ to bear down stock prices. The resultant slump in the markets happened soon after Finance Minister Yashwant Sinha presented what he considered his best budget ever. Under pressure from the government, SEBI investigated the scam and heads began to roll. Among them: the entire management team of BSE, including its president Anand Rathi, CSFB, First Global, and, in an indirect connection, P.S.Subramanyam, the Chairman of UTL Evidently, for the 18 months that PSS was Chairman of UTI, the Trust had mirrored the actions of the bull cartel. The result? When the market tanked, so did the NAV of its holy cow, the US-64.
33, Tehelka Sting (2001) :- Tehelka, an online news portal, used spycams to catch army officers and politicians accepting bribes, in their sting operation called Operation Westend. Investigative journalism turned another corner in the country.
34, Stockmarket Scam (2001) :- The mayhem that wiped off over Rs 1,15,000 crore in the markets in March 2001 was masterminded by the Pentafour bull Ketan Parekh. He was arrested in December 2002 and banned from acccessing the capital market for 14 years.
35, Home Trade Scam (2002) :- Under the pretext of gilt trading, Rs 600 crore was swindled from over 25 cooperative banks in Maharashtra and Gujarat by a Navi Mumbai-based brokerage firm Home Trade. Sanjay Agarwal, CEO of the firm, was arrested in May 2002.
36, Stamp Paper Scam (2003) :- The sheer magnitude of the racket was shocking-it caused a loss of Rs 30,000 crore to the exchequer. Disclosures of the mastermind behind it, Abdul Karim Telgi, implicated top police officers and bureaucrats.
37, Oil-for-Food Scandal (2005) :- K. Natwar Singh was unceremoniously dropped from the Cabinet when his name surfaced in the Volcker Report on the Iraq oil-for-food scam.
Sonia Gandhi and the hidden trail
By John MacLithon
22 Dec 2010
The Indian media has begun even doubting Manmohan Singh’s integrity — mental, at least — as he must have been knowing for nearly two years that the Indian exchequer was defrauded of `1.76 lakh crores. But so far, Sonia Gandhi has been spared.
Yet, if you are an observer of Indian politics, as I have been, since I landed back in India in the early ’Sixties, you have to come to the conclusion that most of the funds of scams end up in the coffers of political parties, particularly of the Congress.
Today the DMK is taking the brunt of the blame, but actually political parties have been forced to follow suit after the grand old party of India’s independence, began using percentages allotted by foreign companies on mega deals, military and otherwise, to secretly fund its election campaigns and give freebies to poor villagers. Of course, Bofors was the first one of the big scams to be uncovered.
I remember in the mid-Eighties a Swiss radio colleague of mine from Radio Suisse Romande, telling me that Amitabh Bachchan’s brother, Ajitabh, (when the Bachchan family was still close to the Gandhis), was one of the first safe keepers of the kickbacks of the Swedish canon makers. Exposes of Swedish newspaper, Dagens Nhyeter further confirmed it, though Ajitabh went to court against them.
There is no doubt, further says my Swiss friend, that part of the Bofors money is still in Switzerland. Indeed, we are all waiting for the Swiss banks to reveal (under US pressure) the names of all the dictators, thieves, dishonest rulers of so many countries in the world, who have stashed their ill-gotten money in UBS bank or Credit Suisse.
Meanwhile, all roads seem to lead to Sonia Gandhi: she is the first Lady of India, although she is a simple MP like hundreds of others, the ultimate arbiter, and nothing of importance is decided without her caveat. The immense power she wields within the Congress cannot be only due to her charisma, of her having the Gandhi name or having brought cohesion in the Congress.
It is also, and perhaps mainly, because she holds the purse strings of tremendous amounts of money.These party funds are overt: all the foundations, Rajiv, Indira, Nehru, etc, which store thousands of crores; and covert, starting with the Bofors scam. Where are the secret bank accounts where the scam money is stored? Under whose names are they operated? How is the money brought back to India? Who will answer all these questions?
