Citizens' Issues
Cable Television Digitisation: Crying wolf

The regulator is making cable TV go digital which will benefit broadcasters but what about consumers’ interests, asks Dr Prakash Hebalkar

For the past two years, the Ministry of Information and Broadcasting has been promoting digitisation of telecasting; TV channel distributors in all metros would need to convert to digital signals by 2012 and for the rest of the country by end-2014....

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Corporate Governance: What really matters

Recently a proxy advisory firm exposed how the independent directors of Escorts and institutional investors have allowed the Escorts management to push through a proposal that would increase the management’s stake. The move is against the interest of minority shareholders and the independent directors and institutional shareholders should have protested, says the advisory firm. Among the...

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Nailing the corrupt: Can we have some action in India?

Across the world, corrupt corporates, government officials and individuals have been sent to jail or made to pay heavy damages. When will India act to punish the guilty?

The conviction of Rajat Gupta by a US court in the matter of insider trading has raised an important issue; can we expect anything like this in India? Will there be speedy trials not only in the case of insider trading but several other important cases involving corporate frauds and political corruption.
 
While we in India tend to believe that we have tremendous amount of corruption in our country as also there are several frauds involving corporate and rightly so, but we are not alone in this; countries across the world are facing these twin problems. However, the major difference seems to be the speedy justice provided to the victims with the guilty being hauled by sending them to jail or making them pay heavy damages so that it would teach them a lesson.
 
According to a recent issue of American Banker, ING Bank has agreed to pay $619 million to settle charges that it violated US sanctions; the report says this is the largest such settlement in history, said  the Treasury Department. (http://www.americanbanker.com/issues/177_113/ING-OFAC-violations-settlement-1050065-1.html )The settlement resolves an investigation by the Office of Foreign Assets Control into charges that the bank intentionally manipulated information about US sanctioned parties in more than 20,000 financial and trade transactions between 2002 and 2007. The Treasury held that it was a historic settlement and it should serve as a clear warning to anyone who would consider profiting by evading US sanctions.

The case involving well-known pharma giant Johnson & Johnson (J&J) makes still more interesting reading. Pharma companies have been known for certain practices which can hardly be called ethical. According to a Bloomberg report J&J has agreed to pay as much as $2.2 billion to settle US probes of the marketing of its Risperdal antipsychotic drug and other medications. The report states that, “The settlement will include a misdemeanour plea and criminal penalty of as much as $600 million, said the people, who didn’t want to be identified because they weren’t authorized to speak publicly about the agreement. (http://www.bloomberg.com/news/2012-06-11/j-j-said-to-pay-2-2-billion-to-end-risperdal-sales-probe.html)

The accord also would resolve civil claims that J&J paid kickbacks to Omnicare Inc (OCR), a company that dispenses drugs at nursing homes, the people said”. The said report states that J&J officials said that on 8 June that the company was setting aside $600 million to increase its reserves for potential settlements of lawsuits over its marketing campaigns for Risperdal and other drugs. Officially, the spokesman of J&J has refused to comment on this matter.
 
In another case, this time from Singapore, former Singapore Central Narcotics Bureau director Ng Boon Gay was charged with four counts of corruption for obtaining sexual favours from a female information technology executive seeking contracts from the agency. The charges come less than a week after former Singapore Civil Defence Force commissioner Peter Benedict Lim Sin Pang faced similar charges involving three women seeking contracts for their companies. Singapore reviewed its public sector financial procedures after uncovering a S$12.5 million ($9.7 million) fraud in September 2010 by two former land authority workers in an incident prosecutors said severely shook public confidence in the internal controls at government agencies.
 
Mr Ng is out on bail and will contest the charges and seek more information on how he had allegedly helped in furthering the interest of Oracle and Hitachi Data. Hitachi Data said in an e-mailed statement “any alleged inappropriate behaviour attributed to our former employee during her time at HDS was undertaken without the knowledge of, or being condoned by, anyone at HDS.”  Mr Ng faces a fine of as much as S$100,000 and a jail term of as long as five years for each charge.

