Regulations that don't put consumers' interest first

Why is it that the interests of consumers and consultations with consumers is never at the centre of any rules the regulators make?

If you ask a roomful of people whether the consumer should be the primary focus of financial sector regulation, it would be safe to bet that you will have nearly 100% concurrence. Every stakeholder pays verbal obeisance to the importance of the consumer of financial services. The preamble of all statutes creating independent regulators (for capital markets, insurance or provident funds) casts a duty on regulators to ‘develop’ markets and ‘protect investors’. But, as Moneylife has repeatedly pointed out, regulators and policy-makers merely dance around issues that consumers face, without ever interacting with them to frame appropriate regulation.

This is why after 25 years of modernisation, development and regulation by India’s capital market watchdog, we have only seen an exodus of retail investors from primary and secondary market as well as mutual funds. It is also the reason why we are an under-insured nation and why our pension regulator has made no headway. But, put a set of neutral people connected with the financial sector in a room and the focus immediately becomes the consumer. At an interesting panel discussion organised by CUTS International on 16th December, there was a strong consensus that ‘there is need to focus on the consumer as the core purpose of all financial sector regulation’.

What do I mean by regulators’ dance around consumer issues without addressing them? Consider how the Securities & Exchange Board of India (SEBI) deals with mis-selling of products to retail investors. First, it makes it impossible for genuine and honest advisors or brokerage firms to function by tying them up in costs, rules, red tape and permissions. Those who ignore the regulator happily fly below the radar, unless they do something so big and foolish that they are caught. And, even the honest and ethical, who occasionally stumble on meaningless rules, are hauled over the coals.

Instead, exemplary punitive action in select cases or adopting a class action approach to mis-selling techniques will get better results. Consider the Suchitra Krishnamoorthi case that we have repeatedly documented. SEBI took long enough to issue a show-cause notice to HSBC and is now hearing the matter. A stiff monetary penalty and disgorgement order will really send a strong message to banks who have perfected the art of mis-selling of third-party products to their customers. Banks violate their fiduciary responsibility to customers when they mis-sell mutual funds, insurance or wealth management services; they get away with it because the Reserve Bank of India (RBI) has a hands-off approach to products that have separate regulators.

Tough action by RBI or SEBI in Ms Krishnamoorthi’s case would fall squarely within the new global thinking on consumer protection, which has moved away from the meaningless disclosure-based regime that we continue to follow to a policy of ‘treating customers fairly’ and ensuring that financial products are simple, easy to understand and sold on the basis of the customers’ needs and financial profile. Let’s look at a couple of key issues that came up at this consumer-centric discussion.

The multiplicity of regulators, and having similar products regulated by different regulators, leading to regulatory arbitrage and conflict between regulators was flagged off as an important concern. Turf wars between SEBI and the insurance regulator and the fact that we have a separate pension regulator when asset management companies will manage the pension funds were cited as examples.

A prominent view was that the lack of coordination between regulators was the key reason for conflicts and inappropriate regulation. And coordination was missing because regulatory bodies had become sinecures for retired bureaucrats who, often, bagged these posts without any relevant experience in the sector. These appointees were then expected to decide on complex, technical and developing issues—a tough act even for those with decades of experience in a given sector. This would not have mattered if regulators were accountable to parliament. Unfortunately, even the standing committees of parliament do not exert any clout because very few members have domain knowledge of, or interest in, regulation, good governance or consumer protection.

In the past year, the appointment of SEBI chairman has been the subject of multiple litigations. There is now a move to extend the term of the current incumbent through an executive decision. Such ugly controversies can be avoided if key appointments are validated by parliament or a select parliamentary committee as is done in the US.

Many panel members felt that the FSLRC’s (Financial Sector Legislative Reforms Committee) recommendation has provided answers to many of these issues by proposing a unified regulator. Unfortunately, dissenting notes by three of the FSLRC’s key members marred the report. One would have thought that a committee as eminent as the FSLRC, which operated on a generous public budget, would have understood the need to hammer out a consensus and present a set of unanimous and unequivocal recommendations. We also find it strange that FSLRC made almost no effort to engage with consumers or consumer organisations in the financial sector.

Prithvi Haldea, chairman of Prime Database group, raised a very significant issue. He pointed out that the absence of a systematic data collection, analysis and interpretation mechanism, that could feed into policy- and regulation-making, is resulting in poor regulation and a lack of regulatory predictability. Mr Haldea’s www.watchoutinvestors.com has been providing yeoman’s service to consumers by publishing orders of a slew of regulatory agencies, quasi-regulatory and self-regulatory organisations in the financial sector and those under the ministry of corporate affairs. Watchoutinvestors.com is doing the job that the government and our regulators ought to be doing, in creating this goldmine of collated, cleaned and standardised information which can be the basis of significant academic research and policy-making. Instead, regulators hardly give the work its due and Mr Haldea says he, often, receive threats and requests to remove regulatory orders posted on the website.

Citing an example of how data capture can improve regulation, Mr Haldea pointed out that promoters, often, reclassify themselves as public investors in order to sidestep regulations and disclosure rules. They also change the classification repeatedly, without any fear of detection, since regulators have no mechanism to track the mischief. In one case detected by Mr Haldea, a promoter had changed his classification from promoter to public investor as many as five times. In the absence professional data-mining, there is no scope for detecting or acting on early warning signals thrown up by these corporate actions.

