In the early 20th century, a board game, Monopoly, was designed to highlight the evils of land ownership and feudalism. Later, the Parker Brothers transformed it into one that almost revered free markets, capitalism and entrepreneurship. Players moved around the board, bought and sold properties, constructed houses and hotels, collected rents on their land and built an asset monopoly. The winner also strove to drive his opponents into bankruptcy.
The two Ambani brothers, elder Mukesh and Anil, have a similar strategy in their minds. While they aim to build the largest media conglomerates in the country, they desire to spread their wings to the US, Europe, South- and East Asia, Africa and West Asia. If the two estranged siblings join hands — as they have on some occasions in the recent past — they may emerge as the next News Corp, CBS Corporation, Time Warner, Bertelsmann AG, Walt Disney, Vivendi or Sony.
If their plans succeed, their media empires will span across genres such as print, broadcasting, radio and digital. They will own the distribution chains such as cable, direct-to-home (DTH), optic fibre (terrestrial and undersea), telecom towers and multiplexes. They will be present in various platforms, including
digital and telecom (2G, 3G and broadband). Their content will include news, entertainment, e-commerce, security, financial services, education, health care and governance.
Like the feared Rupert Murdoch, who owns News Corp, the Ambani brothers may become one of the world’s largest creators, acquirers and disseminators of content. To put it in perspective, Murdoch owns over 150 print publications, including Wall Street Journal and The Times (UK), cable and satellite channels and publishing houses. He controls distribution such as DTH and is present on digital platforms. He produces movies and TV serials and has music rights and telecast rights to major sporting events such as the National Football League (US). He is present on all the continents.
Breaking News: Ambanis dream of total media control
P C George sacking widens Kerala UDF rift
The crisis in the United Democratic Front (UDF) of the state will further widen in the coming days with the decision to remove Kerala Congress (M) vice chairman P C George from the post of Government Chief Whip. Sources close to UDF confirm that the removal of Mr Georgefrom the post is likely to fall in place once chief minister Oommen Chandy returns from his foreign visit to Dubai on Thursday. It has been learnt that the decision was taken after KC (M) Chairman KM Mani refused to budge an inch on his decision to remove Mr. George from thepost of Chief Whip.
With the reconciliatory efforts of chief minister Oommen Chandy and Minister P K Kunhalikutty failing, there is no option left with Mr Chandy but to remove George from the post and find an amicable solution to the deepening fall out in the front.
With the by-election to Aruvikkara, which was vacant after the death of Speaker G Karthikeyan, approaching and the elections to the Local Self Government’s to be established within a year, the ousting of George will be likely to cast a shadow over the future of the front.
George had himself found in troubled waters recently by airing the opinion that Mani should have resigned as finance minister soon after
the bar license bribery arose. The remarks sparked a controversy within the party and KC (M) legislators decried the permitting of Mr George to make denunciatory comments against the party and its leader. Mr George has been in the news while for his overreaching comments. But Mr Mani stood a mute stand on the leader as he is a man who knows too much about Mr. Mani’s shady deals. But the veteran leader was forced to initiate action against Mr George this time as he had exceeded the limits.
On Friday, after the legislature’s party meeting, Mr Mani conveyed the party’s decision favouring the removal of Mr George. Mr Mani said that the decision on Mr George was taken unanimously with all the eight legislators of the party voting against Mr George. “The situation has come to such an extreme that there is no other option other than to remove George from the post. He has been continuously reprimanded from making adverse statements against the party. He didn’t heed” said Mani.
Challenging Mani, Mr George on Friday said that he won’t accept the decision of the legislators meeting which he was not invited. He said that he ought not to be the victim of frightening, through the Chief Whip post and dangling the provisions of anti-defection laws. “It is not Mani who posted me as the Chief Whip. He had only asked for two ministerial posts and a deputy speaker post. It is after I denied taking up the deputy speaker post that the UDF decided to give the Chief whip post” said George. He added that he doesn’t want to continue mere as a puppet vice-chairman of the party and is ready to step down at any time.
“Chief Minister has asked me to wait until a solution is found. I am waiting for the decision” he said. He also made it clear about reviving his defunct Kerala Congress (Secular) and to continue as an independent ally in UDF.
Meanwhile, Mr George on Saturday denied about the removal decision and said that he had talk with chief minister in the morning and he was asked to wait until a solution was discovered before making any further statements.
Mr George said that he did not have anything to say as of now and more will be revealed after Easter if the decision goes against him.
Old Drinkers, New Bottles
P. Chidambaram, who was a finance minister thrice and presented nine normal Budgets and two interim ones, is an angry man indeed. He worked with several regimes, such as the Congress, the Third Front, UPA-I and UPA-II. He saw the yo-yoing of the country’s economy from its depths in 1991, to its pinnacle between 2005-06 and 2007-08, when it witnessed 8-plus percent growth in 11 consecutive quarters. However, he feels that he has never met a finance minister who knowingly decimated growth.
According to him, it was Pranab Mukherjee, the current President and finance minister during the first four years of UPA-II, who was responsible for the economic mess that India found herself in. He pursued policies that killed ‘inclusive’ growth, which was Chidambaram’s crowning glory during UPA-I. With a single stroke of the pen, in 2009, Mukherjee destroyed the foundations of a sound economy; something that his predecessor had assiduously built and concretised in the past five years.
The current FM, Arun Jaitley, is falling into the same fiscal trap; he is unwittingly pushing himself into a corner just like Mukherjee did. And the disastrous results will show their deadly tentacles within a couple of years, unless he is as lucky as his boss, Narendra Modi. In fact, Chidambaram feels that the worst blunder that any fm can make is to give up on fiscal consolidation and muddle up the financial state of the economy. Both Jaitley and Mukherjee are guilty of it.
Mukherjee and Jaitley differ. The former says that he had no options as the world was caught in the bear hug of the Financial Crisis of 2008. He had to ensure that India didn’t get injured in the process. In Jaitley’s mind, UPA-II’s policies — both Mukherjee and Chidambaram’s — were flawed. His second Budget (February 2015) was the most innovative in the past decade. It would spur growth, lead to development and lift the poor people out of their miseries.
To understand this blame game, as also why the FMs have differed so radically, one has to first go back in time to 2009, when the Congress-led coalition romped back to power. It was the most difficult of times. The developed world, including the US, was in a crisis; experts predicted that the world could witness a ‘Great Depression’, as was the case in the 1930s. Growth dipped globally and there were fears that the same may happen in the fast-growing nations such as China and India.
manufacturing, Photo: AFP
Fiscally Yours
In December 2008, Manmohan Singh, who was both the FM and Prime Minister then, announced the first of the three stimulus packages to accelerate growth. Mukherjee, who became the FM in January 2009 and again in May 2009, when UPA-II assumed power, announced a slew of measures to achieve the same objective. In his 2009 Budget speech, he explained that the aim was to “boost demand and increase expenditure on public projects to create employment and public assets”.
It was a standard Keynesian solution. During the Great Depression of the 1930s, John Maynard Keynes said that the only way out of the predicament was for the various governments to hike public spending. This was what the developed nations did; this was what Mukherjee did. The strategy worked; India and China were the only two nations where growth remained robust.
However, there was a flip side. The three packages impacted the fiscal deficit (the difference between government revenues and expenditure). It more than doubled from 2.7 percent of the GDP in 2007-08 to nearly 7 percent the next year. The total amount of stimulus, at 1,86,000 crore, accounted for the huge jump. It was possibly the single-most factor that led to high inflation, as the government printed money and borrowed more to fund the deficit.
The subsequent huge rise in food prices, over the next few years, sealed UPA-II’s political fate. As items of daily consumption, such as tomatoes, potatoes and onions, zoomed by several hundred percent, the regime’s electoral future was in disarray. Between 2009 and 2013, inflation turned out to be among the major reasons for the Congress and its allies’ defeats in several Assembly elections such as West Bengal, Uttar Pradesh, Tamil Nadu, Karnataka, Bihar and Delhi. In fact, Chidambaram hinted at this in his 2013 Budget speech. “At present, the economic space is constrained because of a high fiscal deficit… (and) a tight monetary policy to contain inflation…,” he said.
Globally Yours
What hurt were the changes in the global arena. Crude oil prices shot up. The price was $80 a barrel on 1 January 2010. By early 2011, it jumped by 50 percent to a high of $120. For the next four years, the price hovered around the $110 mark; it dipped to $90 in mid-2012, but rose back to over $110 within a few weeks. India, which imported the bulk of its fuel requirements, was one of the worst-hit nations. In 2013 and 2014, the country’s oil imports comprised over 70 percent of her annual consumption.