We know that Quattrochi, the man who could have spilt the beans, was shamelessly let off the hook, not only by the CBI which today is conducting — two years late — the investigation on the 2G scam, but also by the then law minister who is today the governor who pretends to be after corruption in Karnataka! Not only was Quattrochi
spared, but was allowed to take the money he had looted from India and which was frozen in British banks, so that he would not talk.
Will Raja talk, if he is arrested, as it is rumoured?Surely he knows a lot of secrets,as some of the 2G, Adarsh CWG money, and other unknown scams, must also have gone into the Congress coffers. That is the question that the Congress leadership should debate instead of going after ‘Hindu terror’, a misnomer if there is one.
If you look at statistics for the last 1,000 years, it is Hindus who have been at the receiving end of terror — millions of them have died, including in Kashmir in the late ’Eighties, when Benazir Bhutto launched her ‘Azad Kashmir’ movement (I was there).
Yet Sonia Gandhi remains a mystery for many of us, even for me who has known her for a long time.
I found her quite likable when she was just Rajiv Gandhi’s (the pilot) spouse, a loving wife, who had adopted the Indian way of life; a good daughter -in-law: Indira Gandhi died on her lap on the way to the hospital, after being shot by her Sikh bodyguards; and more than everything, a good mother, who doted on her children and tried allher life to protect them.
I then knew that she had kept her Italian passport, even after taking the Indian nationality (India does not allow you to hold two passports), but I have met quite a few foreigners in Delhi who also retained their origin passports after having obtained the Indian one.
I myself toyed for some time with the idea of taking the Indian nationality, as I speak Hindi quite fluently, but it is too difficult to travel with an Indian passport. I do not mind also her remaining a Christian: after all, I am still one myself. Indeed, one of my Italian journalist friends told me that he prayed with her, along with Rajiv Gandhi, at a mass in Calicut with the bishop officiating — that is
her private business.
But after her husband was blown to pieces by the LTTE, I observed a drastic change in her: she did not seem to trust anybody anymore, became aloof and suspicious. I also
watched with dismay how the Congress leaders, some of them men and women of substance, whom I knew personally, applied pressure on her to enter politics for years.
Furthermore, I thought that in her fortress of Janpath, surrounded twenty-four hours by security, she gradually lost touch with the reality of India. Despite the fact that I met her a few times after Rajiv’s death, I thus took discreetly my distances with her. It is then that I came up with my famous phrase on Sonia, for which she never forgave me: “the moribund and leaderless Congress party has latched on to Sonia Gandhi who is Italian by birth and Roman Catholic by baptism”.
Zero tolerance, secret billions
By S Gurumurthy
02 Jan 2011 11:04:00 PM IST
What was Rajiv Gandhi’s fatal error in politics? It does not need a seer to say that it was his claim to honesty — branding himself as ‘Mr Clean’ — that proved fatal to him. Indira Gandhi was his contrast. Asked about corruption in her government, she said nonchalantly, ‘it was a global phenomenon’. This was in 1983. An honest Delhi High Court judge even lamented how could corruption be controlled when someone holding such a high position had almost rationalised it. The result, no one could ever charge Indira Gandhi with corruption, because she never claimed to be clean. But, ambitious to look ideal, Rajiv proclaimed honesty and so provoked scrutiny; in contrast, Indira, opting to be practical, immunised herself against scrutiny. Eventually, Rajiv’s claim to honesty became the very cross on which he was crucified in the 1989 elections when the Bofors gun shot the Congress out of power. The lesson to the political class was: don’t claim to be honest, if you really are not so. The hard lesson seems forgotten now by the Gandhi family itself. Sonia Gandhi, instead of following Indira’s safe path, is wrongly caught on Rajiv’s risky steps. The consequences seem to be ominous. Will the politics of 1987 to 1989 repeat?