We, at Moneylife, believe that data-mining and analysis that Mr Haldea refers to, especially with regard to information filed with the registrar of companies, is critical to detect and act against thousands of ponzi schemes or direct marketing scams that are looting gullible Indians everyday.

What was evident from this discussion was that almost every regulatory change that would be considered imperative to true consumer protection would be opposed by corporate lobbies as well as government bureaucrats who enjoy a five-year extension to the power and perks they draw at the highest level. A quick data check would also reveal that all top regulators spend over half of their time on foreign tours. This leaves little time for serious consumer protection. The result is that we have endless articulation and forced spending on ‘financial literacy’, but very little action on the ground.

Sucheta Dalal is the managing editor of Moneylife. She was awarded the Padma Shri in 2006 for her outstanding contribution to journalism. She can be reached at [email protected]

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    COMMENTS

    sathyacumaran

    6 years ago

    sathya cumaran
    operational head india
    singapore media and channel group
    in the country like india where customers are really fools and their interest is nevr taken into consideration the only motto of business house is to cheat their customers and govt interest is to earn as much as they can for their future generations that is reason why the sons and daughters of politician fight among themselves for power and moeny and end theri life

    R P SHIVKUMAR

    6 years ago

    Brokers are famous for thier misselling to earn brokerage. I had a very bad experience with India Infoline about 6 years back. I had given them Rs 1 lakh to invest in the market after they had come to my home and promised they will give me guaranteed returns of 15 %. I had told them to make only investments and not trade. But the company's franchises used to trade daily in the market and earned brokerage but i did not earn anything. My mistake was that i relied on them and did not stop the pratice. The result was that i lost all my money in January 2008 crash due to overtrading and mismanagement.I had complained to NSE but lost the case as nothing could be proved. There have been other complaints against India Infoline who had won the award as best broker in Asia.
    The rules are against small investors who rely on the name of the broker and are thus cheated.
    Similar is the case with insurance companies
    R P Shivkumar
    [email protected]
    9820213945

    REPLY

    Dayananda Kamath k

    In Reply to R P SHIVKUMAR 6 years ago

    it is not only brokers even the regulator and ministry of finance is hand in glow in this system. that is why there is mass looting going on in financial market.

    Sucheta Dalal

    In Reply to R P SHIVKUMAR 6 years ago

    Mr Shivkumar. You are just the profile of persons who led us to start Moneylife foundation. It is a not-for-profit organisation. I would urge you to go to our website http://foundation.moneylife.in and watch some of our videos under events. It will help you not to get cheated.
    As for your insurance issue, you will find hundreds like you. If you write to moneylife, do register under the insurance helpline - it is free. you will find details in the right hand column right here!

    nagesh kini

    In Reply to R P SHIVKUMAR 6 years ago

    never give money or a carte blanche to trade by way of a p/a.just order them to buy shares of aaa companies, monitor them with their advice and sell them at the appropriate time or simply hold on to collect dividends and bonus. pms is for people who have idle money to throw around and not for you and me!

    sreenath

    In Reply to R P SHIVKUMAR 6 years ago

    sathyacumaran
    operational head india
    singapore media and channel group
    I have solid proof such my letters for issueing physical contract slips and ledger and holding statment and revocation of POA and margin fudning AND non issuance of Delivery insitruction booklet inspite of this the sebi nse bse are not taking the case this shows that these insitution are waste or infact our indian adminsitration is so weak that corruption at all levels inculding the adminsitrative services and this shows how weak is the indian govt and now we have decided to expose this episode of maladminsitration to international court to expose about indian adminsiteation before that we need moneylife support india infoline and reliance securities had cheated me we need jsutice

    sreenath

    6 years ago

    sathyacumaran
    I would like to bring it the notice of Money life that NSE BSE SEBI Never do any justice to the individual investors even the IGRP meeting where the judges are unaware of the rules and regulations of the stock exchanges even what ever the rules they knew if they put forth to stock broking representative inspite of the stock broking firm representative accepting that they have not compiled the rules of the stock exchanges in front of the Exchange staff neither the exchange staff nor the IGRP judges have any authroity to issue show cause notice to broking firm we feel that these IGRP judges are those Advocates who donot have any practice and who loiter in the court complex for cases and they are in favour of broking houses for which they would be sufficently rewarded for softpeddaling the issue and more over the broking firms inspite of lapses on their side they try to use the Police force to keep the investors at check and as sn investor and affected person we request the moneylife to take this issue and restore justice to the client is humbly messaGe given to Madam Suchetra Dalal

    REPLY

    Dayananda Kamath k

    In Reply to sreenath 6 years ago

    fully agree. i had the same experience when i filed a complaint with mrtpc.even though the broker has given it in writing that what i have complained is happening. the mrt lawyer or the judge could not take that into account to decide the case. even mrtpc did not make sebi a party to the case.even today i dont know what happened to the cse filed by mrtpc on my coplaint. and i was called as witness.

    Dayananda Kamath k

    6 years ago

    unless the regulator understands their main purpose and duty it is of no use bringing out their failures. regulators are for after retirement posting to the beurocrates and bank chairmans and financial institutions executives. the revnue to them is generated by the participant institutions and not by the small investors so they have vested interest to protect these institutions. so they make a web of rules so that small investor is duped by quoting one or the other rule and institutions are provided with an escape route legally. this is todays rules and laws being enacted.