Along with high gold imports (Indians are among the largest buyers of the yellow metal), the yearly import bill rose dangerously. The trade balance, or the difference between imports and exports, doubled to around $200 billion in 2011-12 and 2012-13. The current account deficit (CAD), or the deficit between all forms of earnings and expenses in foreign exchange, went out of control. The combination had a multiplier impact on India’s external economy.
First, between June and December 2014, the rupee went into a tailspin. It steadily fell against the dollar, from 59 to over 63 to a dollar. Experts said that the rupee could breach the 70 or even 80 levels. The fall in the rupee made imports more expensive; India had to pay 63 million to buy $1 million worth of oil, instead of the earlier 59 million. Although a lower rupee helps exports too, or foreign earnings, this didn’t happen because of a weak global economy, thanks to the Financial Crisis of 2008. The trade balance and CAD worsened further
Second, high global crude prices implied that the domestic fuel subsidy shot up. The reason: Indian prices of petrol, diesel and kerosene are sold at lower-than-market rates to woo consumers (potential voters). The difference is partly subsidised by the government and local oil companies are saddled with the remaining losses. The increase in government’s unpaid bills to the latter affected their balance sheets. The energy sector was unable to play a role in energising growth.
The worst was yet to come. A combination of high fiscal deficit, CAD, inflation and trade deficit forced the international rating agencies to focus their economic telescopes on India. Standard & Poor and Moody’s threatened to downgrade India to ‘junk’ status. This would send signals to potential global investors that India was a risky nation to invest in; it could propel the country to the same economic state, as was the case in 1991. UPA-II couldn’t afford it.
Chidambaram, who was reappointed FM in July 2012, tried to bluster his way out. He imposed taxes on the import of gold and electronic items to lower the CAD. But this hiked the difference between the global and domestic prices of these products. Thus, it gave a fillip to smuggling. Investigating agencies like the Department of Revenue Intelligence and Enforcement Directorate said that gold smuggling jumped by 500 percent in 2013 and 2014. The World Gold Council estimated that India’s gold demand remained the same during the period; however, over half of the consumption was smuggled.
The finance minister’s second priority was to checkmate fiscal deficit. Since he couldn’t cut Non-Plan expenses, which normally comprise salaries to government employees and interest payments, he slashed Plan expenditure, which is public spending on manufacturing and infrastructure. It is the latter that enables growth. Chidambaram was willing to sacrifice growth in the short term in a bid to cut fiscal deficit and inculcate fiscal discipline. The strategy worked against UPA-II.
Thankfully Yours
The result: growth slowed down in 2011-12 and dipped the next year. For the first time in the country’s post-Independence history, growth in a year was lower than the previous one for three consecutive years — 8.9 percent in 2010-11, 6.7 in 2011-12, 4.9 in 2012-13 and 4.7 in 2013-14. This proved to be the last economic nail in the electoral coffin of UPA-II.
(Only a dramatic change in the calculation of the GDP by the Modi regime pushed the growth figure to 6.6 percent in 2013-14 and an estimated 7.5 percent in 2014-15. Most experts feel that if growth is calculated as per the earlier formula, it could be around the 5 percent mark in 2014-15.)
Both Mukherjee and Chidambaram were probably happy that Jaitley was left holding the economic baby after the May 2014 elections. The new FM had to take the harsh decisions to deal with the problems. But luck was on Modi and Jaitley’s side. Global crude prices crashed within months. Without taking any major steps, inflation withdrew its ugly head. Lower crude meant a lower import bill and lower CAD. Lower price rise implied higher demand, slightly higher growth and higher government revenues, or lower fiscal deficit. In a jiffy, the economy was back on track.
Although economists and industry have lauded Jaitley on his second Budget, Chidambaram felt that the finance minister’s numbers were highly suspect. A glance at the 2015 Budget figures indicated a slight sleight of the financial hand. Government revenues, including tax revenues, are expected to go up marginally. This hints that the FM is not expecting growth to take off. However, overall receipts are expected to go up by almost 6 percent. Most of the increase in the last figure would be due to borrowings. This is a dangerous sign, as it would lead to higher interest payments later.
On the expenditure side, Plan expenditure on ‘capital account’ is expected to jump by 34 percent. This is a good sign as it can spur public spending. Unfortunately, the total Plan expenses, including that on ‘revenue account’, would come down, and not go up. More importantly, grants for ‘creation of capital assets’, or productive assets, would reduce by over 16 percent. In such a scenario, how does Jaitley hope to spur growth, even as intentions of private investments are down?
Shockingly, Jaitley followed the same strategies as Chidambaram’s in a bid to control the fiscal deficit in 2014-15. He was unable to touch Non-Plan expenditure, which came down minimally; but he slashed the Plan budgets by an astounding 18.6 percent. Given these facts, how does the country hope to achieve a higher growth rate of 6.6 percent this year? May be, only because the formula to calculate growth was changed recently by the BJP regime!
Unfortunately Ours
Despite his clean image, the combination of good, but unsound, policies and the pressures of running a coalition government — UPA-II had 13 political allies — Manmohan Singh was caught red-handed in a series of scams. In a rare instance, the former prime minister was summoned by the Supreme Court to be questioned on his role in the irregular allocation of coal blocks, which were cancelled earlier by the apex court. A series of mammoth scandals — telecom (notional loss of 1,76,000 crore), coal (2,26,000 crore) and Commonwealth Games — rocked UPA-II.
UPA-II’s arrogant and egoistic Cabinet ministers bungled in their defences. They staggered, stumbled and lurched into a state of political drunkenness. The people laughed at their howlers and gaffes, got angry with them and ultimately resolved to throw them out of power. Telecom minister Kapil Sibal claimed that there was zero loss in the telecom spectrum issue, even as the CAG put the notional loss at a staggering figure. Chidambaram said that there was no loss in coal allocations because the mineral was still under the earth and was yet to be mined by private players.
However, as media pressure and criticism from other quarters gathered storm, UPA-II was always on the back foot. There was a sense of policy paralysis as the government was unable to take decisions. Reforms took a back seat; even when Singh tried to push through a few liberalisation moves, like FDI (Foreign Direct investment) in organised front-end retail, there was opposition from within the Congress and its allies. It seemed that there was maximum government, and no governance.
The country waited for a seemingly-strong leader. Modi arrived on the scene, and showcased his achievements during his several tenures as Gujarat chief minister. He convinced the masses that the state clocked high growth rates, which led to the overall development. He showed how his policies boosted manufacturing and agriculture. All this happened because he pursued a strategy of minimum government, maximum governance, complete transparency and lack of any corruption. ‘Na khaunga, na khane doonga’ (I won’t eat, nor will I allow others to do so), was the slogan that he repeated during his election campaign and after he became the prime minister.
In an era of low growth, high inflation and lack of adequate jobs, the corruption scars are the last thing that any government wants on its body-politic. During UPA-II’s rule, it angered all sections of the society, be it the lower, middle or rich classes. It cut across communities, castes and religions. This explains why most sections supported the BJP during the 2014 election.
Paradoxically Everyone’s
Ironically, if one compared the various Budget speeches of Mukherjee, Chidambaram and Jaitley, one can see a number of similarities among them. The crucial issues that they highlighted, the language they used and the emphasis they made seemed as if one had liberally borrowed from the other. This proves that most FMs are part of the same herd and flock. However, people tend to believe someone more than the others, based on the prevailing politico-social-economic atmosphere.
Let’s consider a few examples to establish this conclusion. In his second speech, Jaitley said that one of the three achievements of NDA-II was “the success of Jan-Dhan Yojana”. He added, “Who would have thought that in a short period of 100 days, over 12.5 crore families could have been brought into the financial mainstream?” His reference was to his government’s push to open bank accounts for the poor through this scheme. But was it a novel one?
Jaitley admitted that “financial inclusion” has been “talked about for decades now”. What he failed to mention was that in his speech in 2009, Mukherjee said that UPA-I had started the process to open “no frills (bank) accounts” with “nil or very low minimum balances”. He said that 3.3 crore accounts were opened and the figure would go up because the RBI had further relaxed the norms. In 2010, Mukherjee announced that “appropriate banking facilities” would be opened in all habitations (villages) “with population in excess of 2000 (people) by March 2012”.
