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Working For The Rights & Survival Of The Oppressed
NAGARAJ.M.R… VOL.05 issue. 43 …………26/10/2011
RTI / Human Rights Activist
in Indian Courts of Law / Justice
Editorial : CORPORATE CRIMINALS
/ CORPORATE TERRORISTS / TAX THIEVES RESPONSIBLE FOR ALL ILLS IN INDIA
In India , a small shop owner to big industrialist have mastered the art of TAX
EVASION . their teachers - some corrupt tax officials & auditors. The black
money thus created
is causing inflation, feeding the mafia , underworld. Some industrialists lobby
( bribe ) with the government & gets favourable laws enacted. This black
money is the main source of funds for political parties , religious bodies
& terrorist outfits.
The recent raids by C.B.I & KARNATAKA LOKAYUKTHA have proved how the tax
officials have become multi-millionaires. The sad part is that some of the
police officials who are on deputation to C.B.I & LOKAYUKTHA themselves are
This scourge can only be cured by corporate accountability intoto. However ,
all the industrialists , traders who are demanding for more flexible labour
reforms , economic reforms , infrastructure , etc are not at all concerned
about their own accountability with respect to tax , environment , other laws.
The MNCs coming to India are not coming here for best Indian talents or
infrastructure alone. In their own countries they are feeling the
heat of strict environment laws , consumer laws , share holder disclosures ,
corporate accountability. Some of these MNCs are being kicked out of their
countries , by it's own people .These MNCs are aware that in India , by
greasing the palms environment laws , labour laws , tax laws , etc everything
can be flouted , cases in courts can be dragged on for years . share holder
disclosures , corporate transparency is minimum.
However when a concerned citizen complains
about the crimes of guilty corporates , organizations or corrupt public servants
, immediate action is not taken. The file is kept pending for months , years
together , allowing the criminals to manipulate all the evidences ,
records , ground situations. Finally even if action is taken guilty will be let
out due to favorable evidences , there are chances that the concerned
citizen himself is falsely implicated & put behind bars . in all such cases
all the involved parties must be subjected to lie detector tests .
Bottomline : development is a must , it must
be all around . but not at the cost of majority to make a few richer.
Jai Hind. Vande Mataram.
CORPORATE ACCOUNTABILITY IN INDIA
CORPORATE ACCOUNTABILITY Scandals related to the appalling practices of multinational
corporations like Union Carbide (now DOW), Enron, Coke, Cadbury, and
others may have shocked the nation and the world in the recent past, but the
media rarely highlights corporate crimes that extend to murders, destroying
habitats, threatening indigenous cultures, causing disease, contaminating the
planet's food supply, poisoning
our groundwater and even destroying the very air we breathe.
You think this is an exaggeration? Well consider this. In Bhopal, India more
than 8,000 people died in the first three days after 40 tonnes of lethal gas
spilled out from Union Carbide's pesticide factory in December 1984. People
woke in their homes to fits of coughing, their lungs filling with fluid.
520,000 people were exposed to poisonous gases. 150,000 victims are chronically
ill, and even now one person dies every two days. Union Carbide merged with Dow
Chemical Corporation two years ago and has ceased to exist as an entity while
the present owners Dow refuse to accept any pending liabilities in Bhopal including
clean-up of the abandoned site.
In Kodaikanal, India, Hindustan Lever, a subsidiary of Unilever Plc, an
Anglo-Dutch multinational dumped mercury waste from its thermometer factory in
the surrounding forests and on an innocent local community. When the scandal
was exposed, first the company denied that there was a problem and later fudged
facts and figures until the Indian authorities forced them to come clean. Since
then Unilever has retrieved and sent back to USA some of the waste for disposal
but are shying away from compensating affected workers and further
environmental remediation measures.
Monsanto, one of the world's largest pesticide companies, continues to sell its
genetically engineered seeds to farmers around the world despite growing evidence
of failure of crops like Bt cotton, that has reduced once well-to-do farmers in
the developing world to penury and poverty while the threat of contamination of
indigenous species by GE
seeds increases everyday.
Bayer AG, a German transnational continues to manufacture and sell phased out
pesticides like Methyl Parathion (brand name Folidol/Metacid) in Asia despite
an assurance to their European investors and stake holders that they would stop
manufacturing these organo-phosphate poisons.
Ship-owning companies (and indeed, their countries) like Bergesen (Norway), and
Chandris (Greece) meanwhile, regularly violate international and national laws
and dump their hazardous wastes at ship-breaking yards in India, Pakistan,
China, Turkey and Bangladesh. The voluntary guidelines issued by International
are not enough and it is imperative that these guidelines are made mandatory to
make the ship-owners liable and responsible.