    REPLY

    sreenath

    In Reply to Dayananda Kamath k 6 years ago

    sathyacumaran
    why cannot the moneylife take this issue when we file an compliant in sebi or nse bse they appoint some advocates who donot w=have any knowledge about the subject and they say to go for arbitration when the case never warrants for arbitration but we can bring this episode to media lime light as our FM shri PC rightly said only 2% of the population are into the market if we bring that also that would also would vanish and inflation would crop to three digit as well wisher of indian economy and country we request RBI and MCA to look into matter and solve this issue before any catstrophe could take place

    sreenath

    In Reply to Dayananda Kamath k 6 years ago

    sathyacumaran
    hai dayananda kamath the regulators main duty to brake the law framed by them because only the chairmans are appointed from the panel who are close to ruling party and who polish the shoes the politican and down below staff are govt employee either recurited by UPSC or CAT such as professional like CA MBA and other management institutions and they are bothered about their position and authroity and the stock broking house legal fertinity are mainly law brakers and these staff of sebi nse bse knew the law brakers inorder to get their personal benefit they softpeddal the issue and as such we feel that justice is denied in capital market sector as rightly said PC our FM where only 2% of the toatl population are into stock market that to would be washed in course unless justice is done as an international journalist and also an member of AAP we are now mobilising and movement to restore justice in capital market sector we need your supprot

    Dayananda Kamath k

    In Reply to sreenath 6 years ago

    sure i am prepared to support and also provide the material. i am fighting these issues since last 10 years. has sent some material even to aap office also.

    nagesh kini

    In Reply to Dayananda Kamath k 6 years ago

    mr. kamath your 10 year battle will go on for ever our regulators are just tooth less tigers that can neither bark nor bite. they levy heavy penalties only to get them watered down in appeal. you are fighting a loosing battle!

    nagesh kini

    6 years ago

    The consumer interests are always seen to be the last in the order of priorities and more often than not totally absent too.
    Notwithstanding SEBI Chairman Sinha saying "Big or small, all culprits same."
    Reminds me of what George Orwell wrote in his Animal Farm ".. but some are more equal than others." Like RIL challenging SEBI decision for not considering consent settlement to get away without admitting guilt!

    REPLY

    sreenath

    In Reply to nagesh kini 6 years ago

    sathyacumaran
    CHairman of SEBI or RBI are appointed by the central govt who will abide by the rules and regulations of central govt and these officials IAS and IPS inorder to have their power and position they lic the shoes of politician this ia an pitiable condition in india even if there are any straight forward IAS or IPS officers they would be shuntted out to unimportant post and as such the constitution should be amended in such manner that Administration and Politics should be separated there should be apex body for Indian administrative service like an act passed in Parliament and they should be full pwoers like Election commission or Supreme court or CAG then only we can route out the corruption from india till then officals corruption and braking of rules and regualtions owuld be common we request moenylife fight for our cause hats off to them

    sreenath

    6 years ago

    sathyacumaran
    operatrional head india
    singapore media and channel group
    the Indian capital market sector especially stock market and their controlling authorities like sebi nse and bse does not have any ethics or they are intrested in implemetning the law infact we can rightly say the law makers are the law brakers for firnge benefits they derive from the stock broking firms either monetary or non monmetary this is becuase when the unscurpulous politician who in their tenure of five years loot the country and officials who are guiding them in their loot are also tempted to loot and as such in indian adminstrative system earlier there was only saying that there is no accountability but in present scenario we can say there is no honesty no integrity and no morale because our legal system is so weak and prolonging issue that people attitude to forget the issue is rampant unless the media and channel continuously monitor its difficult even the organisation like money life who are fighitng for investors right are threatened by big stock broking houses and also from official missioneries from sebi nse and bse alos from MCA to softpeddal for future election if such is case where is question of justice is the case minority retail investors condition is pitable and among them is mine also hope after reading this we expect some justice otherwise only GOD should save our country from the cluthces of corruption and thsoe culprits should be taught an lesson which is happening in the current session in my case India infoline stock broking firm had cheated to exten of rs 25 crores and this case was dragging for eight long years without any clue and now NSEEL the Spot exchange had cheated IIFL to extent of rs 300 crore this is an official figure announced by IIFLbut unofficially it would have exceeded Rs 1500 crore to be frankly saying there is GOD above us who is watching all our activity and rightly punishes and this fitting example after learing this i request IIFL to consider and refund my rs 25 crore plus interst without further delay hope that would be done

    P M Ravindran

    6 years ago

    'Judicial system has not been able to meet even the modest expectations of the society. Its delays and costs are frustrating, its processes slow and uncertain. People are pushed to seek recourse to extra-legal methods for relief. Trial system both on the civil and criminal side has utterly broken down.' Also, 'Thus we have arrived at a situation in the judicial administration where courts are deemed to exist for judges and lawyers and not for the public seeking justice'.-REPORT OF THE NATIONAL COMMISSION TO REVIEW THE WORKING OF THE CONSTITUTION.

    If that is the condition of our courts the quasi judicial organisations are worse. In fact the Consumer 'courts' established under the Consumer Protection Act has actually turned the Act into Consumer Persecution Act! For some telling examples please read my blog at http://raviforjustice.blogspot.in/2011/1...