In his next year’s speech, Mukherjee said that 73,000 habitations would be targeted for the new banking facilities and the public sector banks had agreed to cover 20,000 of them in 2011-12. He added that the government had initiated a new campaign, Swabhimaan, to use multimedia strategies to “inform, educate and motivate people to open bank accounts”. The difference between NDA-II, and UPA-I and UPA-II: the former arm-twisted the banks to do so.
When it comes to investments and manufacturing, Modi has repeatedly talked about his ‘Make in India’ campaign, which will create jobs, provide a single-window clearance to investors, encourage foreign investment and enhance the skills of the citizens to increase their incomes. In his 2004 speech, Chidambaram hiked FDI ceilings in insurance, telecom and civil aviation. He announced that he would set up an Investment Commission — later Cabinet Committee on Investments — to facilitate clearances to private investors.
Chidambaram said that he would upgrade all the ITIs (Industrial Training Institutes) within five years and create a PPP (Public-Private Partnership) model for the purpose. In 2009, Mukherjee claimed that he would opt for policies that would “create 12 million new work opportunities per year” and reduce the existing poverty level by half within the next five years.
In the past 10 months, Modi’s regime has announced grandiose plans — Digital India to unify the entire country, either through optic fibre network or wireless technologies; Bullet Trains and high-speed trains, and 100 smart cities. UPA-I and II did the same; they talked about a ‘Knowledge Centre’ in every village by 2007, or an attempt to convert Mumbai into a ‘regional financial centre’ to handle global finances between London, Singapore and Tokyo.
Modi has reiterated how he transformed the agriculture sector in Gujarat. He dramatically improved irrigation, recharged the hundreds of water bodies, and provided opportunities to farmers to grow value-added crops like BT cotton, vegetables, fruits and flowers. In 2004, Chidambaram said that India had a million water bodies, such as lakes, tanks and ponds, of which 5,00,000 were used for agricultural purposes. He added that he would initiate a “massive scheme to repair, renovate and restore all the water bodies that are directly linked to agriculture”. In the same speech, he said that his government would double horticulture production by 2011-12.
Ever since Modi came to power and Jaitley became the FM, expectations rose that NDA-II would be able to target subsidies for the poor and, therefore, reduce the leakages. This would improve the country’s finances, said experts. Both Chidambaram and Mukherjee have repeatedly said this. In fact, the UPA’s unique identification scheme, or Aadhaar, was the panacea to achieve this goal. In 2009, Mukherjee said that he wished to re-energise government and improve the delivery mechanisms to the poor. He maintained that Aadhaar would be rolled out in 12 to 18 months.
In the past decade, the faces of FMs changed, they brandished a new philosophy, but their lexicon remained the same. The septuagenarian Mukherjee, mercurial Chidambaram and savvy Jaitley poured the same old economic wine into newer and flashier bottles. However, the people liked some wines better than the others, not because they tasted well, but because the drinkers perceived them so. In the end, as Modi and Jaitley proved, it is the packaging that matters the most.
editor@tehelka.com
Mr Vinod and Dr Mehta
He was the best of editors. He was the worst of editors. He was a man who sometimes knew too much. He was one who mostly knew a little less. He was a reporter’s dream; he would push them to write critical articles on the ruling regimes. He was a journalist’s nightmare, who would nudge his colleagues to run with rumours and half-substantiated news. He was loved and revered by the liberal readers. Hard-core right-wingers hated him.
The late Vinod Mehta, who was one of the iconic editors in Indian journalism, took unusual risks. He loved to take on idols, be it in politics, business, culture or sports. He encouraged his colleagues to do so — and in an irreverent manner. When those who were criticised in his newspapers and magazines complained, he would adorn an impish and mischievous smile, walk up to the reporters and encourage them to do more articles on the same individuals.
Remember the first match-fixing story done by Outlook in June 1997? For the first time, it painted cricketing heroes, such as Indian skipper Mohammed Azharuddin and dashing batsman Ajay Jadeja as vicious villains, who were involved in betting and fixing. Azhar and Jadeja were indicted by the Board of Control for Cricket in India (BCCI) but let off by the courts. Later, in February 2009, when Lalit Modi, the now-discredited head of Indian Premier League (IPL), was at his popularity peak, Outlook exposed his past shenanigans.
There were several pieces in Outlook that rocked the nation during VM’s tenure as Editor-in-Chief. The land scandal that involved the Bollywood star, Amitabh Bachchan. The irregularities in the land bank created by Infosys, the globally-recognised software company managed by Narayana Murthy, who was known for his transparency and integrity. The Scorpene scandal, and revelations that put Madhu Koda, a former chief minister of Jharkhand, behind bars. The rice scam that pointed a finger at Kamal Nath, a former commerce minister.
Unfortunately, it was the same excitement and passion – and sometimes immaturity – that left several scars in VM’s otherwise illustrious career. He recounted one of those incidents in the first volume of his autobiography, Lucknow Boy: “And then I, and I alone, made a terrible, unforgivable error of judgment.” He ran with a malicious story, which had little proof, in The Independent, a jazzy newspaper that he edited.
In 1983, the legendary American journalist, Seymour Hersh revealed that the US had a mole in Indira Gandhi’s cabinet, and he passed on sensitive information related to the 1971 India-Bangladesh war. Hersh said the CIA agent was none other than Morarji Desai, who was the finance minister in 1971. Desai’s loyalists sued Hersh, but lost the libel suit in 1989. Later, the maverick politician, Subramaniam Swamy, alleged that the real mole was YB Chavan, who was the home minister in 1971. “And thereby hangs the tale which caused me much grief and my job,” said VM in his first autobiographical volume.
“I asked our Delhi bureau to check out the new (Swamy’s) revelations. They came back with a copy of the RAW [Research and Analysis Wing, India’s external intelligence agency] letter to Rajiv (Gandhi) and suggested the story had merit. I mistook the RAW letter as the gospel truth. On October 19, we published an eight-column banner headline, ‘Y.B. Chavan, Not Morarji, Spied for the US’.” That proved to be a grave and fatal journalistic blunder.
VM never learnt from that mistake. In Outlook, he continued to repeat them. What he called the pinnacle of his success — the Radia tapes story — was possibly the lowest he stumbled as an editor. The cd with transcripts of conversations that Niira Radia, chief lobbyist for the Tata Group and Reliance Industries (Mukesh Ambani), had with several politicians, bureaucrats and media persons was floating around for months before Outlook published them.
While the transcripts turned out to be authentic, VM ran with them only when he was told a rival weekly newsmagazine, Open, planned to carry them. But Outlook didn’t follow the standard journalistic practices. It didn’t authenticate the tapes; it didn’t speak to any individual whose conversations were recorded. It didn’t attempt to check with the finance ministry’s department that had recorded the conversations. What if the CD was doctored?
March 2001 was another dark month in VM’s editorial career. Outlook published a cover story, “Rigging The PMO: South Bloc”, which alleged that two individuals — Brajesh Mishra, the principal secretary to the PM and NK Singh, the officer on special duty — ran the Atal Bihari Vajpayee government along with a clutch of business houses. “Mishra and Singh constitute the powerful arms of the Prime Minister’s Office (PMO), which has now become the imperial power centre, rising roughshod over the bureaucracy and foisting controversial decisions on various ministries without so much as consulting them,” read its first paragraph.
VM said in Lucknow Boy that the article was based on a briefing given by EAS Sarma, who was secretary, finance ministry, in 1999-2000. But it didn’t have any other evidence. Based largely on unnamed sources and unsubstantiated charges, it quoted a single letter, written by Shyamal Ghosh, the then telecom secretary. Ghosh wrote that the government’s decision to hike FDI (foreign direct investment) limit in the telecom sector was put up before the cabinet without consulting the telecom ministry. “Frankly, this matter has come as a surprise to us,” he wrote to the industries secretary, Piyush Mankad.
The piece got VM, the two reporters and Outlook’s owner, Rajan Raheja, the Mumbai-based businessman with several interests, in trouble. Mishra flew into a rage; the Vajpayee regime conducted extensive income tax raids on Raheja’s corporate empire. Years later, the whispers in the magazine’s corridors was that VM had to personally apologise to Mishra and ask him to go easy on his owner.