In the era of globalization, multinational companies increasingly move around
assets, products and wastes on a global chessboard to maximize their profits
and minimize their costs. These companies are using differences and loopholes
in national environmental and health laws for example to export pesticides and
destructive technologies to
poorer countries to the detriment of local communities. What international body
oversees them, or sets rules for their behaviour, or holds them accountable
when they transgress?
It is no longer just the conspiracy theorists who believe our world is
increasingly ruled and ruined by large multinational corporations. The World
Trade Organisation has supplanted environmental treaties and regulations.
Corporations have become accountable only under the rules of a free market,
free trade and a free for all on human rights and the environment.
The state of our environment has not improved, in fact it has deteriorated. The
gap between the world's rich and poor has widened. Instead of providing
developing countries with the tools for sustainable development, corporations
have pushed their dirty
technologies and polluting industries on to some of the world's poorest
A recent UN report revealed that Exxon, with $63 billion, is worth more than
Peru or New Zealand. General Electric more than Kuwait. Shell is worth more
than Morocco or Cuba.
In the past ten years, corporations have not only resisted
environmental challenges, they have lobbied to water down
international treaties and even succeeded in getting countries to
pull out of environmental agreements altogether. They have maintained
their unsustainable practices in all sectors. It is apparent that
more than just voluntary measures are needed to control these
A recent report by WWF states that if we continue at current levels
of consumption we will use up all of the Earth's resources within 50
years, and we will need two more planets to meet our resource needs.
We either take urgent action to save the planet, or we get off.
The UN Environmental Programme agrees that "the state of the planet
is getting worse." They say "there is a growing gap between the
efforts of business and industry to reduce their impact on the
environment and the worsening state of the planet."
At the root of our environmental problems are the unsustainable
practices of the corporations that shape our economies. But what is
the good of a short-term healthy economy if we can't drink the water,
eat the foods in the fields or breathe the air?
Current systems of governance in Asia (as elsewhere) are proving to
be deficient against the activities of abusive multinational
corporations. To roll back the excessive powers of corporations and
to pressure governments to check corporate abuse and prosecute
corporate crimes, greater public participation is a must. The Rainbow
Warrior's Corporate Accountability Tour of India is part of a global
movement to change the climate of opinion against abusive
corporations and to turn the tide in favour of fundamental human
Corporations need to be held accountable for their actions that are
destroying the planet, destroying people's lives around the globe.
There is only one answer. We must stand up to the corporations. Our
governments must agree on international, legally binding rules for
corporate responsibility, accountability and liability: a set of
rules that business must follow, and governments must enforce.
The list of rules is long, but so are the crimes.
The world needs corporations to be held accountable to the following
laws – no matter where they operate in the world. HUMAN RIGHTS WATCH
is calling upon the Indian Government to endorse the Bhopal
Principles on Corporate Responsibility, which call on Multinational
• Accept liability for environmental damage and compensate victims of
• Accept liability for the damage, no matter when it happens, what
the cause or who in the corporation is responsible;
• Accept responsibility for damage and injury beyond national borders
including accidents in the oceans and atmosphere;
• Ensure that they do not infringe upon basic human rights;
• Disclose all information regarding releases into the environment to
• Protect human and social rights including the highest standards for
rights to health care and a clean environment;
• Avoid influence over governments, combat bribery and practice
• Allow states to maintain their sovereignty over their own food
• Implement a precautionary principle and take preventative action
before environmental damages or health effects are incurred; and
• Promote and practice clean and sustainable development
CORPORATE FRAUDS IN INDIA
Corporate fraud is
nothing new to india , satyam company is just a new addition
to it. Satyam co was able to commit such a huge fraud & keep it under wraps
for years goes to prove the honesty , integrity of our public servants ,
government officials belonging to SEBI , RBI , tax dept , pollution control ,
labour depts. , etc & the honesty of auditors & company
secretaries. Ofcourse , still there are few honest people in public service ,
auditing & company secretaryship , but majority of them are hand in gloves
with corporate criminals. Definitely , this fraud will also be brushed under
the carpet after certain time as other frauds happened , afterall these frauds
are the money spinners for political party funding , mafia , underworld &
IN INDIA , government
reports , records , everything can be bought for a price. During Karnataka
lokayukta raids huge wealth amounting crores of rupees were found with each of
the corrupt government officials like police , engineers , tax officials ,
etc. How those government officials with few thousands of salary earn so
much , by compromising with their government duties , by creating fake
government reports , records , etc . The government & the courts of justice
treat those government reports , as sacrosanct like TEN COMMANDMENTS DIRECTLY
FROM THE MOUTH OF GOD HIMSELF.