Following Rajiv and forgetting Indira, Sonia Gandhi proclaimed ‘zero tolerance’ to corruption at a party rally in Allahabad in November 2010. She repeated it at the Congress plenary in Delhi weeks later. Asking the cadre to take the corrupt head on, she said that her party was ‘prompt’ in acting against the corrupt; ‘never spared the corrupt’ because corruption impedes development’. This was almost how Rajiv Gandhi spoke in the Congress centenary in Mumbai 25 years ago. Two crucial differences marked Rajiv away from Sonia. First, when Rajiv claimed to be ‘Mr Clean’, he had no scams to defend against. But, Sonia claims to be honest amidst huge and continuing scams — CWG, Adarsh, 2G Spectrum allocation scam…. Next, Rajiv had a clean slate to begin with, with no known skeletons in his cupboard till the Bofors scam smashed his ‘Mr Clean’ image. In contrast, Sonia’s slate is full of credible exposures of bribes and pay-offs in billions of dollars secreted in Swiss bank accounts, not counting Quattrocchi’s millions from Bofors. To make it worse, for almost two decades now, she has not dared to deny the exposures or sue the famous Swiss magazine or the Russian investigative journalist who had put out evidence of bribe against the Sonia family. Seen against this background, Sonia’s vow to act against the corrupt seems like a suspect hooting ‘catch the thief’ and scooting away. This is the main story that unfolds here.
$2.2 billions to 11 billions!
A stunning exposure on Sonia Gandhi’s secret billions in Swiss banks came, surprisingly, from Switzerland itself, where the world’s corrupt stash away their booty. In its issue of November 19, 1991, Schweizer Illustrierte, the most popular magazine of Switzerland, did an exposé of over a dozen politicians of the third world, including Rajiv Gandhi, who had stashed away their bribe monies in Swiss banks. Schweizer Illustrierte, not a rag, sells some 2,15,000 copies and has a readership of 9,17,000 — almost a sixth of Swiss adult population. Citing the newly opened KGB records, the magazine reported ‘that Sonia Gandhi the widow of the former Prime Minister Rajiv Gandhi was controlling secret account with 2.5 billion Swiss Francs (equal to $2.2 billion) in her minor son’s name’. The $2.2 billion account must have existed from before June 1988 when Rahul Gandhi attained majority. The loot in today’s rupee value equals almost Rs 10,000 crore. Swiss banks invest and multiply the clients’ monies, not keep them buried. Had it been invested in safe long-term securities, the $.2.2 billion bribe would have multiplied to $9.41 billion (Rs 42,345 crore) by 2009. If it had been put in US stocks, it would have swelled to $12.97 billion (Rs 58,365 crore). If, as most likely, it were invested in long-term bonds and stocks as 50:50, it would have grown to $11.19 billion (Rs 50,355 crore). Before the global financial meltdown in 2008, the $2.2 billion bribes in stocks would have peaked at $18.66 billion (Rs 83,900 crore). By any calculation the present size of the $2.2 billion secret funds of the family in Swiss banks seems huge — anywhere between Rs 43,000 plus to some Rs 84,000 crore!
The second exposé, emanating from the archives of the Russian spy outfit KGB, is far more serious. It says that the Gandhi family has accepted political pay-offs from the KGB — a clear case of treason besides bribe. In her book The State Within a State: The KGB and its Hold on Russia-Past, Present, and Future, Yevgenia Albats, an acclaimed investigative journalist, says: “A letter signed by Victor Chebrikov, who replaced Andropov as the KGB head in 1982 noted: ‘the USSR KGB maintains contact with the son of the Premier Minister Rajiv Gandhi (of India). R Gandhi expresses deep gratitude for the benefits accruing to the Prime Minister’s family from the commercial dealings of the firm he controls in co-operation with the Soviet foreign trade organisations. R Gandhi reports confidentially that a substantial portion of the funds obtained through this channel are used to support the party of R Gandhi’.” (p.223). Albats has also disclosed that, in December 2005, KGB chief Victor Chebrikov had asked for authorisation from the Central Committee of the Communist Party of the Soviet Union, “to make payments in US dollars to the family members of Rajiv Gandhi, namely Sonia Gandhi, Rahul Gandhi and Ms Paola Maino, mother of Sonia Gandhi.” And even before Albats’ book came out the Russian media had leaked out the details of the pay-offs. Based on the leaks, on July 4, 1992, The Hindu had reported: “the Russian Foreign Intelligence Service admits the possibility that the KGB could have been involved in arranging profitable Soviet contract for the company controlled by Rajiv Gandhi family”.