In 2012, Ajaz Ashraf, a senior editor who worked with VM from July 2000 till February 2012, wrote a piece in The Hindu, which further maligned his former editor. “In 2005, a year after the ouster of Vajpayee’s National Democratic Alliance from power, journalist Rajesh Ramachandran worked over three months to establish a link between (Ranjan) Bhattacharya (Vajpayee’s foster son-in-law) and the companies to which two (state-owned) Centaur Hotels in Mumbai were sold. The story had been cleared as a cover, but a day before the magazine was to go to the press, it was summarily pulled out. The Editor-in-Chief displayed ample candour in disclosing to senior editors, of whom I was one, that the story had been withdrawn at the proprietor’s behest.” (Outlook’s Saba Naqvi clarified that the magazine did carry a cover on Bhattacharya, but in 2001.)
This contradictory, sometimes split personality, sides of Dr Vinod and Mr Mehta – aka Dr Jekyll and Mr Hyde – surfaced many times within the newsroom. But to be fair to VM, he was more of Dr Vinod, and less of Mr Mehta.
How they milked the system dry
The movie, Inception, confused most viewers. With its concepts of ‘shared dreams’ and ‘layered dreams’, it muddled the minds of those who watched it. However, the Indian businessmen loved it. The reason: it articulated what they had successfully honed and practised for decades in real life.
Big business doesn’t need shared dreams to infiltrate the conscious or subconscious of their targets to extract information and influence their decisions. They can do it openly, but secretively, while the individuals are awake. It doesn’t require layered dreams. What it needs are layered manipulations in real time.
The real world of corporate lobbyists, just like Inception, works at several levels, both vertically from the bottom to top or vice versa, and horizontally across institutions, government departments and ministries.
Everyone, who plays a role in the democratic decision-making process, is on the radar. No one can filter through the worldwide web of networks and favours that the lobbyists create and nurture. This is evident from the emails leaked by a whistle blower, who worked with the Essar Group, which has interests in energy, steel, mining, power and other sectors. The emails are part of a public interest litigation (PIL) petition filed in the Supreme Court.
Big business, through its myriad of operators, subverts the four pillars of democracy; it rots and rusts the system from within. Nothing is left to chance; every move is calculated, calibrated and coordinated to maximise the impact.
The Essar emails prove how the lobbyists’ objectives are achieved through manipulations within the legislature, executive and media. Every politician, bureaucrat and journalist is tracked and trapped, by honest or unfair means, to force him or her to deliver results for the conglomerate. Only a few can escape this octopus’ tentacles.
Dealing against Maoists
This story starts in the wild, untamed and violent Maoist belt in the eastern states such as Odisha and Chhattisgarh. The Essar Group owns iron ore mines there and supplies them from its beneficiation unit near Kirandul (Chhattisgarh) to its pellet unit in Visakhapatnam (Andhra Pradesh).
The slurry is pumped through a 267-kilometre-long pipeline, the second longest in the world, and passes through Odisha. The Maoists regularly target the pipeline; they damaged it in October 2011. In 2013, an Essar spokesperson told a journalist, “We are continuing our efforts to repair the pipeline and ensure its continued operations thereafter. This is our priority.”
It wasn’t surprising that in October 2013, Essar’s lobbyists met VC Sajjanar, Director General (Special Intelligence) of Chhattisgarh, at the latter’s office. The subject of the discussion was whether the government could deploy the CRPF (Central Reserve Police Force) to help the company to repair its slurry pipeline.
According to one of the emails, Sajjanar agreed to do so but wondered aloud if there was any “guarantee that the insiders (Maoists) would not damage the same again”. He maintained that he could not provide 24×7 security and that “there were no guidelines available to deploy CRPF on payment basis for a corporate entity. Only CISF (Central Industrial Security Force) could be made available on payment basis and that too on a stationary location”.
However, the DG came up with an alternative solution. He urged Essar to spend its CSR (Corporate Social Responsibility) funds to woo the local communities and help the government lay an alternative 16-20 km road as a part of it. As Essar lobbyists reported to their headquarters, “He (Sajjanar) would then deploy armed CRPF on those critical locations. We need not have to pay for the deployment then. It would be a one-time expenditure, which will be around Rs 12-15 crore. Moreover, he said we would make this as an initiative of the government without exposing our name.”
Given this security issue, Essar maintained proximity with the intelligence, the police forces and the local administration. In December 2012, one of its managers met DC Mishra, Commissioner, Bastar (Chhattisgarh), to ask him if the company could divide its CSR funds in two areas of the state — Sukma and Dantewada. Mishra asked Essar to send the formal letter and also requested for accommodation and transportation during his forthcoming visit to Delhi. Subsequently, Mishra sought a cab for a two-day visit to Gwalior. Essar was willing to please him.
In July 2013, an Essar manager met Girdhari Nayak, Director General of Police (Jail), Chhattisgarh, for a cup of tea. “During the meeting, he (Nayak) demanded some financial help (Rupees two lakh) from us for sponsoring six students of National Law University, Raipur,” wrote the manager. The email added, “It is possible that he may be posted as regular DGP after retirement of present DGP Mr Ramnivas after six months”. In less than half an hour, Essar’s Mumbai headquarters responded: “We should do this, as he (Nayak) is going to be the DGP, Chhattisgarh, from January 2014 and has more than seven years of service. Make it (loan) a CSR activity.”
Even low-level officials are kept in good humour because they can sit on files or delay matters. So, Essar’s lobbyists would visit the land branch collector’s office to follow up on the “recommendation of 151 hect govt land for Refinery expansion/certificate u/s (under section) 55 (sic.)” They would call the Mamlatdar’s office to arrange “reports on govt/gauchar land falling under refinery expansion (sic.)” They would talk to officials in Gujarat Water Infrastructure Limited on issues related to the supply of the Narmada water to Essar’s refinery and power plants in Gujarat. They would engage in discussions with secretaries in the chief minister’s office to discuss “the notice issued by the tehsildar to stop coal transportation”.
Dealing with Maoists
In September 2011, the Dantewada police arrested DVCS Varma, general manager, Essar Group, and charged him with paying ‘protection’ money to the Maoists. This was after the arrest of BK Lala, a contractor who worked for Essar and was carrying Rs 15 lakh to pay the Maoists. Others named in the racket were Jai Johar, a non-government organization (NGO) managed by the Dubey brothers and which was funded by Essar to do its CSR activities, and Lingaram Kodopi, an associate of the Maoists. Earlier, diplomatic cables leaked by WikiLeaks, hinted at a nexus between Indian businesses and the Maoists. A cable dated 11 January 2010 said that Essar “pays the Maoists ‘a significant amount’ not to harm or interfere with their operations” in Chhattisgarh and Odisha.
The case took a shocking twist when the police arrested Kodopi’s aunt, Soni Sori, in Delhi. It was alleged that Sori, an adivasi schoolteacher, who worked with some activists in Dantewada, used Kodopi for the illegal money exchanges. However, in February 2014, the Supreme Court granted bail to Sori and Kodopi after the Chhattisgarh High Court had denied it. In fact, the Sori case prompted several activists in the area to start free and cheap legal aid services to protect the rights of the local communities. As one of them said, “This was born out of a realisation that the justice system in Bastar is dominated by a ‘security-minded’ approach.”
(It must be mentioned that Tehelka magazine figured in the Essar emails. Nancy Jain, a former deputy general manager, Essar Group, wrote an email that the group’s corporate communications department coordinated with journalists from several newspapers and magazines, including Tehelka, to plant articles. There were three instances that hinted at possible links between Essar and the magazine. First, Tehelka published a pro-Sori cover story in 2012. The previous year, Essar sponsored the magazine’s annual event, ThinkFest, in Goa. Finally, the magazine questioned the ‘madness’ of the CBI in the manner in which it was investigating the 2G telecom scam. However, the bail granted to Sori and subsequent developments in the telecom scandal vindicated Tehelka.)
Climbing the executive ladder
The general perception is that big business interacts only with senior bureaucrats at the Centre. Since the corporate owners and senior managers personally know the officials, they can extract all information and influence government policies and decisions. However, this is not true. Through a fleet of lobbyists, big businesses try to network with officials along the executive hierarchical chain – from the head clerk, section officer, under secretary, secretary and even the personal secretary and personal assistant to the minister.
The relationships that are built at several vertical and horizontal levels help the companies to extricate varying favours, possibly in exchange of material reciprocation. Such a huge network enables the owners to track the progress of files and licences, influence future policies, gather corporate and bureaucratic intelligence and seek information on general operational matters. Some of the meetings and discussions are courtesy calls to build future relationships and also use the officials if the need arises later. Members, joint secretaries and assistant registrars in judicial bodies such as the Customs, Excise and Service Tax Appellate Tribunal (and the review tribunal) are also tracked.