The CORPORATE CRIMINALS
& RICH CRIMINALS buy favourable government reports , records from the
government officials commit bigger crimes , escapes from legal prosecution by
proving their innocence , honesty with the aid of BOUGHT GOVERNMENT REPORTS
& RECORDS. The courts of justice lacks broad vision , it has only narrow
vision as a riding horse's vision is narrowed . courts of justice is only
bothered about technicalities , evidences , records , it lacks the spirit of
QUEST FOR TRUTH , it lacks truth finding mechanism out of massive reports
, records , evidences. The rich criminals are in a position to manipulate , buy
out evidences , government reports , so definitely they will escape from hook.
Today , I can convincingly state that our legal system is such that ,
even the terrorists who attacked our TEMPLE OF DEMOCRACY - THE INDIAN
PARLIAMENT will be let free , when they can fully buyout evidences , reports ,
In this backdrop , the
corporates technically maintain clean public image although privately they are
frauds , criminals. If anybody makes a statement of truth against them , those
corporate criminals will slap defamatory & other criminal charges against
such persons. The courts of justice upholds the claims of not the speaker of
truth but the corporate criminals , on the basis of bought evidences ,
government reports. The courts doesn't go into the truthfulness of those
reports , evidences & sends the speaker of truth to prison. If any
person has made any complaints of fraud against Satyam Co , two months back he
would have definitely faced criminal prosecution & jail term. As all
the records , auditor reports , company secretary report , reports
of ministry of company affairs , reports of tax departments , everything
was in it's favour. The courts are only bothered about evidences ,
records which were all in satyam's favour , the courts are least bothered about
quest for truth & justice. In this manner in India , there are hordes of
private companies where frauds have taken place & taking place & wiil
Just recently after
Ramalinga raju's own statement , does it became public that the reports of
auditor , company secretary , related governmet records are all false. Base
linbe everything was bought. Do remember that whether it is SATYAM FRAUD ,
ENRON SCAM or XEROX SCAM , those were not found , revealed either by our
investigating agencies or the government. Satyam's Fraud came to light due to
pressure created by the recession , market forces on the company's promoter
Mr.RAMALINGA RAJU & his resultant confession , Enron scam was unearthed by
US investigators in USA during the corse of their investrigation , It is the
same with XEROX Co . till those revealations , those companies were good ,
legally abiding cos in govt records. THAT MEANS THEY HAVE BOUGHT OUT INDIAN
LEGAL SYSTEM EFFECTIVELY.
In this manner , in India
most of the entrpreneurs small shop owners to big corporates buy out tax
officials , labour department officials , pollution control board
officials , etc & openly indulge in unfair , illegal trade practices
, labour practices , legal violations , etc , still go unpunished , as as per
book , the government records they are law abiding , persons ,
Entrepreneurs , promoters
of big corporations collect public money either through shares ,
debentures , bank loans or all . so ideally public are also stake holders
in such companies . The criminal entrpreneures , promoters
siphon-off companies resources in various ways like selling company
assets to their sister cos at a lesser value or purchasing assets from
sister cos at a higher value , giving loans to sister cos at low interest rate
or taking loans from sister cos at higher interest rate , etc. in this way they
siphon-off resources of public companies / enterprises with bank loans to
their own family owned sister cos. We at e-voice of human rights of watch are
ready to catch such corporate criminals & help the government , ofcourse
subject to conditions , are you ready ?
In india , tax compliance
is worse. In our criminal justice system, there is rigorous imprisonment for a
pick-pocketer stealing Rs.10. even the authorities spend thousands of rupees in
legally prosecuting him & the thief spends a year or more as punishment behind
bars. Where as there is no commensurate investigation nor legal
prosecution nor punishment for corporate thieves , evading tax to the
tune of crores of rupees. In contrast, those tax thieves pay a part of that
booty to the ministers & political parties and get crores of rupees tax
exemptions , incentives from the government. Government is rewarding corporate
The tax officials of central & state governments are hand in glove with
these corporate criminals & traders. For a price, they are helping
corporates & traders in evading tax. Most of the tax officials are wealthy
& leading luxurious lifestyles , much beyond the scope of their legal
income. The black money thus generated every year by tax evasion , is many
times more than our total annual budget allocation. As a result, all our fiscal
reforms fail & inflation is soaring. This black money is the source of
illegal funding of political parties , terrorist outfits & underworld. It
is a greater threat to national unity & integrity.