    REPLY

    nagesh kini

    In Reply to P M Ravindran 6 years ago

    I entirely agree. I had filed a complaint against the then Indian Airlines Corporation for refund against lost air ticket, possibly the only complaint that the refund was ordered and paid followng the District Forum verdict, IAC went in appeal to the State Forum that upheld it. IAC took it to the National Forum
    on a technical ground that the IAC "constituted a state" it was upheld but with strictures passed!

    Dayananda Kamath k

    In Reply to P M Ravindran 6 years ago

    that is the reason rahul gandhi wants for every trivial issue bring a law so that you can go on fighting in courts of law paying hefty fees to lawyers and even judges and your case will go on for ever.this country do not need laws it needs prper implimentation of existing laws.

    Abhijit Gosavi

    6 years ago

    Does this lack of regulation also explain why the Mumbai stock market is so unreliable? It came as a shock to me recently when I learned that index funds in India do worse than managed mutual funds. The reverse is true in most mature/robust stock markets.

    SuchindranathAiyerS

    6 years ago

    Putting consumers at the center would interfere with suborning the resources of the State to the personal pelf, pleasure, pomp and power of India's ruling elites?

    Vaibhav Dhoka

    6 years ago

    Here CONSUMER or AAM Admi has no voice is his/her,their condition is like Guinea Pig which are used in lab testing.

    nagesh kini

    6 years ago

    You're bang on Sucheta.
    "Protecting consumers" is the least of the priorities of any of the service providers as also their multiple regulators who pay only lip services.
    The govt. and the Planning Commission are seen only to multiply/increase the numbers of the so-called Regulators who have proven they are toothless tigers and watch dogs that can neither bark nor bite.
    Even the Consumer Disputes Redressal Fora are no better than judicial courts - they blame lack of infrastructral support.
    The poor aam admi consumer is left to fend for him/herself as the Members of the Regulators enjoy safe sinecures and perks!

    Govt seeks review of Supreme Court's verdict on homosexuality
    The union government contended that the Supreme Court arrived at various conclusions which are contrary to well-established canons of law as laid down by this court
     
    The Indian government on Friday moved the Supreme Court with a review petition seeking re-examination of its verdict on Section 377 of Indian Penal Code (IPC), reviving the penal provision making gay sex an offence punishable with life imprisonment.
     
    The review petition contended that the 11th December judgement of the apex court setting aside the Delhi High Court verdict decriminalising sexual intercourse between same sex of consenting adults is unsustainable.
     
    The Centre’s petition settled by Attorney General GE Vahavati sought that oral arguments be heard in an open court before disposing of its review petition.
     
    The review petitions are generally decided in chamber hearing.
     
    In the petition filed through advocate Devdutt Kamath, the Centre has taken 76 grounds to contend that the judgement passed by Justice GS Singhvi (since retired) and Justice SJ Mukhopadhaya 'suffers from errors apparent on the face of the record, and is contrary to well-established principles of law laid down by this court enunciating the width and ambit of Fundamental Rights under Articles 14, 15 and 21 of the Constitution'.
     
    While setting aside the 2 July 2009 judgement of the Delhi High Court, the Supreme Court had held that Section 377 (unnatural sexual offences) of the IPC does not suffer from the vice of unconstitutionality and that the declaration made by the High Court is legally unsustainable.
     
    The review petition filed by Ministry of Home Affairs said Section 377 of the IPC, insofar as it criminalises consensual sexual acts in private, falls foul on the principles of equality and liberty enshrined in the Constitution.
     
    “It is further submitted that Section 377 which criminalises intercourse ‘against the order of nature’ is a reflection of outdated sodomy laws of the United Kingdom which were transplanted into India in 1860.
     
    “They do not have any legal sanctity and in any case are unlawful in view of the constitutional mandate of Articles 14, 15 and 21 of the Constitution,” the petition said, adding this court has held that “a statute which was justified when enacted could, with the passage of time, become arbitrary and unreasonable.”
     
    Further, the Centre contended that the apex court arrived at various conclusions which are contrary to well-established canons of law as laid down by this court.
     
    “The Union of India, in the present review, will deal with each such conclusion to show errors apparent on the face of the record, being wholly contrary to well-established canons of law,” it said.
     
    While assailing the verdict, that came under attack as being “medieval and regressive,” the review petition said the submissions of the Centre made during the hearing of the appeal that the high court’s judgement did not suffer from any legal infirmity were not at all considered by the apex court.
     
    “The Union of India, through Ministry of Home, had taken a categorical stand at the time of hearing of the appeal before this court that there was no legal error in the judgement of the High Court dated July 2, 2009, and, therefore, no appeal was filed by the Union of India against the said judgement,” the review petition said.
     
  • User

    COMMENTS

    Abhijit Gosavi

    6 years ago

    The LGBT community should have the same rights as straight people, and they should be able to lead dignified lives! This is 2013 --- not my grandfather's era. Indians need to open their minds.

    ABHA CHAWLA MOHANTY

    6 years ago

    MEDIEVAL AND REGRESSIVE..?,ARE WE AS NATION OCCUPIED WITH "REPRESSIVE"... ALL TIME FREUDIAN RELEVANCE......!!

    ABHA CHAWLA MOHANTY

    6 years ago

    MEDIEVAL AND REGRESSIVE..?,ARE WE AS NATION OCCUPIED WITH "REPRESSIVE"... ALL TIME FREUDIAN RELEVANCE......!!

    Who is Devyani Khobragade?