For instance, an additional industrial adviser in the Union steel ministry was met to check the status of the Licence No. 5210037639. A head clerk in the mining ministry was pursued to check “mining lease matters”. An adviser in the environment ministry was spoken to about a notification related to the economic sensitive zone (ESZ). The Essar Group discussed ways to keep certain areas, including dry rivers and nullahs, out of the ESZ. A personal secretary to the joint secretary (thermal) in the Union power ministry revealed that no decision was taken in the gas-pooling meeting held a week ago but he gave an Essar manager a copy of a note that the ministry had prepared for the Prime Minister’s Office (PMO).
Market intelligence can come in different forms. It could be a proposed meeting between the coal secretary and the PMO to go through the files on coal block allocations. Or, it could be that the coal ministry was expected to issue show-cause notices to all those who had got the allocations but “where development work has not taken place”. An under secretary in the mining ministry told Essar that the Cabinet was to “examine changes” in the mining Act “vis-a-vis (mining) royalty”. A member of the now-disbanded Planning Commission (renamed as Niti Aayog) said that it had asked the industry ministry to explore “bottlenecks” in greenfield steel plants.
Bear-hugging Parliament
Parliamentarians, whether seasoned, first-timers, young and little-known help big business in several ways. Members of Parliament (MPs), who are close to or friends with corporate owners can ask sensitive and crucial questions in the two Houses, intervene in policy debates, write collective letters on issues and cajole and nudge ministers and senior party leaders to tweak government decisions. Therefore, each business house attempts to woo as many MPs as possible and from most of the national and regional political parties. Everyone is a friend, if he or she doesn’t choose to be an enemy.
An Essar’s inter-office memo (dated June 2009) is revealing. “With the new UPA (United Progressive Alliance) govt taking over at Centre and their fresh innings starting, this is an opportune moment for us to invest on right people at right places for reaping long term benefits. I have noticed that quite a lot of them, especially the young Parliamentarians, are techno-savvy and they prefer to communicate over emails, and ‘SMS’…. I propose to gift about 200 top-end cell phones to some of these esteemed leaders, and also some of the top bureaucrats. These phones will have SIM cards supported by us by about Rs 5,000 per month (sic.)”
First-timers and young MPs are easy targets. Here is a list of the under-40 Parliamentarians in the previous (15th) Lok Sabha, whose names figure in the various Essar emails:
♦ Bhavana Gawali, born 1973, Shiv Sena, elected from Yavatmal-Washim in Maharashtra
♦ Muhammed Hamdullah Sayeed, born 1982, Congress, Lakshadweep
♦ Pradeep Kumar Majhi, born 1976, Congress, elected from Nabrangpur in Odisha, asked 1150 questions in the 15th Lok Sabha
♦ Sameer Magan Bhujbal, born 1973, Nationalist Congress Party, elected from Nashik in Maharashtra, a nephew of Chhagan Bhujbal, a former Maharashtra minister
♦ Kamlesh Paswan, born 1976, BJP, elected from Bansgaon in Uttar Pradesh
♦ Sarika Devendra Singh, born 1980, Rashtriya Lok Dal, elected from Hathras in Uttar Pradesh
Senior MPs, past and present, are wooed through global holidays or jobs to their friends and relatives. In July 2013, Essar hosted nine guests, including BJP leader Nitin Gadkari and his family, on its luxury yacht, Sunrays, which was docked near Nice, France. As per the itinerary, Gadkari’s entourage would depart from Oslo (Norway) for Frankfurt (Germany) and subsequently to Nice. An Essar helicopter would transfer them to Sunrays by the afternoon. They stayed the night on the yacht, had a full cruise the next day and departed the same evening. One of the emails reiterated that all the guests were “vegetarian and prefer Asian vegetarian that is Indian veg, Chinese veg etc (sic.)”
Gadkari, who is now the Union transport minister, admitted that he took the favour but he maintained that he was not an MP, a cabinet minister or even the BJP president at the time. His tenure as BJP president ended in January 2013. Surprisingly, when the Essar scandal was exposed recently, the BJP didn’t come out in support of Gadkari. It didn’t give an explanation on the obvious nexus between big business and politics. Other prominent leaders such as a former Union coal minister Sriprakash Jaiswal, Congress leader Digvijay Singh and BJP MP Varun Gandhi referred candidates for jobs in the Essar Group.
An email said that “these requisitions (for jobs) are from VVIPs and cannot be ignored… none of them are high cost resources — in most cases fresher — and we should appoint them on probation for a period of six months, thereafter a call can be taken to retain/release them depending on their ability (sic.)” It was indeed taken seriously. Another email said that “as a first step we should immediately get the candidates interviewed and see how many of them can be accommodated in the system on merits…. This is required to be done on priority.”
Media circus
Journalists are important cogs in the lobbying wheel. They are the ones who grease the various wheels within wheels to initiate and force actions and decisions. Planted stories in newspapers and magazines provide credible tools to big business to lobby with the Legislature and the Executive and sometimes the Judiciary, too. Such pieces can be waved by MPs in Parliament, which can lead to debates and discussions. Therefore, wooing media persons is an integral part of the business.
This can happen in the form of providing taxis for the hacks or their family members or giving corporate guesthouses to them to host parties or in the form of Diwali, birthday, anniversary or New Year gifts. But some of them extract a larger pound of flesh. For example, one of them was peeved that his firm wasn’t getting too many contracts from the Essar Group. He tried to blackmail the group by pointing out several irregularities it had committed in east India. An email insisted that Black Label whisky should be provided at the journalist’s party.
Two examples are enough to prove how the combustible mix of planted stories in the media and Parliament questions can work beautifully in favour of the corporate owners. The first related to the comprehensive economic partnership agreements (CEPAs) that India signed with South Korea and Japan. Under the two CEPAs, India agreed to eliminate customs duties on 75 per cent of the products, including steel. Although the “cost of production (of steel) is around the same in both Korea & Japan vis-a-vis India, the Korean and Japanese steel producers have an upper hand… because of various fiscal incentives and soft interest rate regime extended by their respective governments (sic),” said a 2012 email.
Essar, which is one of the largest domestic steel producers, feared that cheap imports from the two nations would adversely impact its business. Therefore, it wanted the government to move steel into the ‘sensitive’ list for exclusion under the CEPAs. It roped in industry associations – CII, FICCI and Assocham – to write letters to the steel ministry, planned to plant Parliament questions and also planted media stories, which could then be sent to the ministry.
However, these attempts failed. In September 2012, the then steel minister, Beni Prasad Verma, rejected the demand. He said that under the WTO (World Trade Organisation), customs duties needed to be reduced to zero by 2025. “You (domestic steel sector) have to lower operation cost, raise competency level and deploy latest technology. Only then, your cost of production will come down,” Verma added.
The second issue related to the prices of iron ore (raw material) sold by the state-owned National Mineral Development Corporation (NMDC). In an August 2012 email, Essar said that it wanted to plant stories that revolved around questions like the number of times the nmdc hiked prices since 2010, the impact on the steel sector, and whether the hikes were in tandem with the global scenario. The email added: “[We] also need to highlight that whenever there is an increase in the steel price, the PMO, MoF(finance ministry) and MoS(steel ministry) get after the steel producers… whereas (they) keep their mouth shut whenever NMDC increased the price of iron ore (sic.)”
Essar met a journalist from The Indian Express, which “wanted a write-up… not exceeding 1,000 word and also quotes from Essar, JSW (Jindal Steel Works), RINL (Rashtriya Ispat) and Welspun…. I am managing quotes from respective companies. Request you to kindly send a write-up — hard hitting…. An early action will keep pressure on nmdc, as the questions planted in the Parliament will be heard on 27 August, 2012.” However, the newspaper has since said that it did not publish such an article. What were indeed published were pieces written by news agencies, which were carried by several newspapers, including The Indian Express, two days before the email.
Like other business groups, Essar tried to shake the foundations of three of the four pillars of a democracy — the Legislature, the Executive and the Press. Corporate lobbying, as the Essar leaks prove, has a seismic force that can destroy any democracy. But, apart from blaming big business, one has to simultaneously focus on the role of the politicians, bureaucrats, journalists and judges.
letters@tehelka.com
The king of bad times
On the wee hours of 29 January, Kattungal Chandrabose was fast asleep. Even in his worst nightmare, he wouldn’t have guessed what was going to happen next.