Both the central government & karnataka state government have failed
to collect the full , actual tax dues from corporates & traders. As a
result , the governments don't have enough money in their coffers even to
provide basic needs like health care , education , safe drinking water , etc to
the poor & needy. For every Rs.100 tax evaded , one poor patient is dying
without medical care , 10 poor persons lack education , 100 persons don't get
safe drinking water , 100 persons barely survive on a single piece meal per day
, 20 persons starve. Most of The government officials , ministers &
people's representatives who have deliberately failed in their duties of tax
collection & welfare of poor citizens , SHAMELESSLY indulge in luxurious
lifestyle at the expense of poor tax payer . they live in paltial bungalows ,
chauffer driven AC cars , all living food expenses paid by exchequer , dine at
5-star hotels , only drink bottled mineral water , eat non-vegetarian
dishes , drink alcohol sitting before mahatma gandhi's photograph &
preaching mahatma's ideals. Mahatma preached & practiced simple living ,
vegetarianism & he was teto teller , he paid for his expenses from his
earnings . these public servants are parasites , who are making merry at the
expense of tax payer.
Some non government organisations ( NGO) have formed trusts and under the aegis
of those trusts are running educational institutions , hospitals , community
halls , etc , in the name of providing free / subsidised services like
education , health care , etc to the poor. It is only in record books , they
conduct fake medical camps , self employment training camps . in practice they
are running these educational institutions , hospitals & community
halls as commercial enterprises & collecting huge fees. they are not
even remitting full fees collected to the trust account & swindling
the money. no outsider is allowed to become a member of these NGOs , only their
cronies & their family members are in these trusts.
Numerous NGOs promoted by religious bodies , mutts are swindling public
& government money to the tune of crores of rupees. Nobody dares to
question the heads , pontiffs of these mutts , as at his feet VVIPs ,
ministers fall down. These religious bodies are hot beds of fundamentalism ,
terrorism & mafia. Hwere is the accountability of religious
bodies & political parties in in india ?
Inspite of bringing specific cases to the notice of authorities , they are mum
? hereby , E-VOICE OF HUMAN RIGHTS WATCH offers it's services ( subject to
conditions ) to the governments of india & karnataka , in apprehending the
criminals – tax evaders. Are you ready mr. singh sir & mr.Yediyurappa sir ?
If you are ready to do your duty look into the following cases , take
appropriate action & kindly inform me about the outcome.
WHY MULTINATIONAL COMPANIES ARE INVESTING IN
We condemn the brutal massacre by police on
farmers – who are going to loss all their lands , sources.of livelihood for the
sake of special economic zones , industrial parks , etc in various states of
In every mega projects undertaken by
government , both the state government & central government have functioned
like REAL ESTATE / COMMISSION AGENTS for the rich &
mighty . the government says it is acquiring lands for development of
industries , for public good. In reality there is only good of rich &
For forming S.E.Zs , corporates gets speedy
single window approvals from government , lands at concessional rates – lower
than market value , soft loans from Indian banks , tax exemptions for
years from the government , dedicated power supply , etc , from the government
. these corporates are even given free hand to raise share capital in the
Indian market. the government has enacted flexible labour laws specifically for
S.E.Zs , they can hire & fire without bothering to pay gratuity , etc and
they are exempted from providing P.F / E.S.I coverage to their employees
ie they need not worry about the occupational health hazards of their employees
, they can employ them till they are fit & throw them on streets
afterwards. These corporates take our own money, employ our own people ,
use our own natural resources & finally take away the net profits to
their home countries – what they give back ? – environmental pollution ,
tax evasions , low paid occupational hazardous jobs to locals , stock market
During Previous License Regime foreign, investment was not directly welcome in
India. As people at that time perceived it as "Neo colonisation"
& detested it. There were various restrictions on foreign investments. The
local industrialists under monopolistic
environment thrived, who were no way better than day light robberers, of course
with a few exception. Under the political patronage, the cunning industrialists
looted public money, cheated the government of tax, cheated lending banks &
cheated the investors
too. They easily flouted labour laws & made labourers to work in inhuman conditions.
During 1990's under the international pressure India signed GATT & slowly
started opening it's economy. Now, from 01/01/05 even product patent has come
into force in India. Are MNCs bringing high technology intensive industries to
India? No, not at all. They are actually denying sophisticated technologies to
India. They are only
bringing the FMCG industries - salt, chips, ketch-up, colas, for which India is
a huge home market. They are into services like Hotels, medical care,
marketing. In other cases, they are just marketing the products manufactured at
their bases in U.S.A. or Europe.
