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No beating about the bush.
A few hundred crores frozen and more shell companies discovered; despite an RBI warning, a number of banks opened up only to the I-T authorities on these Speak Asia accounts—and what was the Financial Intelligence Unit doing?
The Income-Tax (I-T) Department has stepped into the investigation into the Singapore-based money circulation scheme called Speak Asia, which has ensnared a massive 19 lakh gullible Indians into paying Rs11,000 each and become "panelists". Moneylife learns that the I-T investigation began in June and it has written to two banks-ICICI Bank and ING Vysya-for more information on the various front entities, registered in India, which helped Speak Asia collect money and remit it overseas.
More shockingly, sources in Delhi tell us that banks may not have been as careless about allowing Speak Asia's shady operations as it has appeared. We learn that some of the banks had filed multiple Suspicious Transaction Reports (STRs) to the Finance Ministry's Financial Intelligence Unit-India (FIU) as required under the Prevention of Money Laundering Act. These reports are supposed to alert the government to money laundering and terrorist funding. There is no indication of the FIU having acted on these reports although over Rs500 crore is understood to have flown out of India to Speak Asia's Singapore entity.
We also learn that the RBI (Reserve Bank of India) had issued a bland circular to all banks on 23 May 2011 about Speak Asia's modus operandi and warning them to be careful while opening account for such schemes since they fell under the purview of the Prize Chits and Money Circulation (Banning) Act of 1978 or face stringent action. Interestingly, while the banks have maintained that they have no accounts of Speak Asia, they have been a lot more forthcoming to the tax authorities and revealed many more names, which opened accounts for Speak Asia related entities.
Another significant discovery is that apart from Tulisyat Tek Pvt Ltd (which, as Moneylife reported earlier, is an account-holder with ICICI Bank), Speak Asia had at least two other core accounts which were used to remit funds abroad. These were Kritanj Management Services and Star Enterprises. These in turn received funds from at least 20 other entities in various banks. Our sources say that the core accounts received large fund transfers from a host of banks including Allahabad Bank, Citibank, Yes Bank, HDFC Bank, State Bank of India, Axis Bank and others. We learn that hundreds of crores of rupees were first pooled into the accounts of Tulisyat Tek and Kritanj Management Services and then transferred to Haren Ventures in Singapore.
On 16th May, Moneylife wrote that although Speak Asia is registered in Singapore (all its senior officials carry visiting cards with Singapore addresses only), it has other fronts in India such as Speak India Network Marketing P Ltd, (registered in Mumbai, with Indian Directors) and Speak India Online. We also wrote that these companies had accounts in ICICI Bank and ING Vysya and money collected in these accounts (from people who paid Rs 11,000 per identity in the hope of earning absurdly high returns and taking the chain forward) was transmitted to another Mumbai-based company called Tulsiatek (the correct name of this company, we now know, is Tulisyat Tek Pvt Ltd). This company in turn transferred the money to a Singapore-based entity called Haren Ventures Pte owned by its shadowy promoter Harender Kaur. The only time Ms Kaur, owner of Haren Ventures, has made a personal appearance in India is at its mega-bash at Goa. Haren Ventures claims it sells an e-magazine on survey at an exorbitant price.
To recap, Speak Asia originally claimed to pay panelists for filling out e-surveys for clients. However, at a press conference in Mumbai, when the company was unable to name its clients (and those it named, like ICICI Bank and Bata denied giving it any business) it suddenly claimed that the Rs11,000 collected from each panelist was subscription for the e-magazine.
As the investigation continues, various authorities are probing the people behind these many accounts. While the Ministry of Corporate Affairs pretended to conduct an investigation and gave it up claiming it did not have powers, the Finance Ministry has also been caught napping if the Financial Intelligence Unit failed to act on suspicious transaction reports sent by banks.
The FIU is a national agency that not only receives and analyses suspicious transactions-it also coordinates and strengthens "efforts of national and international intelligence and enforcement agencies in pursuing the global efforts against money laundering and related crimes".
The irony is that millions of Indians are being looted everyday by money circulation and Ponzi schemes at every strata of society but the government has no interest in strengthening legislation to enforce the ban on their operation as envisaged under the Prize Chits and Money Circulation (Banning) Act.
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Some Congressmen in the habit of mudslinging are trying to deflect focus from the anti-corruption debate by indulging in accusations against Anna Hazare and his team. Which other country has an unelected prime minister or, criminal cases against nearly a third of its elected representatives, and these same people are talking about democracy in peril from the unelected?
Congress Party spokesperson Manish Tiwari says, "Our democracy faces its peril from the unelected and the unelectable…." (13 June 2011) Finance minister Pranab Mukherjee labels Anna Hazare a tyrant! These Congressmen, who are habituated to mudslinging, have persistently indulged in hurling accusations at Anna Hazare and his team to deflect public focus from the Lokpal debate.
First they tried to fabricate a CD over some registration of a plot against the Bhushans, which attempt fell flat. Now they are trying to get people to believe that Mr Hazare is working for the Rashtriya Swayamsevak Sangh/Bharatiya Janata Party and not for the masses. Only the corrupt, and not democracy, should feel threatened by such a mass movement. Democracy is the people, not the government.