According to an eyewitness, this is what happened. Muhammad Nisham, a businessman and resident of a posh gated community in Sobha City, Thrissur, came home late. After reaching the gate, he honked incessantly. Failing to elicit any response, he slammed his Hummer into the wall in anger. Hearing the sound, Chandrabose, 47, and his fellow security guards came to open the gate. As it was quite late, Chandrabose took some time to verify the vehicle and identify the occupants. By this time, Nisham started to yell at him.
“Nisham, who looked drunk, came out and started abusing the guards for the delay,” recalls the witness. “He grabbed a baton from one of the guards and smashed the windowpanes of the security cabin. When Chandrabose pleaded with him to stop, Nisham turned his fury on him and started raining blows on the guard. Terrified, Chandrabose ran for cover, but Nisham chased him in his SUV and rammed into him.”
After that, Nisham allegedly shoved Chandrabose inside the SUV and drove him to the parking lot. He reportedly thrashed the security guard until he fell unconscious.
Meanwhile, the other guards alerted the Peramangalam Police Station. However, the police team allegedly took their own sweet time to arrive at the spot and failed to take any action against the “influential businessman”.
The bruised and battered Chandrabose was shifted to the Amala Medical College in Thrissur, where he succumbed to his injuries on 17 February.
“There was no one to help us,” says one of his fellow security guards. “The system is always behind the rich.”
Nisham, 38, is no stranger to such stunts. Two years ago, he became part of YouTube folklore when his video featuring his nine-year-son driving a Ferrari went viral.
According to Sudheesh T, a senior correspondent with Deccan Chronicle, Nisham had been infamous for his wild ways since his childhood days. He always had an obsession with imported cars and reportedly owns a fleet of 16 supercars, including a Lamborghini, Range Rover, Bentley, Ferrari, Rolls Royce Ghost and Aston Martin.
Importing such exotic cars had landed Nisham in trouble with the income tax sleuths, but he skillfully evaded any punishment by paying off the officials every time.
Nisham is one of the three sons of beedi tycoon, the late Adakkaparampil Abdul Khadar. After his father’s death in 1995, Nisham inherited a share of the Tirunelveli-based King Beedi Co. Later, he diversified into the business of jewellery, hotels and real estate. The latter has proved to be a veritable money-spinner for Nisham.
The local police who took Nisham to Karnataka and Tamil Nadu for gathering evidence found assets worth several crores in Bengaluru and Tirunelveli. Sources claim that he owns a 20,000 sq ft commercial complex in Bengaluru, which houses a beauty salon, gymnasium etc. The beedi production unit in Tirunelveli is spread across two acres and employs nearly 12,000 workers.
According to police sources, Nisham is a habitual offender and is listed as a ‘rowdy’ in the hall of shame of the Peramangalam police station. Every time he had a scrape with the law, he escaped without punishment thanks to his money power. Nisham has been registered as an accused in no less than 16 criminal cases. Nisham himself has admitted to the police that many of the cases were settled out of court. In one such case, the police helped Nisham settle a case after he got into a physical fight with his neighbour in Kochi. He received similar help after getting involved in an altercation at a gym. A cheque-bouncing case and drunken driving case were also dismissed with the help of the police and lawyers.
A case of molesting a Bengaluru-based model has reached a dead end one year after the incident. He was also accused of posting nude pictures of a woman on Facebook. Interestingly, Nisham’s brother Abdul Rasak filed a case against him under the IT Act, alleging that he had sent vulgar messages to his wife. Both the cases were settled out of court. During interrogation, Nisham admitted that he had spent lakhs to settle such cases.
On 14 June 2013, the police arrested Nisham and remanded him to custody on charges of obstructing Thrissur SI AP Devi from performing her duties.
“During a routine check one evening, I had stopped a Rolls Royce car coming from the direction of Kokkala junction,” she recalls. “I later realised that the occupants were Nisham and his family. As I suspected that he was driving in an intoxicated state, I asked him to step out. But he refused. Following this, my team was forced to drag him out. I warned him that since he was drunk, he would be fined, but he was unwilling to pay up. Even though we had an hour-long exchange of words, he did not show any signs of falling in line. Instead, he got into an ugly spat with us. So, we took him into custody.”
However, Nisham got out on bail the very next day and drove off in the Rolls Royce. The case is still pending.
Chandrabose’s impoverished family has lost its sole breadwinner and his life cannot be replaced by the compensation offered by the chief minister.
Jamanthi is adamant that the man responsible for her husband’s murder should be brought to justice and punished. The mother of two is not ready for any compromise and has come out into the open against the police officials who had failed to take the statement of Chandrabose.
In his defence, Thrissur Police Commissioner Nishanthini claimed that his team could not record Chandrabose’s statement because he was lying comatose.
However, Jamanthi has a different story to tell. She claims that Bosettan, as she called him, talked to her on the morning when he was admitted to the hospital.
“He asked me for water and enquired about the kids,” she says. “Bosettan also had a chat with Chief Minister Oommen Chandy when he visited the hospital.
“What the police are saying is far from the truth. Bosettan was able to speak. They are telling lies so as to help Nisham. I don’t have any trust in the investigation. I don’t think the probe will proceed in the right direction.”
Questions are being raised about the police’s inept handling of the case. Though the police have received ample evidence to substantiate Nisham’s role in the murder and his shady dealings during the time of the raid, they have neither included those in the chargesheet nor invoked any other sections of the IPC in connection with the evidence other than 302 (murder).
There are also allegations that the shoe Nisham had used to kick Chandrabose was made of python skin and costs around Rs 5 lakh. Though pythons are included in Schedule 1 of the Wildlife Protection Act, 1972, and the use of its products banned, the police have not filed a case under that clause. When asked about this, Nishanthini said that the police would investigate whether the shoe was indeed made of python skin.
The police have also made a glaring mistake in invoking a section under the Motor Vehicles Act because Nisham had indulged in violence under the influence of alcohol.
Even though the CPM, CPI and the BJP have raised suspicions about the source of Nisham’s wealth and demanded a probe, the police are yet to oblige.
However, DGP KS Balasubramanian has said that there is no obstacle in invoking the Kerala Anti-Social Activities Prevention Act (KAAPA) in Nisham’s case. “The businessman has indulged in such crimes that he can be booked under KAAPA,” the top cop said.
Meanwhile, based on an eyewitness account that Nisham’s wife Amal was present in the car during the time of the attack, Permangalam CI Bijukumar questioned her. However, she denied the charges and claimed that Nisham was alone at the time.
At a time when cops are under the scanner, North Zone ADGP Shanker Reddy has launched a probe against former Thrissur police commissioner Jacob Job for spending 90 minutes with Nisham while he was in police custody. Reddy has been instructed to find out whether Job was bribed by Nisham or his relatives. The probe was launched in the wake of allegations that some policemen are hand-in-glove with the businessman.
Even though local MLA PA Madhavan and District Congress Committee president Abdul Rahmankutty have denied allegations that they visited Nisham at Viyyur prison, there are suspicions that some politicians are involved in the case..
letters@tehelka.com
Tax terror vs tax errors
Finance Minister Arun Jaitley consistently referred to the “tax terrorism” regime pursued by UPA-2. Days after his first Budget in July 2014, he told Parliament that his government wished to “revive investor sentiment, which has been disturbed” to spur growth. He added that there was a need to end the previous regime’s environment of “what some call tax terrorism”.
To pursue these objectives and due to global pressures from countries such as the US, the government recently decided that it would not appeal against any cases in which foreign multinationals (MNCs) had got favourable orders from the lower courts in tax disputes. Thus, after this January decision, NDA-2 gave up its democratic and constitutional right to approach a higher court, including the Supreme Court, to pursue these cases to their logical ends.
The beneficiaries are, obviously, big business houses, both domestic and foreign. Among them is Shell, the Anglo-Dutch oil major, which won the Rs 18,000 crore case — slapped against it by the income tax department — in a high court. The Bombay High Court decided that the income tax authorities did not have any arguments against Vodafone, which was slapped with a Rs 3,200 crore claim. Other MNCs that may get a reprieve include Nokia, IBM and Cairn India.
~Also Read~
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The decision was taken weeks before the government claimed it would go after powerful corporate lobbyists and middlemen, who access secret and confidential documents from critical economic ministries (oil and gas, coal and power) to influence policies, manipulate stock markets and earn windfall profits. Not appealing against lower court orders seems a contradiction as it is akin to reverse lobbying, where the government publicly helps the big companies.