They are not bringing in new production
technologies in the areas like space research, nuclear energy, bio-technology,
pharmaceuticals or pollution control, to India. Also, some MNCs are relocating
their highly polluting industries to India, as they are subjected to stringent
environmental protection standards in their own home countries. Whereas, In
India the Government is highly corrupt & can be bought for a price. The
attractive points for foreign direct investment (FDI) in India are,
1. There is lack of comprehensive environmental norms.
2. The enforcement of environmental norms is lax.
3. The cost of health coverage, social security net to be provided to the
workers exposed to the occupational hazards is less.
4. The cost of compensation to be paid to the persons-who died or suffered
damages due to occupational hazards/environmental pollution is meager.
5. The enforcement of labour laws are lax.
6. Public money can be easily raised through lending Banks, primary market
within India & the public can be easily cheated.
7. The tax can be evaded through various loopholes like transferring money to
holding companies situated at Mauritius or countries which have double taxation
avoidance agreement with India.
8. The tax can be evaded, company money can be cheated by lending money to
sister / holding concerns at low interest rates or by selling shares, materials
to their private companies at low rates or by buying shares, materials from
their holding/sister concerns at exhorbitant rates, etc.
9. The corporate governance laws are almost absent in India & it's
10. Above all, the time can be bought by very slow Indian legal system, if any
11. On top of it, well trained, technically qualified people are available at
low rates through contractors.
Just consider the following cases which highlight the apathy, irresponsibility
of government of India and emboldened the cunning, MNCs:-
1. The India which boasts of so much scientific/technological advancements, is
till date has been unable to provide potable water to it's people. People of
west Bengal , Karnataka , Andrapradesh states are forced to drink Arsenic,
Fluoride poisoned water.
2. The people living near the mines of R.E.M.P. in Kerala are suffering due to
exposure to the radio active materials, Same is the case with the people of
Jadaguda, Jharkhand, living near the U.C.I.L. plant. Both M/S R.E.M.P & M/s
U.C.I.L are department of atomic energy enterprises.
3. Few years back, In Mysore railway station containers of radio- active
materials were left unattended. The dome of reactor building at construction
stage collapsed in nuclear power plant at Kaiga. A fire tragedy occurred in
Kakrapar nuclear power plant. In the recent Tsunami waves onslaught, certain
important facilities of Koodakulam atomic plant were damaged near Chennai.
4. In 1984, U.S. based MNC union carbide mass murdered nearly 20,000 people,
injured lakhs who are still suffering health problems. The polluted poisonous
accident site i.e. Union carbide plant in Bhopal is not yet cleared off toxic
materials even after 20 years.
This is still further damaging the residents of Bhopal.
5. In the above union carbide disaster, the Government of India didn't present
the case properly before supreme courts of India & U.S.A.. As a result the
MNC just paid a pittance as compensation. As per that the cost of Indian lives
are just a fraction of cost of
American lives. Just imagine if a same disaster occurred in U.S.A. at the plant
of a MNC headquartered in India, what would have been the consequence?
6. In India, hazardous chemicals laced with food additives are passed through
the drinks, beverages like pepsi, cola, coco cola very easily.
7. The medicines like nimesulide, paracetamol, etc. with hazardous side effects
which are banned in U.S.A.& Europe, are easily marketed by the same
U.S.& Europe based MNCs in India.
8. In India spurious drugs, medicines, food stuffs are easily marketed.
9. In India, the clinical trials of new medicines under research are done
without proper compensation structure to those being tried upon ie. Virtual
10. In India, the genetically engineered BT crops are being introduced without
paying attention to formers, ecology or eco-system.
11. In India, during setting up of large projects, scant attention is paid to
environment, eco-system & the displaced persons.
Most of the times, in government projects itself the displaced persons are
cheated by the government in numerous ways.
12. In India, various Government as well as private hospitals dumps hospital
wastes with deadly viruses in the open, with scant regard to public health.
13. In India, aged ships belonging to foreign countries are breaked down to
scrap in ship breaking yards of Gujarath , Maharashtra & AP. Various toxins
like the Asbestos, lead, etc & the hazardous, dirty water, Oil inside the
ship are drained into Indian seashore. The labourers here are forced to work
without any safety gears.
14. When specific cases of human rights violations were brought before the
government & Judiciary by us , both of them didn't respond at all.
All the above cases highlight the fact that, government of India & Indian
judiciary treats it's citizens lives as cheap, dispensable at will. This is the
major attracting force for MNCs to India.