And let it be understood by the arrogant who occupy positions of power, that democracy is not their personal domain or a 'members-only club' where 'unelected' citizens have no role to play. If that were so, should we assume that Mahatma Gandhi, Subhash Chandra Bose and the entire galaxy of our freedom fighters got away with their sins, and that Manish Tiwari would have prosecuted them for being 'unelected tyrants'. Such people must introspect and make a serious attempt to change their outlook.
I have ten observations that could help analyse the government's perception vis-à-vis the ground reality, in the ongoing turmoil in the country's political field.
1. No other democracy in the world has an unelected prime minister apart from India, which is supposed to be the world's largest democracy. Which is probably also why it is being said that "our democracy faces peril from its people…"
2. No other prime minister or president of a democracy has been as silent or as invisible as is the case in India.
3. No other government in the civilised modern world receives orders from an extra-constitutional authority (10 Janpath) as obsequiously as the Indian government.
4. No other government in the civilised world has been seen staggering so indecisively, and so clownish, as our government has been. First, they tried to make fun of Anna Hazare; then, terrified at the overwhelming response to his call and the support for the anti-corruption campaign, the government caved in and set up the joint drafting committee for the Lokpal Bill. Unable to answer questions raised by the civil society members of Hazare's team, Pranab Mukherjee calls him a tyrant! Next, the top four in the government prostrate before Baba Ramdev, then beat up the yoga guru's supporters two days later. What kind of 'democracy' is this, and who is destroying it?
5. No other democracy in the world has as many as nearly a third of its members of Parliament (mainly the Lok Sabha) (about 162 plus Suresh Kalmadi, A Raja, Kanimozhi and now may be even Dayanidhi Maran and P Chidambaram) facing criminal charges ranging from trespassing to murder. (This is more than a 26% increase over the record of members in the previous Lok Sabha. There are nine ministers in the central cabinet who face criminal charges, one of them for 'theft'. (According to National Election Watch, 76 members of Parliament are involved in serious criminal cases. A total 522 cases are pending against various members of Parliament; 275 of these are under serious sections of the Indian Penal Code.) What more do we need to add, Mr Manish Tewari, that will imperil democracy in India.
6. India ranks at 87 in the survey on the 'International Perception of Corruption' conducted by the World Bank and IBRD, Bertelsman Foundation, World Economic Forum, Global Insight and Transparency International Berlin. India stands on level with countries like Albania, Jamaica and Liberia with an index of 3.3 (out of 10), that has fallen from 3.5 in 2007 and 3.4 in 2008 & 2009.
7. No sane government, other than a heartless, tyrant would unleash brutality against a peaceful bhajan-singing congregation of innocent men, women and children, as happened at Delhi's Ram Lila ground, late night on 4-5 June 2011.
8. According to media reports (The Times of India, Ahmedabad, 8 June 2011), India not only tops the list of nations having tons of black money stashed away in Swiss banks, but its cache of black money ($1,546 billion) is far more than the combined total of the next four countries in the list of black money deposits namely, Russia, the UK, Ukraine and China ($1,056 billion). Contrast this with the poor farmers committing suicides, hapless pregnant women delivering babies at hospital gates, and destitute tribal masses fed up with a callous administration, seeking solace in a Maoist rebellion.
9. No other government can boast of so many scams as the UPA government.
10. Only the DMK appears to be ahead of the Congress (so far, at least) in the corruption race-so what if only a few of them have crash-landed in Tihar Jail!
However, these are merely some facts of the reality, not something that Manish Tiwari and Pranab Mukherjee would like to believe. They, like some of their colleagues in government, are suffering hallucinations and illusions. In Mr Hazare, they see a heavily-armed warrior-'a tyrant'-at the head of an angry army of India's masses, charging ferociously straight into them. This scenario reminds one of Wordsworth's adolescent thief, who was fleeing with a stolen boat, but he felt the hilltop behind was chasing him so menacingly, that the farther he went the bigger the shadow became that loomed over him. For, the more the government tries to shoo away the Lokpal and the uproar over corruption, the more vigorous becomes the public outcry against corruption.
Indian politicians could not have asked for more decent and loving enemies than Anna Hazare and his candle-wielding supporters, or Baba Ramdev, with his devotees practising abstinence and yoga. Arrogant governments in West Asia and North Africa are facing more violent and destructive uprisings. We have a choice to change peacefully.
While the anxiety of those in power is understandable, they cannot avoid the problem by looking in the other direction. The tide is unstoppable. The people deserve and they are demanding an effective Lokpal, to rein in rampant corruption and they will get it, with the government's your co-operation, or the tumult will crush authoritarian arrogance and install people's choice.
(The writer is a military veteran who commanded an Infantry battalion with many successes in counter-terrorist operations. He was also actively involved in numerous high-risk operations as second in command of the elite 51 Special Action Group of the National Security Guard (NSG.) He conducts leadership training and is the author of two bestsellers on leadership development that have also been translated into foreign languages.)
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