Clearly, the finance ministry, with its objective to woo private investments, is batting for the rich class, even as it contends that it has to reduce the subsidies (food, fuel and fertiliser) for the poor. How can any regime justify it? How can any government say it will let go of its right to contest a lower-court order in a higher one?
Four questions are involved here. First, doesn’t every individual and institution, including the government, have an inherent right in a democracy to approach the highest court, especially when the issue concerns public interest? Second, isn’t it the purpose of ‘a court of last resort’, or the apex court, to take a final call on the differing views given by the lower courts?
Third, can any outsider — except the courts and specifically the apex court — determine the legal position in case of any disagreement? Finally, aren’t there larger issues, which generally emerge from such cases, which can only be dealt with by the Supreme Court to set future precedents?
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Judicial review
The ideas behind the importance of judicial review — from the lowest court to the highest one — are integral to past legal debates. One, as a former US judge said: “The irreplaceable value of judicial review lies in the protection which it has accorded to constitutional rights that has maintained public esteem for the judiciary and has permitted peaceful existence of counter majoritarian implications of judicial review and the democratic principles on which our federal system rests.”
Two, as an American writer said that a court “has not been infallible. It has made mistakes. It has run counter to the deliberate and better judgment of the community.” In India, we have witnessed cases, where the lower courts were misguided, even manipulated, by witnesses and powerful people (money and politics). Who can possibly forget the initial grave injustices in the Jessica Lall or the BMW murder cases! In such a scenario, how can a government believe in the orders of the lower courts and give up its right to earn huge revenues that can be spent on public welfare?
A Day In The Life Of A Lobbyist
There is a world of difference between a lobbyist, government liaison person, public relations manager, information trader and those who engage in corporate espionage: a New Delhi-based lobbyist.
Whoever said this is living in the past. Today, I am the all-in-one lethal combo who does all of the above. But let me not digress. My day starts at 5 am. My boss can do with three hours of sleep. I realised it was his call as I groped for my three mobiles to figure out which one was ringing. He was livid.
“Why haven’t you got that Cabinet note on the forthcoming auction of oil and gas blocks? It was supposed to be on my table last evening.” Half asleep, I fumbled for the right answer. “Yesterday, the gang tried to steal it, but for some reason there was additional security. It will be done tonight.”
He got furious. “It is those two peons in the ministry, the two brothers, right. They can never do anything on time. It is time we found educated clerks to do the jobs. We can pay more than the Rs 20,000-30,000 we pay the peons.” I explained: “I manage several gangs, who operate in different wings of the ministry. My juniors have their own gangs, who separately report to them. We need this multi-gang hierarchy so that we don’t miss out on any paper. This acts as risk mitigation; if we don’t get the documents from the bureaucrats, the gangs help us send them a message that we have other sources.”
This was an art we learnt from the late Dhirubhai Ambani, the patriarch of the Reliance Group. He said it wasn’t enough to have an internal team to track the government. One required multiple sources, both internal and external, within and outside the government, in the various corporate camps, both friends and enemies, even in NGOs. At his peak, the revered Dhirubhai, our guru, could access documents directly from ministers and secretaries, even the Cabinet secretary. But he still maintained a wider network.
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Before him, things were corrupt, yet simple and straightforward. A lobbyist knew a few officials personally and dug out information. Cash payments were rare and minuscule. The peons, section officers and joint secretaries were paid in kind — send their family on a domestic holiday, provide a taxi to take someone’s mother’s ashes to Haridwar, part-finance a marriage in the family. Senior ones were paid accordingly — finance their children’s education abroad, arrange an international holiday and give them money for shopping.
Let me tell you this anecdote about another businessman, who procured draft policies from the Cabinet secretary. One day, he got a frantic call; the Cabinet secretary wanted him to go through a specific draft and suggest changes in it, as the Cabinet was about to meet in an hour to finalise it. In those days, documents were sent on faxes. Then they came as soft copies on email. However, things have changed now. Senior officials are cagey to dole out written information; faxes and emails have become dangerous. Now, we use minions like peons and clerks in the ministries. Some of them allow our gangs to break into their offices. Others steal the papers themselves, slip them into empty cigarette packets and leave them at the paanwallahs outside the ministries.
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By the time I was ready, it was 7.30. I rushed for a breakfast meet at India Habitat Centre’s library lounge. How times have changed. Two decades ago, I worked for the same boss, but my office was the lobby of Taj Mansingh Hotel. I would reach there at 8 and conduct all my meetings in the hotel’s café, restaurants and lounges. Then it got conspicuous; every Jill, Jane and Mary used the same place. I shifted to the members-only area at the Oberoi’s. It became crowded. I shifted to the more middle-class meeting points — Khan Market’s Café Turtle, Habitat’s lounge, iic’s annexe — and changed them regularly.
At breakfast, I met a relative of a chief minister, who ran the CM’s office. On the agenda was nothing serious, just to exchange political gossip, movements of key bureaucrats, who slept with whom and what was happening in the corridors of power. This was the liaison part of the job. The objective was to keep in touch with politicians, bureaucrats, journalists, lawyers, crooks and relatives of powerful individuals. It was painful but one had to do it. Half my day is wasted in this manner. But sometimes one hit the bull’s eye. A trickle of crucial and sensitive information is revealed. In addition, the gossip allows us to strike conversations with strangers at social dos.
At 9.30, I was at a seminar, which we secretly sponsored to change an existing law. One of our group’s businesses was to manufacture solar panels in a 40:60 joint venture (JV) with a PSU. The majority owner, a State-owned entity, was piqued about the surge of cheap solar panel imports from China. The JV wanted the government to impose an anti-dumping duty on them to safeguard the interests of local manufacturers. The seminar, whose participants included government officials, aimed to reinforce this idea. Before this event, we had distributed a ‘white paper’ and organised lectures on the issue.
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The ministry of new and renewable energy had told us that it had a win-win solution in mind. The government had allocated Rs 10,000 crore for renewable energy; the bulk of the contracts for the solar panels under this scheme would go to the PSUs and our JV. Meanwhile, the other users of the panels could continue to import from China. Hence, there was no need for an anti-dumping duty. We were urged to withdraw our plea. But we still wished to put more pressure, just in case the government changed its mind later.
In fact, this was a process that we followed whenever new policies were finalised. Before the final policy, we circulate white papers, manage a barrage of articles in newspapers and organise seminars, lectures and PowerPoint presentations to key officials and ministers. The boss meets crucial ministers, including the prime minister, to put across his viewpoint. The decision-making process is monitored to ensure that nothing is included that can adversely impact us.
I was back in the office for a bite. My hubby had packed sandwiches. It was time to energise the private detectives. The boss was in the midst of a family feud, a sibling rivalry with his younger brother, who demanded that he should get an equal share of the Rs 100,000 crore business empire. We didn’t want to give a huge slice to the playboy brother. I had hired detectives to dig up dirt on him. The sleuths roamed the cities, stayed in shady hotels and drank cheap booze as they tried to get documents that could muddy the image of our adversary.
Next was an important meeting. RS was a critical cog in our lobbying apparatus. He was close to people in the CBI, ED (Enforcement Directorate), DRI (Department of Revenue Intelligence), income tax and customs departments, RAW (Research and Analysis Wing) and IB (Intelligence Bureau). He was used for typical operations. We would write anonymous letters against our enemies, or those we wanted ‘fixed’, which detailed cooked-up or real charges related to national security, money laundering and tax evasion. RS would circulate them and force some of these agencies to initiate investigations. Files would open, news would be leaked to the media and that was it. Clean, simple and sure.
Remember that the phone-tapping incident in the infamous Niira Radia case was prompted by a complaint to the finance ministry that she had “within a span of nine years built up a business empire worth Rs 300 crore, that she was an agent of foreign intelligence agencies, and that she was indulging in anti-national activities”? It was on this basis that the ministry ordered phone taps as the issues concerned “national unity and integrity, state security, etc”. (Radia was the lobbyist for two of the most powerful business groups in the country — Mukesh Ambani’s Reliance Group and the Tata Group of Ratan Tata.)
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In 2004-05, when the two Ambani brothers, Mukesh and Anil, fought publicly, a similar complaint was leaked against the lobbyist for the younger brother. The anonymous letter alleged that he was a CIA agent, used the Ambani moneybags to seduce and honey-trap politicians and bureaucrats, and then get them to do whatever he wished to. He could walk into any government office without an appointment.