    Devyani Khobragade claims the value of her properties at Rs1.78 crore plus three tracts of land in her own statement to MEA. A lot of her properties are inherited from or gifted to her by her father, Uttam Khobragade, a controversial former IAS officer

    Dr Devyani Khobragade, the officer from Indian Foreign Services (IFS) cadre is at the centre of a diplomatic row between India and the US. In order to ensure full diplomatic immunity post the arrest and release episode in New York, Dr Khobragade was on Wednesday transferred to the Indian permanent mission at UN in New York. While several people know about her father, Uttam Khobragade, a retired officer from Indian Administrative Services (IAS), nothing much is known about Devyani Khobragade. What is interesting are the huge assets in her name, a lot of which was gifted by her father, a controversial officer of the IAS.

     

    According to a statement submitted by Dr Khobragade to the Ministry of External Affairs (MEA), as of 31 March 2012, she owned 11 properties, including flats and land in Maharashtra, Kerala and Uttar Pradesh. She declared some of the flats and land as 'inherited' from her father while others were bought by her. As per the declaration, Dr Khobragade earns a salary of Rs50,350 (including grade pay) per month, while generating revenues of Rs2.26 lakh a year from all her immovable properties. The total value of properties, excluding three agriculture land, owned by Dr Khobragade is Rs1.78 crore as per her statement. In short, as of 31 March 2012, Dr Khobragade was earning total revenues, including her salary and income from properties, of Rs8.30 lakh for FY2012 and owned properties of Rs1.78 crore, plus market value of three tracts of land.

     

    However, as per the present market value, her properties may be worth more than Rs6 crore as her 1,000 sq ft in the controversial Adarsh Coop Housing Society (Adarsh CHS) in Mumbai alone is worth about Rs4 crore.

     

    Dr Khobragade stated that she bought the flat in Adarsh CHS for Rs90 lakh by selling a flat in Meera Coop Housing Society at Oshiwara in Mumbai. While this may look good on paper, the reality may be quite different as the property rates between Oshiwara, which is located between Goregaon and Jogeshwari, and Colaba, the prime location of the Adarsh CHS, are way apart. For example, at present a flat in Colaba is priced between Rs39,400 to Rs43,600 per sq ft, while the same in Goregaon costs between Rs14,800 to Rs15,300, per sq ft as per Magicbricks.com. In short, the price difference between a flat in Colaba and Oshiwara is about three times. She did not mention the purchase price or value of her Oshiwara flat in the statement, though.

     

    In 2006, Dr Khobragade purchased a non-agriculture plot measuring 5,000 sq ft at Alibag from Maharashtra Housing Area Development Authority (MHADA) that is shows as worth Rs10 lakh in the statement. As a co-incidence, her father was the chief executive (CEO) and vice president of MHADA between 2000-02 and 2004-05. Even this plot is worth over Rs50 lakh as per the current market price.

     

    As per the statement filed by Dr Khobragade, out of her 11 properties, she purchased only four, while rest were either inherited or gifted or transferred by her father over the years. Besides, a flat in Adarsh CHS and plot in Alibag, Dr Khobragade also purchased a flat measuring 500 sq ft at Kanchanwadi in Aurangabad district for Rs7 lakh and a plot of 200 sq metres at Swarna Nagari Greater Noida in Gautam Buddha Nagar district, Uttar Pradesh for Rs20 lakh. According to the statement, she bought the Swarna Nagari plot by selling a house at Gurgaon from Ansal Building. But there is no value attached to her Ansal Building house in the statement.

     

    For three agriculture lands, Dr Khobragade inherited from her father and from which she earns an annual income of Rs70,000, there is no purchase value mentioned. This includes 25-acre land at Gowardhan village in Chandrapur district, 8-acre land at Gawahne village in Ratnagiri district and 2-acre land in Kalamb village in Raigad district.

     

    Dr Khobragade earns highest revenues of Rs1.20 lakh during FY2012 from a flat measuring 800 sq ft at Kondwa in Pune that was purchased by her father in 1995 and as of March 2012 was valued at Rs25 lakh.

     

    Uttam Khobragade also gifted two land parcels measuring 2.02 and 2.7 ares in Ernakulam district of Kerala to his daughter on 20 December 2011. Present value of these two plots is shown as Rs16.35 lakh in the statement submitted by Dr Khobragade to MEA. Mr Khobragade also transferred a plot measuring 3.97 ares (9.805 Cents) in Pallipuram village in Kerala to his daughter's name on 2 January 2009. This is valued at Rs5 lakh.

     

    Here is the statement of immovable property returns of Dr Khobragade as on 31 March 2012…
     


    According to a report from Indian Express, Uttam Khobragade's name had also figured in the Adarsh CHS scam and he was accused by the Central Bureau of Investigation (CBI) of helping the CHS use higher floor space index (FSI) than permitted by allegedly transferring an adjoining plot reserved for a BEST bus depot to Adarsh. “He and Devyani, it was alleged, had got a flat each in the society as quid pro quo. Khobragade, who had denied any wrongdoing in the case, Wednesday said he and Devyani would not return the apartments. Devyani, who already owned a house in Mumbai — which too was allotted under the state government's 10 per cent quota — got the Adarsh flat after she applied for it,” the newspaper said.

     

    Uttam Khobragade, who was the general manager (GM) of Bombay Electric Supply and Transport Undertaking (BEST), on 15 December 2007 introduced AC buses in Mumbai by labelling them as King Long buses. These so-called King Long buses  that used to cost Rs40 to Rs45 lakh at that time were not even made in China but in our own Mohali and that too by a local manufacturer using few parts from the Chinese company.

