Chasing the middleman

Print edition : November 25, 2016

Gautam Adani, chairman, Adani group. The biggest black money case to come up before the SIT set up to look into the problem involves the Adani group. Photo: Rajeev Bhatt

Ravi Shankar Prasad, Minister for Law and Telecommunications, was reportedly on the payroll of Mukesh Ambani’s Reliance group as a lawyer for several years. Photo: Kamal Narang

A searing look at the pervasive role of middlemen in the financial dealings of the country and the nexus between industrialists and politicians.

JOSY JOSEPH, a scholar who walked into journalism, brings to his writings clarity and rigorous analysis. The National Security Editor of The Hindu, he has bagged awards for his investigative reporting. The Prem Bhatia Trust elected him India’s best political reporter of 2010 “for his scoops and revelations”. In 2013, the Ramnath Goenka Foundation awarded him the Journalist of the Year Award in the print media. His is a formidable record of exposes—the Adarsh Apartments scam; the Naval War Room Leak case; some scandals of the Commonwealth Games; the 2G Spectrum Allocation scam; and very many corrupt practices in government decisions. His range of interests is wide. It covers foreign as well as domestic matters. One hopes he will write before long on the Ministry of External Affairs and the country’s diplomatic service, the Indian Foreign Service.

The book reflects the anguish of a concerned citizen. He writes: “Over the years, almost every major financial transaction in India has been made by fictitious shareholders and proxy directors through shady deals, cash movements to tax havens and, often enough, outright criminal conspiracy.

“If you are able to summon the forensic skills necessary to detect the real powers behind fictitious shareholders and proxy voters, it will get you an intimate, revolting view of India’s underbelly, one that will swallow the sanitised, democratic India of impressive achievements and global ambitions. This book grew out of my anguish at the staggering size and scale of that underbelly, the dilapidated state of Indian institutions and the deep immorality at the heart of our democracy.”

Scathing censure

The censure is scathing. “In this country, it is okay to do practically anything: use fake promoters, accept bribes, commission murders, intimidate media, manipulate courts and grab power. The one big rule: don’t get caught. This book is about the reality every citizen, and all visitors, experience in myriad ways. For years, I struggled to find a structure to write about that India, and even this narrative remains an incomplete rendition of a complex web.

“Every individual in that web has a stake in the perpetuation of the system, and each one of them contributes to denying the poor access to instruments of democracy.” Out of this despair were born movements led by Anna Hazare and Arvind Kejriwal, who also soon turned a politician adept at the game.

The essays in this volume are a reporter’s inquiry into the state of the nation, both in rural and urban areas, into the politician as well as the middleman.

The chapter “The Mighty Typist” records the rise of men like R.K. Dhawan, Vincent George, O.P. Sharma and, of course, M.O. Mathai. But the “honours” must go to the middleman. “In the Indian economy, middlemen play out their roles in the dingy back rooms of decision-making. They carry bribes, pay whoever needs to be paid, intimidate someone if required, and ensure that their clients have insider information on a contract from the very beginning of the process. Influential middlemen are an essential ingredient in any major government contract.”

Businessmen and industrialists also act as middlemen, at times between foreign diplomats and Ministers. At the highest echelons of Indian decision-making, it is hard to figure out who is a mere middleman and who is a mere industrialist. In India’s frenetic arms build-up, this parasite has played a vital role which the author exposes.

“The Choudhrie brothers—Sudhir, Amrit and Rajiv—grew up in socialist India, with its slow growth rates and tight government controls. They realised that there was money to be made by helping companies deal with India’s infamous red tape. Their first deal as middlemen is believed to have been a major fighter aircraft contract that the Indian Air Force signed with a European firm in the late 1970s. There are, of course, no documents tracing their involvement—only hearsay and claims by some of those involved in the deal. Once they entered the big league, the Choudhrie brothers were quick to create a web of contacts across the political, bureaucratic and military hierarchies. Their close friendship with a senior Congress leader, who was a trusted associate of Indira Gandhi, is well known.”

Is the BJP regime any better? “On 28 May 2014, on its first day in office, Prime Minister Narendra Modi’s BJP government announced its first significant decision: the constitution of a Special Investigation Team (SIT) led by a retired Supreme Court judge to look into black money. In his high-decibel campaign against the ruling UPA [United Progressive Alliance] government prior to the general election, Modi’s most frequent reference was to black money. He rode the gigantic wave of anti-corruption that had built up around the country. While the movement itself was mostly apolitical and civil society-driven, Modi was its biggest political beneficiary as he unleashed the most expensive campaign India had ever seen: chartered aircraft, helicopters, holograms, media campaigns, unabashed social media and Internet strategies and the like. It was hardly surprising then that, on his first day in office, Modi announced the setting up of that SIT.

“Ironically, the biggest black money case that has come up before the SIT so far is that of the Adani group, promoted by Gautam Adani, one of Modi’s closest associates. It is in his chartered aircraft that the soon-to-be Prime Minister zipped around India, accusing the incumbent of not fighting corruption. The Adani group allegedly took out over Rs.5,000 crore to tax havens, using inflated bills for the import of power equipment from South Korea and China, the SIT on black money was told by the Directorate of Revenue intelligence (DRI) and the Enforcement Directorate (ED).”

The writer shows how Modi’s government is no better than the previous one. “Take, for example, one of Modi’s key ministerial colleagues, Ravi Shankar Prasad, who handles the key portfolios of Law and Telecommunications. In December 2014, the Financial Times of London reported that Prasad had been on the payroll, as a lawyer on a retainership, of Mukesh Ambani’s Reliance group for several years. He is responsible for the telecom sector, where the Reliance group is investing several crores of rupees to roll out a 4G broadband network around the country. According to documents I accessed during the research for this book, even Prasad’s lawyer son is a consultant with Reliance.

“Central auditors have found several lacunae in the manner in which Reliance obtained the 4G spectrum, including suspected forgery. Their audit still awaits the government’s response. How will Prasad take an impartial decision on the issue? Modi, who rode to power on an ant-corruption mandate, seems unconcerned.”

The book raises the centuries old question about the popular will and the public weal. The people are easily misled. “That the Supreme Court had twice indicted Modi’s Gujarat government—once as modern Nero in the context of the 2002 anti-Muslim pogrom in Gujarat, and a second time for ‘non-application of mind’ when ruling on the 2002 Akshardham terrorist attack —did not matter to India’s electorate then. Many believe the government was complicit in the violence against Muslims during the Gujarat riots. In the Akshardham attack, the State police had framed innocent Muslims against whom there was no credible evidence, and the State’s Home Minister, Modi himself, did not apply his mind, the apex court said on the very same day the results of the 2014 general elections were declared. Yet, the Gujarat Chief Minister secured a majority for his party, a first in over three decades for an Indian political party. As India and most of the world took in Modi’s massive victory, the day also marked a milestone for one of his close associates.”

The book invites some thought about the Indian character. In 1923, the Governor of Bengal wrote to the Viceroy about bribes being offered to legislators. Motilal Nehru complained in a letter to his son, Jawaharlal, of Birla’s money being used to promote Lala Lajpat Rai’s politics. Rajaji predicted that corruption would spread after Independence. Josy Joseph’s case studies should prod serious reflection on the deep roots of corruption in India.

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