India can be called a land of scams.
In a country, where more
than half the people live on less than Rs 100 a day, we have ministers and
government officials siphoning off funds to the tune of thousands of crores! In
a country which proudly calls itself the world's largest democracy, a
government was clinging to power by paying legislator's to vote in its favour.
In a country where fiscal deficit is causing growing worry among economists and
policy makers, states lose Rs 32,000 Crores, at a conservative estimate, to a
common counterfeiter with connections. In a country where more than 50 percent
of the 120 crore population owns and uses a mobile phone, a loss of Rs 1,76,000
crores is caused by a few telecom companies in cahoots with an obliging telecom
minister...
Corruption
is not an aberration in India, but a way of life. You pay the municipal
authorities when a child is born, to get a birth certificate. You pay the
school for a pass certificate. You pay the college for a degree. You have to
'know' somebody to get a job. And even when you die, your dead body can be
disposed off only after money changes hands. Between birth and death, you have
to make illegal payments to get a driving licence. You have to pay to get a
ration card... Why, after retirement, you have to pay to get a certificate
every month stating you are alive in order to get your monthly pension...
Corruption
has achieved the status of a true national institution in India. But then, this
blog is not about corruption. It’s about scams.
Corruption on an organised scale, with
the loot running to multiple crores, is a scam. A scam is defined as “a fraudulent or deceptive act or operation”. Indians, particularly the business class, have
perfected the fine art of scamming by putting their contacts in politics and the
in the bureaucracy to good use right from the time India became a free nation.
Scams are so numerous and come in such
a wide variety of sizes and shapes that the average Indian has become
impervious to them. Occasionally some shake us. As the 2G Scam did a few years
ago. At that time, what really hit us was the sheer magnitude of the money
involved. A stupendous One Lakh Seventy Six Thousand Crore rupees, according to
the estimate made by the Comptroller and Auditor General of India, who brought
the scam into the public domain.
Just as an American greets a perfect stranger
with a “Howdy”, or an Englishman opens a conversation with ‘Nice weather
today”, “How many zeroes are there in 1,76,000 Crores”, became a familiar conversation
opener in India. The figure was a statistical delight for the media as well.
One TV channel estimated that if the money was drawn as 1000 rupee notes and
packed into shipment containers, it would require 12 large containers to carry
the booty. Another speculated if all the money was dumped inside a cricket
stadium and set afire, the fire would burn for three months! But that was
before Cricket’s very own betting and match-fixing scam erupted.
As we step into the New Year, this blog attempts
to identify and record for posterity some of the major scams that shook India
over the last 6 decades. Lest we forget. And to be more vigilant in the future.
For it is our money that is at stake.
Jeep Purchase (1948)
Free
India's corruption graph begins. V K Krishna Menon, then the Indian high
commissioner to Britain, bypassed protocol to sign a deal worth Rs 80 lakh with
a foreign firm for the purchase of army jeeps. The case was closed in 1955 and
soon after, Menon joined the Nehru cabinet.
BHU Funds (1956)
In
one of the first instances of corruption in educational institutions, Benaras
Hindu University officials were accused of misappropriation of funds worth Rs
50 lakh.
Mundhra Mess (1958)
The
Life Insurance Corporation of India, under the Centre's pressure, bought shares
worth Rs 1.2 crore in firms owned by Haridas Mundhra to bale him out of a
crunch. The case compelled T T Krishnamachari to resign as finance minister.
Teja’s Ships (1960)
Shipping
magnate Jayanti Dharma Teja took loans worth Rs 22 crore, taking advantage of
his closeness to Jawaharlal Nehru, to establish the Jayanti Shipping Company.
In 1960, the authorities discovered that he was actually siphoning off money to
his own account, after which Teja fled the country.
In-laws and Out-laws (1963)
Pratap
Singh Kairon became the first Indian chief minister to be accused of abusing
his power for his own benefit and that of his sons and relatives. He quit a
year later.
Patnaik's Tube Racket (1965)
Orissa
Chief Minister Biju Patnaik was forced to resign after it was discovered that
he had favoured his privately-held company Kalinga Tubes in awarding a
government contract.
Maruti Scandal (1974)
Well
before the company was set up, the then prime minister Indira Gandhi's name
came up in the first Maruti scandal, where her son Sanjay Gandhi was favoured
with a licence to make passenger cars in India.
Quid Pro Kuo (1976)
Indian
Oil Corporation signed a Rs 2.2-crore oil contract with a non-existent firm in
Hong Kong and a kickback was given. The petroleum and chemicals minister was
directed to make the purchase.