     

    According to a report in Mumbai Mirror, the King Long buses, sold to commuters as top-of-the-line Chinese import, were not King Long buses at all. “The purple buses you see breaking down every now and then have nothing to do with the Chinese bus maker Xiamen King Long United Automotive Co, except a mechanical part here and there. The rickety clunkers that have given the usually efficient BEST a bad name are Cerita buses put together by an Indian company JayCee Coach Builders (JCBL) at Lalru, Mohali in Punjab,” the newspaper said.

     

    During the inauguration ceremony on 15 December 2007, both the then chief minister Vilasrao Deshmukh and Uttam Khobragade, the then GM of BEST referred to these buses as King Long, says Mumbai Mirror. For years Mumbai had been sold the lie of these haphazardly put-together vehicles with a ridiculously high incidence of breakdowns—4,037 in two-and-a-half years for 285 buses—boasting of a Chinese lineage, the newspaper report said.

     

    Khobragade, the then GM of BEST when these AC buses were introduced in services, told the newspaper that since the matter is too old, he can't remember the specifics.

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    COMMENTS

    Parvez Jamasji

    6 years ago

    with dalits like the Khobragades i pity the dalits in india. they either learn how Khobragades live or they REMAIN "DALITS" THROUGH OUT THEIR GENERATION AS THEY LIVED IN THE PAST 5000 YEARS !

    sreekumar

    6 years ago

    request the writer to differentiate between ARE and ACRE....its a huge difference

    Gordon Jacobs

    6 years ago

    I was always sure some one would dig the grave deep.

    shadi katyal

    6 years ago

    One wonders why we Indians cannot keep our minds on the subject in question but keep changing the issue being discussed.
    The Issue here is that Why Devyani married to a foreigners was posted to New York. Why did she commit felony and why GOI knowing the facts did not try to settle before it went to court.
    The question is will India childish and prankish removal of safety barriers, cancelling Diplomatic cards and imposition of import restriction will bring any results.
    Why accusations of conspiracy and kidnapping etc. show any maturity on MEA officers.
    Since she is married to US Citizen and now resident of USA,will she fill joint income tax with her husband and declare her properties in India or hide those???
    By posting her India has opened a can of worms.
    Can GOI answer why she was passed over other seniors and why the fact her marriage to a foreigner was never brought out.
    Is she not a security threat????

    REPLY

    Parvez Jamasji

    In Reply to shadi katyal 6 years ago

    BECAUSE WE ALL LIVE IN A COUNTRY WHERE "CHOR KOTWAL KO DAT THA HAI" !

    Prasanna dulipeta

    In Reply to shadi katyal 6 years ago

    Shadi, you are right again. The need of the hour is to stay focused on this issue rather than generalize issues. The pertinent issue now is why did MEA post her there when she has married an American and why did they move her to New York to grant her complete immunity? Has the Government of India become blind to her illegal activities? While i do agree that it is the duty of our Government to protect its citizens abroad, is it the way to react by withdrawing the id cards and security of American Embassy and its staff? Self respect is above all but decency and understanding is equally essential and has our diplomacy failed in this case? Her backgroud as known from these sources reveal her high connections for the government to have reacted like this. If it wa not she would the reaction be of the same gravity?

    shadi katyal

    In Reply to Prasanna dulipeta 6 years ago

    Mr. Dulipata if you read all what MEA is saying is covering its mistake. GOI has never declared what its policy is about such married officers to foreign nationals and some of the media is unwilling to investigate as they might loose Tender notices etc. One wonders if she is being over protected due to her being a Dalit and influence of her father.
    Have we lost all our clear thinking as she was arrested and searched. USA State Department notified Indian Embassy but we dropped the ball. Why was she and her staff not called back.
    If she had full immunity as being claimed now why did GOI ask the UN to accept her now and new ID to be issued.
    One wonders if MEA is in touch with reality of Diplomatic services? By such childish retaliation we cannot prove our self respect. Are we happy being a laughing stock of the world.
    We have tried to cover more than let the people know what is truth and we may never find out.
    Did we hear anything about Ms.Gupta who was giving our secrets as pillow talk or who was responsible for issuance of multiple Visa to Headley? Where are the raw emotions of our countrymen in those issues???

    Rajesh Premani null

    In Reply to shadi katyal 6 years ago

    Here,Ms. Shadi I hold the media completely responsible since they have not done their job or maybe they desire to make us believe to serve their agenda. Surprisingly there is not even a passing mention regarding the direction the law would take should Khobragade's husband be of US origin while Khobragade belongs to India. BTW why has she not given up her Indian citizenship now that she's married to an American citizen and also "partially" settled in the US? Would such concessions be offered to her had she not been Uttam Khobragade's daughter? Does the press have something to do with the MEA cover up act? Why is there so much bonhomie between the MEA and the media? Does it have to do with something that the MEA and media don't really want us to know?

    shadi katyal

    In Reply to Rajesh Premani null 6 years ago

    First let me correct that I am not Ms but Mr. No harm
    It is well known that she was passed over many seniors who were more eligible than Devyani. Yes her father has played a very important part as we seen on TV.
    Media has failed because they are afraid to loose the advertisement revenue and thus follow the master.
    This paper is the only one done service to the nation.
    She had been married for about 10 years and has children from this marriage and could be the reason of her posting so could be closer to her husband who is an American but has never been mentioned by media. She can settle down in USA but cannot become a citizen as long as case is pending. Statue of Limitation might play some part.
    There is much more than meet the eye and since Indian media is unwilling to do any investigation we will never find out even some criticism is being shunned.
    I asked simple question does GOI and MEA allopw such posting or even selection to MEA post. When was she selected and did she passed her IFS test before or after marriage???Did she get permission from MEA for such marriage. She has proved to be Cassandra for India.
    Why is MEA and GOI protecting her??
    What about her flat in Adresh society which she got on false statement???Too many questions???

