The ease with which a "foreigner" of any sort has to be seen to be believed. An alien, person of Indian origin, citizen of another country, person who acquires citizenship of another country or pure and simple, a shadowy entity with a document professing to entitle the person to travel anyone can become a director or shareholder in an Indian corporate structure or even form one.
Certainly, for the very law abiding, there are reams and reams of paperwork and affidavits and notarised and attested documents. Multiple sets for the Ministry of Corporate Affairs (MCA) and Ministry of Finance (FinMin) and their multiple agencies and authorities. Even opening a simple savings bank account or applying for a new phone connection or getting a badge for working as a taxi driver involves much wider and more stringent background checks as well as documentation.
But for a "foreigner" to become a director of a company or any other commercial enterprise in India, including taking a lot of money away as "loans", a passport along with a slim file of "notarised" documents is more than enough.
Going back not too far in history, I was once on a ship, which was diverted to a seaport in a country not too far away from India, famous also for a large number of Indians already living and working there. As we were lined up for free pratique (permission granted to a ship to have dealings with a port, given after quarantine or on showing a clean bill of health), an announcement was made that people from such-and-such countries would not be permitted to leave the ship, and that if they tried to do so, they would be prosecuted with the full force of the law and the man holding the gun made it very clear, too. That left only the European Master, who in solidarity also opted not to go ashore.
Getting stuck on a ship when the bright lights of the city can be seen is the worst form of torture ever invented. As the co-ordinating officer, becoming friendly with the senior immigration person who would board twice a day to do a head-count, I asked him if he could please bend the rules; I so very much wanted to go ashore. So eventually after a few days he said, OK, you and two more people will come ashore with me in my car, you will go to the city with my men as your escorts, do all the shopping for everybody that you need to do, and then you will return to the ship with me again.
We jumped at the offer, and three of us (Indian, Pakistani and Filipino) picked up the combined shopping lists for pretty much everybody on board, and the old man released our passports and continuous discharge certificates (CDCs) to us so that we could leave them as deposits if asked. In the car, the immigration officer spotted our passports and CDCs in our hands, and said that we need to keep them carefully with ourselves and ensure we do not lose them. Don't you want to keep them as some sort of security, I asked, and he said, wait, let me show you something in my office.
When we reached his office, he took us to a locked room, opened it, and there inside, 10' x 20' at least and wall-to-wall high stacked with steel trunks, were thousands of passports and photocopies and more documents of people, who had left documents as security and jumped.
Point being made here is that in this day and age as in the past, a fake passport is still an easy document, and does not really prove anything beyond being able to enter or leave a country.
If you analyse the scams that have taken place over the last few decades in India, then a common thread across most of them is that foreign directors are simply assumed to be untraceable if things go wrong, and all efforts are then directed at those who are Indians in India. This has to change and very soon. A few methods suggested, as practiced in other countries, are as follows -
a) Physical entry and exit into and from India at least once every financial or calendar year otherwise debarred.
b) Second round of re-verifications from the diplomatic mission of the passport holder's country every year.
c) Background documentation down to school and birth records where the stakes are high.
d) A list of acceptable, moderate and unacceptable countries basis extradition treaties in force with the countries involved.
e) Two referees as guarantors in India with assets in line with the exposures therein.
f) Some amount of liability on the consultants drawing up the documentation for the foreigners.
g) Tax filing status in home country along with social security and other domestic documentation.
Otherwise, we are simply destined to repeatedly have "foreigners" loot and scam us and then vanish.
(Veeresh Malik had a long career in the Merchant Navy, which he left in 1983. He has qualifications in ship-broking and chartering, loves to travel, and has been in print and electronic media for over two decades.)
