Identity theft is a serious issue. But, in India, the rich and the powerful get away with using the identities of their employees (drivers and domestic helpers) as fronts for large business transactions, by naming them as directors in benami companies. Why is India so tolerant about the issue?
I dentity theft is a serious issue. But, in India, where the rich and the powerful get away with using the identities of their employees (drivers and domestic helpers) as fronts for large business transactions, by naming them as directors in benami companies, the gravity of the matter does not seem to upset people.
On 17th November, Moneylife’s website reported a filing on the statutory corporate filing database of United Kingdom, companieshouse.gov.uk. It showed that SGFX Financials, a UK-registered entity set up in December 2010, had former Union agriculture minister and Nationalist Congress Party (NCP) chief Sharad Pawar as a director between 13 December 2010 and 5 January 2011. Following his exit, a breath-taking £70 billion came into the company; the company itself was quickly dissolved in November 2012. A day after our report, The Economic Times reported that Mr Pawar had filed a complaint with the economic offences wing (EOW) of the Mumbai police against two directors of SGFX Financials, Sarvesh Narendra Bharde (it is actually Gade) and Shahnaz Ashraf, for ‘falsely and fraudulently’ submitting Mr Pawar’s name as a director, without his knowledge. Mr Pawar reportedly admitted that all other details about him, in the corporate filings, were accurate. On 22nd November, The Times of India reported that the EOW “may not register an FIR against the suspects (Sarvesh Gade and Shahnaz Ashraf) since they have publicly apologised for technical error that caused the inclusion of Pawar’s name in their company as a director.” As simple as that.
The two had tried to blame the technical error on the UK firm, called Companies Made Simple, which, in turn, denied having filled out the forms. Pune-based RTI activist, Vijay Kumbhar, tweeted a Facebook post of SGFX Financial, which prominently displayed Mr Pawar’s photo and was even ‘liked’ by Mr Gade. How that happened will remain a mystery.
Another case that is almost buried by the ‘tolerance’ debate is the allegation by Bharatiya Janata Party (BJP) leader, Dr Subramaniam Swamy, that Congress leader Rahul Gandhi had represented himself as a British citizen in UK corporate filings. He revealed documents and corporate filings about a company called Backops Limited for several years. UK’s Companies House records reveal three versions: there are some records relating to Rahul Gandhi’s company, Backops Limited, where he is shown to be a British national; there are some other records of the same company that show him as an Indian national. And there is, apparently, a third record where he is shown as British but a handwritten change has been made—the word ‘British’ has been scratched out and replaced by ‘Indian’. The Congress has, predictably, dismissed Dr Swamy’s allegations, while Mr Gandhi challenged the government to arrest him. After a furore, mainly on social media, the matter seems to have been buried by the media and the political class, although Dr Swamy is unlikely to give up so easily.
This tolerance for shady records, benami dealings and incorrect reporting to statutory databases extends beyond our shores to other powerful Indians too. Consider the explosive story by Nilita Vachani in The Nation and the Caravan magazine about how Anil Kumar, former partner at McKinsey & Company, stole the identity of an illiterate domestic help—Manju Das—to open offshore accounts in her name and collect illicit payments for revealing insider information in the famous case involving Raj Rajaratnam of Galleon Group and Rajat Gupta. Anil Kumar was convicted, but got away with a lighter sentence of two-year probation in 2012, a fine of $25,000 and forfeiture of $2.26 million in shady earnings, in exchange for agreeing to testify against his two friends. The revelations about Manju Das seem to have been quietly dropped as a part of the deal with the United States authorities, for testifying against his close friends Rajat Gupta (former head of Mckinsey) and Raj Rajaratnam leading to their imprisonment.
This extraordinary tolerance for the misuse of identity, probably, explains why politicians across the spectrum (barring a few rare exceptions) have no interest in ensuring that the Unique Identification Number is legislated by parliament, with clear checks & balances put in place after a debate. It also explains why valid concerns about the flawed Aadhaar database do not resonate with ordinary Indians.