The late afternoon was the time for the dreary work — use MPs to achieve our ends. For years, we had three strategies to involve the elected MPs in our lobbying activities. For instance, some of us had access to the signed forms from MPs close to us that enabled us to ask questions in the Lok Sabha. We had to fill up the forms and submit them to the Lok Sabha secretariat. When the minister answered them, we would use the information to plan our business strategies and glean facts about our competitors and enemies. Sometimes, we used their signed letterheads to highlight our concerns and issues. Finally, MPs would place our versions in several Parliament debates.
Remember the 2005 cash-for-query sting, which claimed that parliamentarians received cash to ask questions? Eleven MPs were expelled from the two Houses. However, we didn’t operate on a question-by-question basis. We used their letters and forms when we required. It was a more efficient system. It was what we learnt in the 1970s and ’80s during the height of several corporate wars — Ambani vs Wadia, Chhabria vs Chhabria, Swraj Paul vs Nanda, etc.
By the evening, I turned my attention to the media. Most days, there were queries that had to be answered. The few select journalists who were on our payroll needed exclusives so that they could get their bylines in the next day’s newspapers. Television journos were a pain — they wanted a byte or two every minute in the race to air as many ‘breaking news’ as possible in 24 hours. All this required meticulous planning. Who should be given what leaks (documents) in what format? Rarely were the entire sets given; invariably, select pages that may embarrass our competitors and enemies were handed out. This was the cat-and-mouse of selective media leaks. I was a master of it.
Then there were the usual requests from friendly hacks. Someone wanted a car to go to Mussoorie. A second wanted to travel to Dubai; we had to pay the money for her trip and shopping. A third’s son was off to the US for higher studies; he needed an interest-free and non-refundable loan. We had an annual budget, and a substantial amount of petty cash, to deal with such demands. In rare cases, we would give the friendlies discounted shares in our group companies. The rise in valuation would help them earn windfall profits.
It is sundown — time for a few drinks after a hectic day. A politician had invited me to a party; I had to show my face. It was the ideal place to meet new faces; they may later become an integral part of our network, share titbits and relax. As I left the party at night, there was another urgent task. In some of the influential newspapers, we had people who sent the finalised front page of the next day’s edition, or a copy of any article that mentioned our group. Thus, we could preview them and ask for changes, if required. It also helped prove my worth to the boss.
As they say, we were lobbyists but we also dealt with tomorrow’s news today.
letters@tehelka.com
Reverse sweeping a carrom ball
BCCI president N Srinivasan, who is also the vice-chairman of India Cements, is a master of Indian laws. Over the past few decades, he has shown his legal prowess. In the 1980s, he successfully wrestled with State-owned IDBI to wrest back his control over India Cements. The next decade, he fought legal battles to finally take over Raasi Cements and Sri Vishnu Cements. In this century, his ongoing wars are related largely to the IPL franchisee, Chennai Super Kings (CSK).
In January, the Supreme Court bowled a carrom ball. As of 30 September 2014, Srinivasan and his family had a 28 percent stake in India Cements, which owned CSK (a division of the company). Therefore, there was an inherent “conflict of interest”. In its judgment, the apex court said that cricket administrators couldn’t own commercial interests in BCCI events, and India Cements had to sell CSK if the BCCI chief wished to be re-elected as the president in the forthcoming board election.
But Srinivasan’s loyalists knew that the legal master and cricket maestro would not remain on the back foot. They were sure that he would reverse sweep the carrom ball over the short third man. The hints that he sought to do this came when India Cements announced that CSK would be spun off into a fully owned subsidiary. The new subsidiary, Chennai Super Kings Cricket Ltd (CSKCL), would then be demerged from India Cements, and the nearly 100,000 shareholders of India Cements would get proportionate shares in the cricket company. Thus, if an investor owned 1 percent of India Cements, he or she would get a similar stake in CSKCL.
Will this two-step strategy be enough to convince the Supreme Court and its three-member committee that was formed to look into issues related to CSK, illegal betting and match-fixing? A mere demerger and proportionate share allotment will be against both the letter and spirit of the January order. A demerger implies that Srinivasan and his family too get more than 28 percent holding in CSKCL. This may not be acceptable to the apex court or its committee.
In the past, the court rejected the argument that CSK was not owned by Srinivasan and his family, but by a listed company that had tens of thousands of shareholders. In its January order, the court added that “the argument that Mr Srinivasan owns only 0.14 percent equity in India Cements is of no avail if not totally misleading when we find from the record that his family directly/indirectly holds… equity in India Cements with Mr Srinivasan, his wife and daughter as directors on the board of that company”.
An option for Srinivasan is to sell his equity in CSKCL to AVM Productions, a Chennai-based movie production firm owned by the Meiyappan family, which is related to him. Although the BCCI chief has no commercial interests in AVM, this may muddy the legal issues. Srinivasan’s son-in-law Gurunath Meiyappan belongs to the AVM family and is both a shareholder and director in AVM Productions. Since his name is involved in IPL illegal betting cases, the apex court may reject this deal.
Insiders contend that there is another reason why this option is a non-starter. Srinivasan has fallen out with the Meiyappans. He blames Gurunath for his problems; if the son-in-law had not involved himself with the bookies, the court wouldn’t have intervened in India Cements’ ownership of CSK. For, before the match-fixing cases became prominent, Srinivasan struck a deal with AC Muthiah, who initially dragged the “conflict of interest” case to the apex court. Muthiah withdrew the civil suit against Srinivasan.
The BCCI chief can explore the possibility of creating layers of ownership, which will hide the identity of the true owner.
In the past, several Indian and global promoters have achieved this objective through legal and illegal means. They have either routed their monies through Indian benami and shell firms or through global tax havens such as Mauritius and Isle of Man. The real owners can be traced only through a rigorous investigation aimed solely to lift the corporate veil.
For example, Indian investigators have alleged for a decade that a substantial portion of foreign direct investment and foreign institutional investment — invested in the country’s stock markets — has come through the Mauritius route, and is essentially “round tripping”. The term applies to black money generated in India and stashed abroad, but which legally finds its way back into the country. In the process of this kind of laundering, it also becomes white money.
However, the problem with this choice is that the apex court or its three-member committee may insist on full disclosures. If Srinivasan is caught in this part legal-part illegal ownership construct, he may lose more than the control over CSK. In such a scenario, the income tax department and Enforcement Directorate may direct their investigations against him, CSK and India Cements.
Vinod Mehta: End of an era
Photo: Shailendra Pandey
While I worked for the weekly Outlook magazine for five years, when Vinod Mehta was its editor, I took copious notes of the daily edit meetings. As I went through them today, I was surprised that most of the anecdotes and incidents were about his sometimes sarcastic, sometimes black, and sometimes sniping sense of humour. He was the funniest journalist I have worked with and, more important, he was a reporter’s editor, who felt happy when a politician or a businessperson would call him to complain about a negative piece written by his colleagues.
At one of the meetings, the books editor argued for extra pages for an interview with an Indian author, who had declared that he was gay. She got her way, and then another editor asked for an extra page for an interview with a diplomat. “What? Has he also come out of the closet,” asked VM, and everyone laughed. Once, when I had written against the then finance minister, P Chidambaram, the latter met VM at a party and complained about the article. The next day, VM narrated the incident to me, and asked me not to worry about it.
He was surely eccentric and maverick, but also brilliant in his sense of what would click with the readers. He pretended as if he didn’t hear everything that was said – he wore a hearing aid – when it suited him. But say something important, and he would respond in a manner that conveyed that he had heard every word, including the long sighs at the edit meetings. I didn’t agree with everything that he did or said, but then when I vehemently presented my case on an issue, he listened and even gave in if my points were solid, factual and logical.
A voracious reader of newspapers and magazines, both Indian and foreign, he would spend hours every day doing it. This meant that we too had to be prepared at the edit meetings. He met few people, including sources, but the daily readings gave him enough insights and sense of the political, economic and social events and happenings across the globe. So, some of the seniors made it a habit to borrow the newspapers and magazines after he was done with them. One of them would read all the newspapers once a week, before the weekly Friday meetings to discuss the next issue.
All of us had a few trying times with him. He would ask me to keep the phone down in mid-conversation because had something to say. He would peer over the reporters’ shoulders to ensure that they were working on the pieces that had to be filed in the next few hours. He would stop the desk people from going to the loo or eating their dinner because the issue had to go to the press. But we loved him for his passion and connect with Outlook. Single-handedly, he gave the magazine the seriousness, intellect and liberal bias that it had.
The Editor is dead. But he will always live in our hearts and minds.