Rajiv Gandhi’s sad demise delayed the Swiss and Russian exposé on Sonia being picked up here. But Indian media’s interest in it actually coincided with Sonia Gandhi assuming leadership of the Congress. A G Noorani, a well-known columnist, had reported on both Schweizer Illustrierte and Albats’ exposés in Statesman (December 31, 1988). Subramanian Swamy had put out the photocopies of the pages of Schweizer Illustrierte and Albats’ book in his website along with the mail of the Swiss magazine dated February 23, 2002 confirming that in its article of November 1991 it had named Rajiv Gandhi with a total of Swiss Franc 2.5 billion ($2.2 billion) in secret account; it had also offered to supply a original copy of the magazine to Swamy. (See: http://www.janataparty.org/annexures/ann10p43.html) These facts were again recalled in my article in The New Indian Express (April 29, 2009) written in response to Sonia Gandhi speech at Mangalore (April 27, 2009) declaring that, “the Congress was taking steps to address the issue of untaxed Indian money in Swiss banks”. The article had questioned her about her family’s corrupt wealth in Swiss banks in the context of her vow to bring back the monies stashed away abroad. Rajinder Puri, a reputed journalist, has also earlier written on the KGB disclosures in his column on August 15, 2006. Recently, in India Today (December 27, 2010) the redoubtable Ram Jethmalani has referred to the Swiss exposé, asking where is that money now? So the Indian media too has repeatedly published the details of the secret billions of the Gandhi family investigated by the Swiss and Russian journalists. Amal Datta (CPI(M)) had raised the $2.2 billion issue in Parliament on December 7, 1991, but Speaker Shivraj Patil expunged the Gandhi name from the proceedings!
But, what has been the response of Sonia or Rahul, major after June 1988, to the investigation by Schweizer Illustrierte and Albats and to the Indian media’s repeated references to their investigation? It can be summed up in one word: Silence. Thus, apart from the exposés, the deafening silence of the Gandhis itself constitutes the most damaging and self-incriminating evidence of the family’s guilt. When Schweizer Illustrierte alleged that Sonia had held Rajiv Gandhi’s bribes in Rahul’s name in Swiss banks, neither she nor the son, protested, or sued the magazine, then or later; nor did they sue A G Noorani or Statesman when they repeated it in 1998, or later; nor would they sue Subramanian Swamy when he put it on his website in 2002; neither did they sue me, or the Express when the article was carried in April 2009. When major papers, The Hindu and The Times of India included, had carried the expose on KGB payments in the year 1992 itself adding that the Russian government was embarrassed by the disclosures, neither of the Gandhis challenged or sued them; nor did they sue Yevgenia Albats when she wrote about KGB payments to Rajiv Gandhi in 1994. Neither did they act against Swamy when he put Albats’ book pages on his website or when Rajinder Puri, a well-known journalist, wrote about it in his column on August 15, 2006. However, a feeble but proxy suit was filed by Sonia loyalists to defend her reputation when Albats’ exposé was made part of the full-page advertisement in The New York Times in 2007 issued by some NRIs to ‘unmask’ Sonia to the US audience, as they claimed. The suit was promptly dismissed by a US court because Sonia herself did not dare file the suit. Shockingly even that suit did not challenge the $2.2 billion Swiss account at all!