    Rajesh Premani null

    In Reply to shadi katyal 6 years ago

    Sincere apologies for the addressing you incorrectly, Shadi Sir.

    This is exactly the issue and just no one is talking about the perspectives that you and others have so vehemently and succinctly pointed out. Shocking is the fact that although she is married to a US based citizen, the MEA has taken this aspect so lightly and has successfully and cunningly circumvented and polarised her sins and contraventions of law, and instead played a complete cover up game, by blaming the US instead. God alone knows when such kind of nonsense would ever stop.

    captainjohann

    In Reply to shadi katyal 6 years ago

    Why not investigate the posting of present ambassador Mr.Jaishankar whose childrren are having green cards. In fact nobody who have some personal interest in the host country like husbands,wives,children aspiring for citizenship etc must not be posted to that country at all.

    Rajesh Premani null

    In Reply to shadi katyal 6 years ago

    Shadi, you are right. We aught to have the focus in the right place. You and our other friends @MoneyLife have made poignant, valuable points that need merit and bulldozes any prospective arguments that could emanate from the MEA, Khobragade's or the MEA. Having hit the nail right where it aught to, it would be hard (if not impossible) for the Govt to answer these questions. The issue is, how do these questions reach those ears who matter! And most importantly, how they can make these issues matter?

    shadi katyal

    In Reply to Rajesh Premani null 6 years ago

    Thank you Rajesh ji.
    I agree that how do we get any replies or satisfaction from GOI and MEA as I feel they live in cocoon and feel that whole world revolves around them and thus not responsible, or capable to answer. Our old colonial mentality and bureaucracy is the norm and we have shown our childish policy in this case.
    This case could had been solved had the MEA taken action against DEVYANI and called her back for consultations but instead filed a non bail able case against Sangeetha Richard which drove her to NY attorney office and it blew in our face.
    Was MEA not aware of her marriage to an American Citizen or was it a post for her to join with him but what about security???
    There is much more swept under the carpet and this can of worms must be opened.
    We are thankful and congratulate this paper for being honest and bringing this issue to for front but other media has tried to cover it. As a matter of fact TOI yesterday wrote an article full of prejudices and sound like paid add for her. Not a word of her false allotment of flat in Mumbai etc. So unless our Media is honest and free of prejudices we will see more such red herrings.
    God help us

    Prasanna dulipeta

    6 years ago

    nothing comes free in this world and one has to sacrifice somewhere to gain something more valuable some where else. We have today to choose between small evil and greater evil. Experience has proved that some are better than the others though we are yet to see the best. However it is too very difficult to satisfy every one especially in public field. There is a saying in Kannada which goes to say that what one does is the best, what one's son does is better and what others do is the worst. However, we can be guiding force while exercising our franchise for better and proven people.

    ckr

    6 years ago

    Time to rethink the reservation policy.. how come she availed of all the reservations of being a dalit, dispite of her father being a ias officer and she getting exposure to good education. thus proves the shortcoming of the reservation policy. it should have rightly gone to a poor dalit student. reservations for dalits should only be applicable for the economically weaker ones. else you will have deyanis children also making use of the reservations to get into premium education in india...

    REPLY

    Prasanna dulipeta

    In Reply to ckr 6 years ago

    Congress has survived for the last over 60 year in power, save for a term during NDA rule only on the basis of appeasement politics and reservations. Even thogh the founding fthers of our constitution wanted to bring the down trodden on par with the rest of the society in 10 years, it is the failure of the party in power to restore them the status of equality till date and actually pushing them further backwards by doling out reservations. Reservations should only be on the basis of economic backwardness and no other consideration. In fact in today's world, even the economically backward and deserving candidates have the option of seeking financial aid from philanthropists and banks for their future growth.

    Rajesh Premani null

    In Reply to Prasanna dulipeta 6 years ago

    There is no ideological difference between the two largest political parties of our country. One that is ruling and the other that is aspiring (to rule). The difference is that Congress has mastered the techniques of appeasement to perfection. Till the time we have appeasement politics, individuals and commoners like us would find progress tough in any field that deserves change. To make changes happen we would have to be the change catalyst. Being the change catalyst requires some level of sacrifice .. are we game ?

    Rajesh Premani null

    In Reply to ckr 6 years ago

    In fact, they've mastered the art of manipulating the porous system to their advantage. But that's how the system works in India. Rightly said, we now need to work to overhaul the system. If you read today's news, Mr. Khobragade wants to use the sympathy wave and launch himself into politics !!

    Rajesh Premani null

    6 years ago

    Don't understand why MoneyLife has taken this news article off their main page. Please listen to the voice of your readers, dear MoneyLife. We desire that you take this issue to the Government or the Authorities. Now the Khobragade's desire to stand for elections! GOD save the nation. And spare humanity.