INDIAN CAPITALISM ALWAYS
HAD A CRIMINAL SIDE - By Praful Bidwai
The Satyam [ Get Quote ]
scandal has been wrongly called 'India's Enron', after the gigantic fraud at
the US energy-trading company, which came to light in 2001 and became a
metaphor for corporate crime.
In fact, the Satyam scam
is much bigger in absolute magnitude and likely impact. The amount stolen from
Enron was Rs 2,866 crores (Rs 28.66 billion) at current exchange rates. In the
Satyam case, according to its promoter-chairman B Ramalingam Raju, Rs 7,136
crores (Rs 71.36 billion) were involved. Also greater are the number of
defaulting agencies and their failures.
The impact of the Satyam
scandal won't be confined to the 53,000 people on its payroll -- a number
higher than the 40,000 Enron employees. The entire Information Technology
industry will be singed by the swindle just when the global economic slowdown
is already hurting it. The World Bank's ban on IT-India's No 3 Wipro [ Get Quote ],
and Megasoft, besides Satyam, for unethical practices will further aggravate
the industry's difficulties.
The Satyam swindle has
tarnished the image of India's [ Images ] IT
industry and cast a shadow over its remarkable 30 percent annual growth, which
is generally attributed to virtuousness, brainpower and hard work, not
inherited wealth. It has lowered the profile of Andhra Pradesh as a land of
gutsy businessmen -- fondly paraded by successive chief ministers as
'Andhra-preneurs' -- who combine a robust native business genius with a modern
Above all, the scam has
exposed huge cracks in India's corporate governance structures and system of
regulation through the Securities and Exchange Board of India, SEBI, ministry
of corporate affairs and the Serious Fraud Investigation Office. Unless the
entire system is radically overhauled and made publicly accountable, corrupt
corporate practices will recur, robbing wealth from the exchequer, public banks
The Andhra Pradesh
government has treated Mr Raju with kid gloves. It failed to arrest him for
three days after he made a public confession, thus giving him time to
sanitise/destroy incriminating evidence. His detention by the state police
means that SEBI has been effectively barred from questioning him. This has bred
speculation that Mr Raju has cut a political deal under which his family would
be protected and certain officials rewarded. The Centre too is preparing to
spend Rs 2,000 crores to rescue Satyam and public sector units haven't shifted
their IT operations to other companies.
Mr Raju's January 7
confession and surrender to the police should fool no one. Contrary to his
earlier claim that 'neither me, nor the managing director (his brother) took even one rupee/dollar from the
company...', he now says he has been cooking Satyam's books for seven years.
He is estimated to have
made Rs 2,065 crores (Rs 20.65 billion) by artificially jacking up the price of
Satyam's shares and selling his holdings (14 percent of the total). Satyam's
Chief Finance Officer Vadalamani Srinivas has said the fixed deposits shown in
the books were fictitious.
We still don't know the
scam's true dimensions. But two things are abundantly clear. First, it's
extremely doubtful that Mr Raju inflated Satyam's income by Rs 5,000-plus
crores (Rs 50 billion) and even put in Rs 1,230 crores (Rs 12.30 billion) of
his own money. It simply doesn't stand to reason that he would do this and not
siphon off large sums. Equally dubious is his claim that Satyam's operating
margin was as low as 3 percent, compared to the 25 to 30 percent for
top-ranking IT companies.
If Satyam's margin was
indeed higher, then thousands of crores were spirited out of the company. It is
imperative that this trail is rigorously traced. It would be surprising if it
doesn't lead to real estate scams or to benami accounts held by politicians. Former Union
revenue secretary E A S Sarma, a public-spirited civil servant of exceptional
integrity, has tried to find some of these tracks through the Right to
Information Act, RTI.
He looked at a private
company which is building Gangavaram Port in Andhra and found that 18 percent
of its equity is held by Lakeside Investments Ltd, a Mauritius-based company,
'apparently... a smokescreen for tax evasion.' Mr Raju reportedly owns a
company with a similar name, Lakeview Investments, and with the same address.
Mr Sarma has also raised
serious questions about the way the state has handed out thousands of acres
without competitive bidding to Maytas (Satyam spelt backwards) Properties and
Maytas Infrastructure. Maytas Infra alone has projects worth Rs 30,000 crores
(Rs 300 billion) in Andhra, including the Rs 12,000-crore Hyderabad metro rail
and irrigation projects worth Rs 13,000 crores (Rs 130 billion). All this
warrants an in-depth investigation.