Antulay’s Trust (1981)
A
R Antulay, then Chief Minister of Maharashtra, had garnered Rs 30 crore as
bribe from businesses dependent on state resources like cement and kept the
money in a private trust of which he and family members were trustees.
Bofors Pay-Off (1987)
The Bofors scam that took place between 1980s and 1990s had
stirred a big controversy in the country as then Prime Minister Rajiv Gandhi
and several others were accused of receiving kickbacks from the now defunct
Swedish arms company Bofors AB for clearing a contract to supply India's
155 mm field howitzer.
In March 1986, a $285 million contract between the Govt of India
and Bofors was signed for supply of 410 155mm Howitzer field guns. About a year
later, in April 1987, Swedish Radio alleged that Bofors paid kickbacks to top
Indian politicians and key defence officials to seal the deal. It led to Rajiv losing power when
the people overwhelmingly voted against him in the elections that followed.
The middleman associated with the scandal was Ottavio Quattrocchi,
was believed to be a major player in the scam. However, after years of legal
battle, the Bofors saga came to an end on July 13, 2013 with Quattrocchi's
death.
Securities Scam (1992)
Popularly known as the Big Bull, stock broker Harshad Mehta
engaged in a massive stock manipulation scheme financed by worthless bank
receipts, which his firm brokered in "ready forward" transactions
between banks. Mehta was convicted by the Bombay High Court and Supreme Court
of India for his part in a financial scandal valued at Rs 5000 Crores, which
took place on the Bombay Stock Exchange (BSE). He was tried for 9 years, until
he died in the late 2001.
Sugar Import (1994)
As
food minister, Kalpnath Rai presided over the import of sugar at a price higher
than that of the market, causing a loss of Rs 650 crore to the exchequer. He
resigned following the allegations.
Indian Bank Rip-off (1992)
Aided
by M Gopalakrishnan, then the chairman of the Indian Bank, borrowers -- mostly
small corporates, film producers and exporters from Tamilnadu -- were lent a
total of over Rs 1,300 crore, which they never paid back.
JMM Bribes (1995)
Jharkhand
Mukti Morcha leader Shailendra Mahato testified that he and three party members
received bribes of Rs 30 lakh to bail out the PV Narasimha Rao government in
the 1993 no-confidence motion.
Telecom Scam (1996)
Former
minister of state for communication, Sukh Ram, was accused of causing a loss of
Rs 1.6 crore to the exchequer by favouring a Hyderabad- based private firm in
the purchase of telecom equipment. During a raid, several crores in cash was
recovered from Sukh Ram’s puja room at home. He, along with two others, was
convicted in 2002.
Fodder Scam (1996)
The
accountant general's concerns about the withdrawal of excess funds by Bihar's
animal husbandry department unveiled a Rs 950-crore scam involving Lalu Prasad
Yadav, then the state chief minister. The scam
involved fabrication of fictitious livestock for which fodder, medicines and
animal husbandry equipment was supposedly procured. The animal husbandry
department is said to have embezzled Rs950 crore through the scheme.
Urea Deal (1996)
CS
Ramakrishnan, Managing Director, National Fertiliser Corporation, and a group
of businessmen close to the PV Narasimha Rao regime fleeced the government and
took Rs 133 crore from the import of two lakh tonnes of urea, which was never
delivered.
Jain’s Hawala Diaries (1996)
The
scandal surfaced following CBI raids on hawala operators in Delhi in 1991. But
it was SK Jain's diaries that had heads rolling.
Match Fixing (2000)
Mohammed
Azharuddin, till then India's cricket captain, was accused of match-fixing. He
and Ajay Sharma were banned from playing, while Ajay Jadeja and Manoj Prabhakar
were suspended for five years. Years later, with the introduction of IPL, match-fixing,betting and insider trading have become the heart and soul of cricket.
Stockmarket Scam (2001)
The
mayhem that wiped off over Rs 1,15,000 crore in the markets in March 2001 was
masterminded by the Pentafour bull Ketan Parekh. He was arrested in December
2002 and banned from accessing the capital market for 14 years.
Home Trade Scam (2002)
Under
the pretext of gilt trading, Rs 600 crore was swindled from over 25 cooperative
banks in Maharashtra and Gujarat by a Navi Mumbai-based brokerage firm Home
Trade. Sanjay Agarwal, CEO of the firm, was arrested in May 2002.