Imagine that the report in Schweizer Illustrierte or in Albats book was false and Sonia Gandhi did not have those billions in secret accounts in Rahul Gandhi’s name or the family was not paid for its service to the KGB as alleged. How would they, as honest and outraged people, have reacted? Like how Morarji Desai, then retired and old at 87, responded in anger when, Seymour Hersh, a Pulitzer Prize-winning investigative journalist, had mentioned in his book that Morarji Desai was a ‘paid’ CIA mole in the Indian Cabinet. Morarji Desai forthwith filed a libel suit. Commenting in The American Spectator, Rael Jean Isaac wrote in 2004, five years after Morarji Desai had passed away, that Hersh habitually indulged in character assassination; and in his attempt to do down Henry Kissinger, Morarji Desai became the victim. Isaac added that Desai, 87, calling it a “sheer mad story”, reacted in outrage with a libel suit seeking $50 million in damages. When the suit came up, as Desai, 93, was too ill to travel to US, Kissinger testified on Desai’s behalf, flatly contradicted Hersh’s charge and stated that Desai had no connection to the CIA. That is how even retired and old persons, honest and so offended and outraged, would act. But see the self-incriminating contrast, the complete absence of such outrage, in Sonia, who is reigning as the chairperson of the UPA now, neither retired or tired like the nonagenarian Morarji Desai, being just 41 when the story broke out in Schweizer Illustrierte. Imagine, not Sonia or Rahul, but Advani or Modi had figured in the exposés of Schweizer Illustrierte or Albats. What would the media not have done to nail them? What would the government of Sonia not have done to fix them?
Rs 20.80 lakh-crore loot
The billions of the Gandhi family being both bribes and monies stashed away in Swiss banks, they are inextricably linked to the larger issue of bringing back the huge national wealth stashed abroad. All world nations, except India, are mad after their black wealth secreted in Swiss and like banks. But India has shown little enthusiasm to track the illicit funds of Indians in Swiss and other banks. Why such reticence?
When during the run-up to the 2009 Lok Sabha elections, the BJP leader L K Advani promised to bringing back, if voted to power, Indian monies estimated between $500 billion and $1.4 trillion stashed abroad, the Congress first denied that there was such Indian money outside. But when the issue began gathering momentum, Manmohan Singh and Sonia Gandhi had to do damage control and promise that the Congress too would bring back the national wealth secreted abroad. Global Financial Integrity (GFI), a non-profit institution working against global black funds, has recently estimated that the Indian wealth secreted away is about $462 billion, approximately equal to Rs 20.80 lakh-crore. The GFI says that more than two-thirds of it was looted away under the liberalisation regime. This is what the GFI says about the character of the loot: “From 1948 through 2008, India lost a total of $213 billion in illicit financial flows (or illegal capital flight)” through “tax evasion, corruption, bribery and kickbacks, and criminal activities”. Does one need a seer to say under what head would the $2.2 billion in Sonia family’s secret account (which would have grown to $9 to $13 billion by now) fall? But accretions, if any, from the loot in 2G and CWG where the numbers are even bigger are not still accounted. Now comes the more critical, yet practical issue. When the Sonia Gandhi family is among the suspects who have secreted away monies abroad, how will it affect the efforts to bring back the wealth stashed away by others?
Just a couple of examples will demonstrate how the government is unwilling to go after Indian money secreted abroad. As early as February 2008 the German authorities had collected information about illegal money kept by citizens of different countries in Lichtenstein bank. The German finance minister offered to provide the names of the account holders to any government interested in the names of its citizens. There were media reports that some 250 Indian names were found in the Lichtenstein Bank list. Yet, despite the open offer from Germany to provide the details, the UPA-II government has never showed interest in the Indian accounts in Lichtenstein Bank. The Times of India reported that “the ministry of finance and PMO have, however, not shown much interest in finding out about those who have their lockers on the secret banks of Liechtenstein which prides itself in its banking system”. But under mounting pressure the Indian government asked for details not under the open offer but strategically under India’s tax treaty with Germany. What is the difference? Under the tax treaty the information received would have to be kept confidential; but, if it were received openly, it can be disclosed to the public. Is any further evidence needed to prove that the government is keen to see that the names of Indians who had secreted monies abroad are not disclosed?