Secondly, surrendering to
the police in India was Mr Raju's best guarantee against extradition to the
United States, where numerous criminal cases have been filed against him and
where the punishment will be more rigorous and prompt than in India. For
instance, Enron's Kenneth Lay was charged on 11 counts and set to be sentenced to
45 years in jail when he died.
If Mr Raju is tried for
criminal breach of trust in India, he could get away with as little as three
years. Even if he gets a life sentence, he may end up spending 10 years or less
The Satyam swindle became
possible because all supervisory mechanisms failed, including the statutory
auditor, PriceWaterhouseCoopers, PwC, independent directors, and SEBI. PwC
didn't verify the authenticity of the account-books. It had similarly failed
with Global Trust Bank, which collapsed. Irregularities were noted in PwC's
handling of Satyam accounts in 2001, but mysteriously, no probe was conducted.
Similarly, a complaint
was filed with SEBI by Member of Parliament Ramdas Athavale in 2003. But under
political pressure, this was not pursued.
PwC, which has audited
Satyam's accounts since 1991, is guilty of grave misconduct and should have
faced punitive action from the Institute of Chartered Accounts of India, ICAI.
Ironically, PwC has two members in the ICAI disciplinary council!. The council
met, but failed to take action against PwC. ICAI, like the Bar Council or
Medical Association of India, shields, and rarely acts against, even the most
errant of its members.
directors did no better. They asked no questions about the accounts When the
board met last month to approve the scandalous proposal to invest $1.6 billion
in Maytas, it didn't even refer to the conflict of interest in buying a company
in a completely unrelated business, floated by the promoter. It only went into
technicalities of conformity with SEBI guidelines, and valuation of assets.
Indeed, one of the independent directors, Krishna Palepu of the Harvard
Business School, waxed eloquent on the merits of real estate investment.
These directors collect fat
annual fees ranging from Rs 13 lakhs to Rs 92 lakhs (Rs 1.3 million to Rs 9.2
billion) just for attending a few meetings, but clearly lack independence. Many
independent directors in India see board memberships as sinecures or lucrative
pastimes unrelated to corporate governance and public responsibilities.
Even worse was SEBI's
failure to investigate Satyam and refuse to approve its patently foul
transactions including the Maytas deal, which was aborted by investor protests.
SEBI also ignored a December 18 letter on Satyam sent by Mr Sarma. Other
authorities also turned a blind eye to various complaints about the illegal
allocation of 17,000 acres of land to Satyam group companies in different
cities, in violation of their master plans.
India lacks adequate
corporate regulation, and its enforcement is pathetic. For instance, as many as
1,228 of the Bombay Stock Exchange's [ Images ]
4,995 listed companies have failed to submit reports required by Clause 49 of
the Listing Agreement, including information on their boards' composition,
audit committees, CEO/CFO certification of accounts, and related-party
transactions and subsidiary companies.
Corrective action is
overdue if corporations are not to cheat stakeholders and the public. Indian
capitalism has always had a criminal side to it. Our corporate nabobs often
milk their companies by appointing procurement and distribution agents, by
under- and over-invoicing imports/exports, evading taxes, indulging in insider
trading, and dressing up balance-sheets. Satyam fits this pattern, which is
widely prevalent in most brick-and-mortar companies.
Some corrective steps are
self-evident. Statutory auditors aren't enough. We need a Board of Audit, which
like the Comptroller and Auditor General of India, is authorised to conduct
surprise audit on its own or on whistle-blower complaints. Besides, no auditor
should be allowed to continue beyond three years.
The government should
create a pool of independent directors from amongst citizens of high integrity.
Impartial authorities, not company managements, should appoint them and fix
their remuneration. Cross-directorships must be banned. All agent appointments
must be thoroughly scrutinised. Penalties must be stiffened. The conviction
rate in corporate frauds, currently under 5 percent, must be improved.
Breach of trust and fraud
must be heavily penalised. If an auditor fails in his duty in India, he faces a
ridiculous penalty of Rs 10,000 and maximum imprisonment of 2 years. The US
Sarbanes-Oxley Act, passed after the Enron and WorldCom scandals, awards
imprisonment for 20 years. The US has greatly improved fraud detection by
reforming audit methods and offering incentives to whistle-blowers.
We must learn from all
this and acknowledge that deregulation promoted in the name of 'trusting' CEOs
and creating a 'favourable investment climate' is dangerous.
Is the Satyam scandal just about a promoter manipulating the
financial statements of his company to show a superior performance? Or is it
about systematic siphoning of funds from the company over the years? Emerging
events seem to increasingly point to the latter.
