2010 will go down as the ‘Year of the Corrupt’. Looking back, it’s difficult to step out of the muck of scams, to hope for a cleaner year ahead. But hope we must
The Bofors scam and Harshad Mehta are long forgotten, but 2010 will go down as a year that redefined the word 'scam' by displaying the many fields and ways in which they can occur.
The year started with the Sukna land scam, leading to disciplinary action against the top army brass. Army chief General Deepak Kapoor ordered court-martial proceedings against his close aide and military secretary Lieutenant General Avadhesh Prakash, the senior-most of the four generals indicted in the alleged scam case. The case involved the issuance of a no- objection certificate by the commander of the Army's 33 Corps to real estate developer Dilip Agarwal, for the transfer of a 71-acre tea estate adjacent to the Sukna military station, on the pretext of opening an educational campus affiliated to Ajmer-based Mayo College.
In February, IT major Wipro Technologies detected embezzlement of company funds by an employee in its finance department. The fraud is estimated at $4 million.
In April, Shashi Tharoor, resigned as minister of state for external affairs over the Kochi franchise in the Indian Premier League (IPL). The problem started after Lalit Modi, the then IPL commissioner, revealed that Mr Tharoor's friend Sunanda Pushkar had an equity stake in Rendezvous Sports World (RSW) which won the Kochi bid. It was later disclosed that Ms Pushkar got sweat equity of the value of Rs70 crore from Rendezvous. But the focus soon shifted to Mr Modi for alleged fraud, tax evasion and more, with allegations and counter-allegations flying about through the media.
In the North-East, a special investigative cell in Arunachal Pradesh arrested Gegong Apang on charges of a multi-crore public distribution scam that happened before 2004, when Mr Apang was chief minister. The public exchequer suffered losses as fraudulent hill transport subsidy bills were cleared without financial concurrence.
In June, the microfinance sector was plunged into turmoil. Ironically it was the country's leading microfinance company, SKS Microfinance, that triggered the crisis with the controversial sacking of its chief executive officer within weeks of a very successful initial public offer. While the dismissal exposed the high-pay-high-interest operations of micro lenders, the Andhra Pradesh government soon issued an ordinance forcing strict rules and a cap on their activities. At the year-end the ordinance became statute. The sector shows no signs of recovery and is reeling from defaults and absence of fresh funding.
In July, the illegal mining scam rocked the BJP-led Karnataka legislature. Governor HR Bhardwaj asked for the resignation of the Reddy brothers, who are ministers in the Karnataka government, accusing them of illegal mining. The opposition sought the resignation of chief minister BS Yeddyurappa, but he refused to quit. The illegal mining and export of iron ore in Karnataka is estimated at Rs60,000 crore.
In August, an Uttar Pradesh government official disclosed that the Rs300 pension, which is part of the government's social security programme was fraudulently disbursed. The official revealed that of the 86,035 registered old-age pensioners in the state, only 65,920 people were genuine, while 17,419 were either fake or ineligible and 2,441 dead people were being paid a pension. An investigation has been ordered.
In September, the collapse of a footbridge, incomplete and shoddy construction work and filthy accommodation for sportspersons participating in the Commonwealth Games set off an uproar over misuse and misappropriation of money spent on this international event.
Media investigations revealed that money was siphoned off through allocation of broadcast rights, payments were made to non-existent parties, wilful delays in execution of contracts, over-inflated prices and disorganised purchase of equipment. The Central Vigilance Commission probing the alleged corruption in expenditure over the Games has recorded misappropriation amounting to an estimated Rs8,000 crore. The Central Bureau of Investigation (CBI) has raided the offices of Suresh Kalmadi and other Games officials, but Mr Kalmadi continues to be the chairman of the Games organising committee.
In Maharashtra, the Adarsh Housing Society land grab cost chief minister Ashok Chavan his job. The Adarsh building project, in Mumbai's Colaba area, originally cleared as a six-storey structure for Kargil war heroes and widows, was converted into a 31-storey building, in which flats were allocated to top army officials, bureaucrats and politicians or their close family members. Inquiries by the media and RTI activists have also found that clearances for the building, constructed on prime defence land, have also been given illegally.
Karnataka chief minister Mr Yeddyurappa was again targeted over land transfer deals favouring his sons. The lands, which were part of the discretionary quota of the chief minister, were earlier earmarked for public projects and industries.
Even as the Adarsh and Karnataka land scams held the attention of the public, another major corruption case came to light with the arrest of eight finance executives, including the chief executive officer of LIC Housing Finance, Ramachandran Nair. The officials were accused of sanctioning loans to corporate houses (many of them real estate businesses), overlooking the guidelines, in exchange for bribes. The deals were worked out by Money Matters, a hitherto little known Mumbai-based company.