The second is the sensational case of Hasan Ali, the alleged horse-breeder of Pune, who was found to have operated Swiss accounts involving over Rs 1.5 lakh-crore. The income tax department has levied a tax of Rs 71,848 crore on him for concealing Indian income secreted in Swiss accounts. This case is being buried now. The request sent to the Swiss government was deliberately made faulty to ensure that the Swiss would not provide details. Some big names in the ruling circles are reportedly linked to Hasan Ali. That explains why the government would not deepen the probe. It is Hasan Alis and the like who transport through hawala the bribes of the corrupt from India. If Hasan Ali is exposed, the corrupt will stand naked. This is how the hawala trader and the corrupt in India are mixed-up.
Is it too much to conclude that thanks to Sonia family’s suspected billions in Swiss accounts the system cannot freely probe the $462 billion looted from India at all? Tail-pieces: The total wealth of both Gandhis, as per their election returns, is just Rs 363 lakh, Sonia owning no car. Sonia lamented on November 19, 2010, that graft and greed are on the rise in India!! Rahul said on December 19, 2010, that severe punishment should be given to the corrupt!!! Amen.
About The Author:
S Gurumurthy is a well-known commentator on political and economic issues
Quattrocchi, Chadha got kickbacks: I-T
New Delhi January 3, 2011
A tax appeal by his son has boomeranged on Win Chadha, who was once accused as one of the biggest beneficiaries of the Bofors kickbacks, and Ottavio Quattrocchi, the Italian businessman who too was named in the scandal.
On December 31, the Income Tax Appellate Tribunal (ITAT) shot down the appeal of Chadha’s son Hersh, saying “commission was paid to Ottavio Quattrocchi and Win Chadha illegally” in the Bofors deal.
According to ITAT, these “payments were made illegally as the government of India policy did not allow middlemen in defence deals”.
The income tax investigations have also revealed that Chadha received income in the Bofors deal that was more than what was disclosed in his return of income.
Despite the government’s directive to not appoint or pay any agent, Bofors entered into a fresh agreement with AE Services Limited of the UK in November 1985 at the behest of Quattrocchi, the ITAT said.
The I-T probe also revealed that Bofors did not disclose its deal with AE Services in its communication with the ministry of defence. Investigations have revealed that Quattrocchi was instrumental in bringing about the agreement between AE Services and Bofors.
It has emerged that on September 3, 1986, Bofors remitted a sum of $7.34 million to a Swiss bank account of AE Services. From this account, an amount of $7.12 million was transferred to an account in the name of M/s Colbar Investment Limited, Panama. That account was also with a Swiss bank in Geneva.
The Statesman, Friday May 7, 2010
by Rajinder Puri
The most damaging weakness of India’s political class is its lack of credibility. Regardless of the truth, people at large are convinced that the entire political class is corrupt. The government covers up corruption cases. The opposition dares not pursue them even when those in the government are involved. The Scorpene deal, the Koda mining scam, the Raja Spectrum scam, the IPL scam – the list of unresolved cases that do, or will, gather dust seems endless. The highest leadership in both the government and the opposition lacks public credibility. This is because of the curious inertia displayed by these leaders even after circumstances cloud their reputations. The biggest scam currently on the radar is of course the Hassan Ali Khan Hawala scam.
|Corruption has become so widespread and brazen that it is destroying the foundations of the Indian Republic. India can stand on the roof and watch its neighbour’s house in flames. Why doesn’t it look below its feet to realize that its own house is burning?
Readers will recall this scribe had earlier drawn attention to the Hassan Ali scam and the government’s brazen cover up to bury the truth. Hassan Al is the owner of a Pune stud farm. He has 10 known illegal Swiss bank accounts, probably more in other tax havens. His money stashed abroad is astronomical. According to the government’s statement he owed Rs 50,345 crore to the tax department as on 31 March 2009. According to accountants that sum would have escalated to approximately Rs 100,000 crore by when Budget 2010 was presented. On October 20, 2009 this scribe pointed out how according to Swiss authorities while the Indian government publicly sought help in probing Hassan Ali’s Swiss account, privately it sabotaged the probe by submitting “forged” documents asked for by Switzerland’s Federal Office of Justice. Swiss authorities wanted to help, but Indian authorities withheld proper documentation. Since April 2007 the Indian government has kept mum on the Swiss request for proper documents.