Many years back Glenn Knight, a former director of the Commercial Affairs Department, was sentenced to a day’s jail in 1998 and suspended from legal practice on corruption charges in 1991. The Straits Times (Singapore) said the investigations this year rank among the highest- level probes of civil servants since Knight’s case.

China is well known for many things and corruption is one of them. But a recent case indicates the seriousness of the authorities to bring the guilty to book at the earliest.
 
According to a report by David Barboza from Shanghai, published in the New York Times (13th June), the former head of the Chinese soccer association and 10 other former national team players and executives were sentenced by Chinese courts to lengthy prison terms for accepting bribes and fixing matches (http://www.nytimes.com/2012/06/14/sports/soccer/lengthy-prison-terms-in-chinese-soccer-corruption-case.html).
 
According to the report, the sentences are part of a government effort to crackdown on gambling, match-fixing and bribery in the country’s beleaguered leaguers. So far, more than 50 former players, coaches, referees and other officials have been convicted of corruption. The authorities are trying to clean up the system that has long been tainted with corruption and also failed to produce a strong national team. China’s national team is ranked 73rd by FIFA, just ahead of Iraq. The country’s team has not qualified for the World Cup since 2002.
 
The country’s national league is also trying to strengthen itself after a decade of scandals. Some of China’s wealthiest real estate developers have bought clubs, and even hired European stars and coaches to enliven the game, which remains a popular sport in China.
 
The agency report states that a court in northeast China sentenced Nan Yong, a former top executive, to 10 years in prison for taking bribes of 1.19 million renminbi (about $187,000). His predecessor was the head of the Chinese association was also sentenced by another court in north China to 10 years in prison for taking about 1.36 million renminbi (about $214000) in bribes.
 
Two other members of the national soccer association, the team manager and the former technical department director also received long prison terms. Similarly, four national team players were also sentenced on 13th June to six years in prison for taking bribes to help fix the results of a professional match.

We have been importing so many things from China, can our cricket authorities learn a lesson or two from the way China has dealt with its players and officials indulging in corrupt practices.
 
According to a BBC news report South African President Jacob Zuma has fired police chief Gen Bheki Cele, who had been accused of corruption. (http://www.bbc.co.uk/news/world-africa-18414786) The general was promoted to become police chief in 2010, when his predecessor Jackie Selebi was convicted of taking $156,000 (100,378 pounds) in bribes from a drug dealer. Are the Indian authorities listening; here suspended police officers not only manage to come back to work but in due course are granted promotions as well.
 
The country has been debating whether to permit Wal-Mart into the country or not, what will be the consequences, will it be in the interest of consumers or will it kill the small retailers, etc.  Now comes an Associated Press report which indicates the level of bribery indulged in by Wal-Mart officials in promoting its operations in Mexico. The same report states that the New York Times reported in late April that Wal-Mart’s Mexican unit allegedly paid millions of dollars in bribes to speed building permits and gain other favours. The Times said executives didn't notify authorities even after Wal-Mart found evidence of the scheme. However, the top management has said that a full investigation is going on it is co-operating with the authorities.

So when Wal-Mart comes to India, one thing we can be sure of is huge bonanza will be available for our babus who will be providing the necessary approvals to Wal-Mart for starting its operations in India. 
 
What is evident from all the above cases is that bribery and corruption is all pervading but is also apparent is intention to fight the same by bringing the guilty to book at the earliest by giving them harsh punishments. Can we expect anything like this in India?

 SD Israni is a corporate lawyer. Email: sdisrani@gmail.com

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COMMENTS

nitin

5 years ago

Its a utter shame.How all the ppl talking about cricket and everything else, but when it comes to their own ( everyone's propblem ) corrcutions, nothing moves.

RNandakumar

5 years ago

Hybrid cars would be the answer for the present fuel crisis in India. Cartelisation and weak govt at centre is resulting in an uncertain atmosphere both for the buyer as well as manifacturers. Nissan and Toyota could revolutionise our car market but only if the govt is bold.

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