But it was the 2G spectrum allocation scam that created the biggest storm, disrupting the entire winter session of parliament. In November, the Comptroller and Auditor General (CAG), the country's topmost accounts head, reported irregularities in the government's allocation of 2G spectrum to private companies that resulted in a loss of nearly Rs1,76,000 crore in potential revenues.
The CAG report held telecom minister A Raja responsible for arbitrary and unfair allocation of spectrum in 2008 at the rates in 2001, ignoring the guidelines of the telecom ministry and the advice of the prime minister. Raja resigned, but more disclosures about lobbying over ministerial positions by some industry leaders and involving popular media personalities widened the matter and ensured it will not die down easily.
The opposition has been firm on its demand for an investigation into the matter by a Joint Parliamentary Committee (JPC), but the government has so far refused to give in to the demand, saying that it is being investigated by the Public Accounts Committee (PAC). The opposition is adamant that only a JPC can look into the aspect of the accountability of the government that is at the core of the scam.
A lot of the disclosures on this matter were contained in taped conversations of Niira Radia, corporate lobbyist and public relations consultant for top business houses like the Tatas and Reliance Industries, by the income-tax authorities. The conversations reveal how she manipulated the media over issues concerning the Ambanis and the even the appointment of A Raja as telecom minister in the current government instead of Dayanidhi Maran.
Extensive transcripts of the tapes were published in Outlook and Open newsmagazines and the tapes of nearly 5,000 conversations are now in the custody of the Supreme Court, which is keeping a close check on the ongoing investigations into the entire matter dating back to 2001.
In the last few days, we learned about a customer relationship manager at the Citibank branch in Gurgaon duping high networth individuals to the tune of nearly Rs400 crore.
The investigation into most of these cases is still going on and will likely dominate the new year 2011.
Washington: India is a net job creator for US companies, not the other way around, National Association of Software and Services Companies (NASSCOM) chief Som Mittal said on Friday, strongly refuting the public perception here that outsourcing and free trade agreements are responsible for America's current economic woes, reports PTI.
“India is a net job creator for US companies, not the other way around. The Indo-US economic relationship benefits the American economy and its job market in many important and tangible ways,” Mr Mittal wrote in an opinion piece in the Seattle Times.
The US has emerged as a preferred destination for Indian investment. In fact, India now ranks second, behind the UAE, in the list of fastest-growing foreign investors in the US, he argued in his article.
Observing that India has never sought publicity for its commercial connections to the US, Mr Mittal said India it has quietly become both a major investor in America and a significant destination for American goods and services.
“It has a rapidly growing population of consumers hungry for products of many kinds. And unlike other large economies that have been suffering through recessions in recent years, India has increased its total outward foreign direct investment and devoted an increasing share of that largesse to the American market in need of financial support,” he said.
Referring to a recent study by Ernst & Young, which was commissioned by the Federation of Indian Chambers of Commerce and Industry (FICCI), Mr Mittal said it found that Indian companies have increased their investment in the US by more than $20 billion over the past five years.
According to the study, those investments have supported the creation of more than 65,000 American jobs.
“That number got even higher when president Obama visited India in November. At the president’s summit with prime minister Manmohan Singh, US business leaders signed export deals with India worth more than $10 billion to US employers like Boeing.
President Obama estimated those contracts would create 50,000 American jobs—many in the Seattle area—in the near future, proof that America’s expanding economic partnership with India is far from a one-way street,” Mr Mittal said.
The study also revealed another welcome trend; an increasing percentage of India’s outward-directed investment is going to the US In the past two fiscal years alone, roughly 20% of Indian companies' acquisitions abroad were in the US, and that percentage is still rising, he said.
In fiscal 2009 and 2010, Indian companies made 536 foreign acquisitions and 105 of them were in the US.
During the quarter that ended in June of this year, Indian companies completed 101 outbound acquisitions of which nearly a quarter were American firms.
The companies that were purchased tended to be in the same industries that Americans fear are losing the highest number of jobs to India. According to the study, information technology was the fastest-growing area of outbound investment, followed by manufacturing and pharmaceuticals.
Kolkata: The Calcutta Stock Exchange (CSE) today said it has received the Securities and Exchange Board of India's (SEBI) nod to allow trading on the National Stock Exchange (NSE) platform, reports PTI.
“We have received SEBI's approval to allow NSE trading for our members through the local bourse,” CSE chairman Dipankar Chatterji told PTI.
The CSE board will finalise the modalities and fees structure shortly after receiving brokers’ feedback, Mr Chatterji said.
CSE expects to make the NSE platform operational by early February. The bourse already offers trading facility for Bombay Stock Exchange (BSE) scrips.
The local bourse already does daily average business of Rs30 crore from the BSE trading platform.
After the operationalisation of the NSE platform, the exchange hopes to create a combined turnover of Rs80-Rs100 crore from cash segment of BSE and NSE.
“The exchange will witness a major jump in turnover after we introduce futures and options segment of NSE in CSE,” Mr Chatterji said.