On March 18 2010 this scribe drew attention to Finance Minister Pranab Mukherjee’s statement to the media that the government had recovered the tax dues from Hassan Ali. But the revised estimates for 2009-10 did not accommodate the Rs 100,000 crore due from Hassan Ali in the Budget figures. Further, the existing Income Tax Act was amended to waive impediments for tax defaulters like Hassan Ali to approach the Settlement Commission for resolving tax disputes. If Hassan Ali Khan approaches the Commission it would enable the government to evade sharing information about Hassan Ali’s undisclosed foreign assets with foreign governments as required by the international tax treaties entered into by the government.
Clearly, Finance Minister Mukherjee is covering up the Hassan Ali probe. Why? The answer may have been given in the Maharashtra Assembly. On April 13th a CD showing Hassan Ali was laid on the table of the House by BJP MLA Devendra Phadnavis. The CD contained Ali’s statement to police in which he mentioned names of former Chief Minister Vilasrao Deshmukh, Maharashtra Home Minister RR Patil and Congress President Sonia Gandhi’s political secretary, Ahmed Patel. In the CD Ali claimed a meeting involving RR Patil and Ahmed Patel at Juhu Centaur Hotel on 11 August 2008 to approve Hasan Gafoor’s name as Mumbai’s police commissioner. Home Minister Patil vehemently denied any association with Ali. “I have never met Ahmed Patel and never spoken to him face to face. The CID will probe if the motive of the CD was to harm Gafoor, me, Ahmed Patel or anybody else”, Patil told the assembly.
The government ordered an inquiry conducted by Additional Director General, Crime Investigative Department (CID) and SP, S. Yadav. The CD was prepared by the use of spy cam by Deputy Police Commissioner Ashok Deshbhratar. Predictably, the politicians named have not been questioned. Their denials have been accepted at face value. Instead the CID charged IPS officer Ashok Deshbhratar who produced the CD with trying to extort money from Hasan Ali! In its 15 page report the CID stated that Hasan Ali’s confession has been selectively edited. The CID had sent the CD to the forensic lab at Chandigarh. Its report said the audio-visual pieces of interrogation were not inter-linked, but joined together in sequence to appear as if they are part of continuous interrogation. Inter-linked or not, the forensic report does not deny that it was Hassan Ali himself speaking the “disjointed” narrative. CID investigations confirmed that one meeting did take place involving Vilasrao Deshmukh and Ahmed Patel at Juhu Centaur on March 15, 2008. But CID comforted itself with the fact it could not have discussed Gafoor’s appointment because by then Gafoor had already been appointed Mumbai Commissioner of Police. Never mind the Police Commissioner’s appointment, how is Hassan Ali’s proximity to Congress politicians including the political secretary of Congress President Sonia Gandhi, Ahmed Patel, to be explained?
Circumstantial evidence reveals therefore that Hassan Ali, the nation’s biggest money launderer, is protected by Finance Minister Pranab Mukherjee. And Hassan Ali has links with senior Congress politicians including Sonia Gandhi’s trusted political secretary, Ahmed Patel. During his interaction with Ali was Ahmed Patel representing himself or his boss, Sonia Gandhi? If he was representing himself why has Sonia Gandhi not sacked him? If he was representing the Congress President how does Sonia Gandhi explain her party’s links with the nation’s biggest money launderer who is being protected by the Finance Minister? Connect the dots and the picture that emerges is not pretty. Either the Congress is so stupid that it deserves to be removed from power, or it is so corrupt that it deserves to be removed from power. Wittingly or otherwise the BJP until now has served only Hassan Ali’s interests. Publicizing the CD will act as a powerful disincentive for the government to act against Hasan Ali. By not pursuing the matter at the national level the BJP has failed to serve its own interests. Therefore the BJP is either so corrupt that it deserves to perpetually remain out of power. Or it is so stupid that it deserves to perpetually remain out of power.
Corruption has become so widespread and brazen that it is destroying the foundations of the Indian Republic. India can stand on the roof and watch its neighbour’s house in flames. Why doesn’t it look below its feet to realize that its own house is burning?