Stamp Paper Scam (2003)
The
sheer magnitude of the racket was shocking -- it caused a loss of Rs 30,000
crore to the exchequer. Disclosures of the mastermind behind it, Abdul Karim
Telgi, implicated top police officers and bureaucrats.
Scorpene Deal Scam(2005)
One of India's largest bribery scandals, in which Rs 500 crore is
alleged to have been paid to government decision makers by Thales, the makers
of the Scorpene submarine. The amount was channeled through middlemen such as
Abhishek Verma. The sacm also involved Ravi Shankaran, a relative of the then
chief of navy staff Arun Prakash. He is also the prime accused in the Navy War
Room spy scandal.
Cash-for-votes scandal (2008)
The scandal exposed the rampant corruption that prevails at all
levels in the country. It involved the Sonia Gandhi-led UPA, which bribed MPs
in order to survive a confidence vote on July 22, 2008. The confidence vote was
triggered in the Lok Sabha after the Communist Party of India (Marxist)-led
Left Front withdrew support from the government, which wanted to pursue the
Indo-US nuclear deal.
Bellary mining scam (2008)
The scandal in Karnataka, which led to the resignation of former
chief minister BS Yeddyurappa, involved mining barons, the Reddy
brothers. It was alleged that G Karunakara Reddy and G Janardhana Reddy had
paid money to bag contracts for their Obulapuram Mining Company, in Bellary.
The then Lokayukta of Karnataka, Justice Santosh Hegde said that Yeddyurappa
and his family members had accepted bribes in the form of donations to
trusts from mining companies in exchange for issuing mining leases. The
Karnataka government suffered a loss of Rs16,085 crore.
Lies and Deception at Satyam (2009)
In the biggest scam ever to hit India’s IT sector, Chairman of
Satyam Computers, B Ramalinga Raju, admitted to doctoring the company’s balance
sheets. In a letter written to the board, Raju admitted that he inflated the
balance sheets to show Rs 5,361 crore at the end of September 2008, which was 300 crore more than the actual amount.
Raja’s Spectrum
(2010)
Telecom bandwidth tender was undervalued and offered to a
preferred few on a 'First-Come-First-Served' basis at the behest of the then
Union Telecom Minister, Andimuthu Raja, instead of a transparent auction
system, as advised by the PMO. While the CAG pegs the scam amount at Rs176,000
crore, the CBI estimates it at Rs30,984 crore.
Raja was forced to resign
and booked under the Prevention
of Corruption Act for accepting illegal
gratification. Apart from Raja, Kanimozhi, the daughter of the then Tamil Nadu
Chief Minister, M Karunanidhi has also been named in the case.
Bureaucrats whose names surfaced in the case were former telecom
secretary Siddhartha Behura, Secretary of the Department of Telecommunications
PJ Thomas, bureaucrat Pradip Baijal and Raja's private secretary RK
Chandolia.
Making Common Wealth of the Games (2010)
Among all the scams in India, the CWG scam is perhaps the only one
that drew the attention of media worldwide. A day after the conclusion of the Delhi
Commonwealth Games, the Union Government announced formation of a special
committee to probe allegations of corruption and mismanagement against the
Organising Committee.
Organising Committee chairman and Union Minister Suresh Kalmadi's
name surfaced as the main accused for awarding a contract to install Timing,
Scoring and Results (TSR) system to Swiss Timing at inflated rates causing a
loss of over Rs 90 crore to the exchequer, despite having a cheaper option.
Antrix Devas Deal (2011)
ISRO chairman G Madhavan Nair and three other scientists were
accused of entering into a controversial contract between Antrix Corporation
and Devas Multimedia Private Limited on January 28, 2005. Under the deal,
Antrix was to provide 70 MHz of S-Band wavelength to Devas for broadcasting
purposes. This was to be done by ISRO leasing out S-band transponders in
two satellites (GSAT6 and GSAT6A) to Devas. A CAG report revealed that the
department of space (DoS) had violated rules and policies for approving the
agreement. The audit report pegged the loss at Rs 2,00,000 crore.
Tatra Truck Scam (2011)
Top officials of Bharat Earth Movers Ltd (BEML), a defence
public sector undertaking, and the defence ministry siphoned off Rs 750
crore in bribes and commissions over 14 years in the purchase of components for
Tatra trucks. BEML flouted defence procurement guidelines and sold Tatra trucks
to the army at an inflated price.
No action was taken by the government until former Army Chief
General VK Singh, in an interview, admitted that he was offered bribe of
Rs14 crore for clearing the purchase of 600 substandard Tatra-all-terrain
vehicles. Following this revelation, the then Defence Minister AK Antony was
forced to order a CBI probe into the scam.