    REPLY

    Sucheta Dalal

    In Reply to Rajesh Premani null 6 years ago

    This is an automatic process. We request readers to join our efforts. We are a tiny organisation which can bring facts to light. People need to be there to take things forward sir. How about you being a part of Moneylife and working shoulder to shoulder with us? We already do thing beyond our staff and financial resources.

    Rajesh Premani null

    In Reply to Sucheta Dalal 6 years ago

    Thank you very much for your revert Sucheta. Wondering how I could be of help here. I'm writing to vent ire on the system. Money, fame or power don't inspire contributors like me, however I wish to make an impact in the life of a common man. I'm seriously contemplating "doing something tangible" to change the status quo. And am determined. Maybe MoneyLife could offer a platform and guidance to people like us.

    Rakesh Goyal

    In Reply to Rajesh Premani null 6 years ago

    Bravo, Rajesh. Synergy will bring change.

    punam sah

    6 years ago

    Devyani herself is not devoid of controversies. If investigated thoroughly, her getting into the IFS will also throw open can of worms. There was a case filed in Supreme court of her being favoured against another officer despite low grades. But the impasse with the US is a clear case of nexus between bureaucrats and politicians at the cost of the country. Sushil Kumar Shinde and Uttam khobragade had stakes in Adarsh. When the Indian embassy in USA was alerted of allegations against Devyani, instead of correcting the situation, they filed an arrest warrant against the maid in India- a show of muscle power. Now she gains privileges despite being a habitual fraudster. Her salaries, her privileges are being paid by us taxpayers. DO we want such a corrupt official representing India? She should be stripped of every privilege she earns on our money. Request Moneylife to pursue this case till she is punished for her several offences. In India we need equality before law. She got away here, but US should not let her go.
    regards,
    P

    shadi katyal

    6 years ago

    Since she is married to a foreign national how is MEA allowed her to be a Diplomat.
    Is she not a threat to the security of India or is she already recruited by CIA.
    Would GOI answer this. marriage is not new one and her husband is an American. She can never be an American citizen with
    Felony charges pending.

    REPLY

    Rajesh Premani null

    In Reply to shadi katyal 6 years ago

    I beg to differ Shadi.

    The MEA shall again give ultimatum to the US that they shall withdraw the privileges given to the US Consulate. And Khobragades shall rake up the issue with the IAS lobby, pull the rug from the Government threatening then backlash from the SC/OBC vote bank. Ask a senior bureaucrat or an employee with BEST about Mr.Uttam Khobragade and he would tell you more. Mr. Khobragade is disreputed with one more thing. He had falsely implicated an employee in BEST,by putting a false charge for insulting and calling him "SC". Not only that, he fought the case against that employee by using BEST funds.

    You can imagine to what extent and depth this vicious family can get to, to achieve their ambitions.

    That's the real Mr. Uttam Khobragade for you !

    Gordon jacobs

    6 years ago

    Very very interesting. I believe the Govt needs to investigate. what we read about the diplomat seems to be the tip of the iceberg.

    Hope the Govt will do their unbiased job.

    Prasanna dulipeta

    6 years ago

    LOOKS LIKE THE STORY OF A CORRUPT DAUGHTER OF A CORRUPT FATHER. YOU REAP AS YOU SOW. UNFORTUNATE THING IS THAT THE EVIL HAS HAPPENED AT THE HANDS OF A FOREIGN NATION.

    Prof ANAHAT HULYALKAR

    6 years ago

    How does one 'inherit' a living person's property? Such a phenomenon is unknown to law as it exists in India and almost everywhere else. Is it some kind of 'immunity' available only to ruling elite? How is she married a foreign national? Does it not compromise her position as an Indian diplomat?

    REPLY

    Rajesh Premani null

    In Reply to Prof ANAHAT HULYALKAR 6 years ago

    Dear Professor, the kind of points you and other member readers have brought out in the open are truly worthy of appreciation. Unbelievably true and eye opening aspects are being revealed one after the other. I have observed similar ire of the general public in other websites also where readers have shown absolute disillusionment with the manner that our MEA has dealt with this whole issue of the Khobragade family. Alas the Government is turning a completely blind eye to the sensibilities of the people of India, supported in full by the people of India, to the extent of being brazenly ridiculous by seeking to sever diplomatic ties with US on the whimsical grounds. I wish MoneyLife take such issues and make a representation on behalf of its readers. Hope MoneyLife is listening.

    nitin

    6 years ago

    i was first to comment
    but unable see the same ?

    nitin thakker

    Veeresh Malik

    6 years ago

    In this case, the children's father is American, and some element of liability and responsibility for paying the maid's wages is also incumbent on him, to the best of my knowledge, so what is the reality there?

    And if that is the case, then why is the Indian taxpayer being made to cover all costs of this episode, please?

    To me, it also sounds as though a case of an American father under-paying a maid-servant is being projected as something totally and only Indian.

    REPLY

    MOHAN

    In Reply to Veeresh Malik 6 years ago

    Thats a very good point. you have hit the nail on the head.

    Drashta

    6 years ago

    corrupt to the core. expled oitation in their DNA, has manifestated in their treatment of the downtroden. They have profited from thier status - both administrative and that of backward caste. They have recieved political patronage from Congress - the old hand at caste & religion games. May God save this country from rascals like these.

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