Adarsh Housing society scam (2011)
The scam involves the Adarsh Cooperative Housing Society. The
building, which was originally meant to be a six-storey structure for Kargil
war heroes and war widows, was converted into a 31-storey highrise. The complex
now houses members including relatives of former Maharashtra chief minister
Ashok Chavan and other politicians, military officials and bureaucrats, who got
the flats at a lower price. Former Army chiefs Generals Deepak Kapoor and NC
Vij and former Navy chief Admiral Madhavendra Singh and Vice-Chief Gen Shantanu
Choudhary also got flats in the society.
An inquiry by the CBI, IT department and the Enforcement
Directorate unearthed Sushilkumar Shinde, Late Vilasrao Deshmukh and Ashok
Chavan's involvement in the scam, leading to Chavan’s resignation.
Coal Block Allocation Scam (2012)
Dubbed
as Coalgate by the media, the scam once again exposed corruption in the highest
echelons of power in the country. The scandal involves allocation of the
country's coal deposits to public and private sector companies by India’s Mr
Clean Prime Minister, Manmohan Singh. The office of Comptroller and Auditor
General of India (CAG), in a draft report in March 2012, accused the government
of allocating coal blocks in an arbitrary manner during the period 2004–2009,
causing a loss of Rs1,86,000 crore.
The scandal caused a furore both inside and outside Parliament due
to its sheer magnitude. The scandal got murkier when 43 files containing
crucial information on how the coal fields were allocated to private firms went
missing.
Chopper scam (2013)
Better known as Choppergate, the scam involves several politicians
and defence officers, who have been accused of having accepted bribes from AugustaWestland to clear a contract to supply 12 AW101 helicopters to India
in February 2010. The Rs 3600 crore scam came to light on February 12, 2013,
when Giuseppe Orsi, the CEO of Finmeccanica, was arrested by Italian
authorities for bribes allegedly paid to secure the sale of helicopters to
India. Finmeccanica is the parent company of AgustaWestland.
Investigations revealed that three persons related to the then Air
Force chief Shashi Tyagi had bent the rules in the tender to help
AgustaWestland secure the contract. Tyagi is the first chief of the Indian Air
Force to be named in a corruption or criminal case by the CBI.
Saradha Group Chit Fund Scam (2013)
This financial scam was caused by the collapse of a Ponzi scheme
run by Saradha Group, a consortium of companies which was believed to be
running a wide variety of collective investment schemes (popularly referred to
as chit fund) West Bengal. The group collapsed in April 2013, causing an
estimated loss of Rs 200–300 billion to over 1.7 million depositors.
Group chairman Sudipto Sen, in a letter to the CBI, admitted that he had
paid large sums of money to several politicians. He also stated that Trinamool
Congress leader Kunal Ghosh had forced him to enter into money-losing media
ventures and blackmailed him into selling one of his channels at below market
price. Sen fled after posting this letter on April 10. He was arrested in
Kashmir on April 23, 2013. His close aide Debjani Mukhopadhdhay was also
arrested for her involvement in the scam.
Uttar Pradesh NRHM Scam (2013)
Top politicians and bureaucrats are alleged to have siphoned off
Rs10,000 crore from the National Rural Health Mission, a central government
scheme, meant to improve health care delivery in rural areas. The CBI is
investigating several former ministers of the Bahujan Samaj Party, the then
ruling party, in the case. The scam came to the limelight after two Chief
Medical Officers (CMO) were shot dead outside their houses. Deputy-CMO, YS
Sachan, who was suspected to have had a role in the murders, was arrested, but
died mysteriously in prison.
This is by no
means an exhaustive compilation. Yet they throw up several interesting issues. The
scamsters have not spared any part of India – from North to South, East to
West. No department has been immune – be it defence, health, agriculture, education,
communications or sports. Both the Central
and State Governments have been equally guilty. Similarly, both national
parties and regional satraps have fallen with the trend. The money looted, if
totalled, runs to Trillions – enough to position India as one of the richest
nations in the world.
Three
institutions deserve to be complimented for their vigilantism that has brought
these scams to light and for ensuring, in the end, that justice was meted out –
the Media, the Comptroller & Auditor General of India and the Courts of
Law. Efforts have taken place to subvert these institutions as well. Some
individuals have fallen on the wayside to the lure of lucre.
Yet the majority
has stood upright. Signalling hope for the future.