Let’s start with the
so-called “confession statement” of Mr Ramalinga Raju, the disgraced chairman
of the company. Lawyers have already expressed doubts over whether the
statement can actually be deemed a confession and enough to implicate Mr Raju.
Indeed, they say that it is a very well drafted document designed to draw
attention to the hole in the finances without implicating himself anywhere for
any act of commission.
A careful reading of the
statement shows that there is indeed merit in this view. Mr Raju has pointed to
cash balances not being the same as reported in the audited financial
statements, he has said of how revenues were inflated, and so on. But nowhere
has he said that he was responsible for this nor has he pointed his finger at
anyone else. Of course, as the chairman, the buck stops with him but that is
not the same as saying “I did it”.
If anything, he has tried
to project himself as the saviour by pointing out how he “arranged” Rs 1,230
crore for the company and how neither he nor the managing director “took even
one rupee/dollar from the company and have not benefited in financial terms on
account of the inflated results”.
Mr Raju appears to have
attempted to deflect attention from what is possibly the more serious crime of
siphoning of funds to the relatively lesser one of accounting skulduggery. This
is being clever by half. How on earth did he think that the shareholders,
lenders, legal agencies and the world at large would believe him on this?
People who were and are
working in responsible positions in Satyam say that the company has a real
business going and some of its divisions are extremely profitable and there is
no question of doubting the revenues from them. There is no way that operating
margin will be as low as 3 per cent, they say, unless of course, if money had
been sucked out of the company.
The second event that
raises doubts is the carefully orchestrated arrest of Mr Raju. He surrendered
himself to the police the night before he was to appear before the SEBI
investigating team. The arrest and remand ensured that SEBI was unable to
The market regulator will
eventually be able to quiz him, but the question is: Will there be evidence
destroyed before that? As it is, there is the possibility that Mr Raju may have
destroyed crucial evidence implicating him before he went public with his
And then, there is the
political angle to the scandal. Mr Raju and his companies (Maytas group) have
been beneficiaries of large public contracts for transport systems and
irrigation projects in Andhra Pradesh. Nexus between businessmen and
politicians is an accepted reality in this country. So is someone powerful
attempting now to protect Mr Raju? Or is it that he knows too much about
wheeling-dealings and hence needs to be kept away from investigators?
counter-allegations have been flying thick and fast from both the ruling and
Opposition parties in Andhra Pradesh over favours, secured and shown, to Mr
Raju by both. The government appointed board has a task on its hands. It will
have to dig, and dig deep to unravel the scandal in all its dimensions. What is
now out in public is probably just one dimension and it may be the least
scandalous one. Mr Raju has himself said that the irregularities have been
happening for years. Therefore, it is only correct to assume that more
skeletons will come tumbling out once SEBI and the Company Law Board bury their
noses into the books of Satyam.
There is the danger
though that political pressure will be brought on to scuttle the investigations
or obfuscate the findings. This is where the government-appointed board will
assume importance. Not only will the government have to appoint people of
integrity and high standing but these people will have to discharge their
responsibility of getting to the bottom of this scandal without hesitation or
ICAI to take stock
Finally, a word on the
auditors, Price Waterhouse. The Central Council of the Institute of Chartered
Accountants of India (ICAI), regulatory body of the accounting profession, is
set to meet on Monday to take stock of the developments from the Satyam scandal
on the profession.
members of the Central Council, Mr S. Gopalakrishnan and Mr Harinderjit Singh,
are senior partners of Price Waterhouse. Mr Gopalakrishnan signed the 2006-07
balance sheet of Satyam. Will the two gentlemen sit in on the deliberations on
Monday at the ICAI? Or will they opt out on grounds of conflict of interest? Or
better still, will they resign from the Central Council, which is the
policy-making and governing body of the ICAI? Is it too much to ask for the
India: Descent Into
By Colin Gonsalves
In the 61st year of the
republic, surely, India has transited into Kalyug. Surveys of the Union of
India as well as expert reports published by the Arjun Sengupta committee and
the NC Saxena Committee appointed by the Central government reveal that almost
77 per cent of the population in India are below the poverty line in terms of
the food intake minimum standard of 2,400 kilocalories (kcal) per person per
day, a standard set by the Planning Commission in 1979.
Over 50 per cent of all
women and children are malnourished with 17 per cent of the child population
being so severely malnourished that a whole new generation of Indians will
become adults with malformed brains and stunted growth. Even in the urban areas
where conspicuous consumption is always on display, malnourishment of children
is upwards of 50 per cent.
This is the spectre of
For the top 20 per cent
of the population (and less than 3 per cent of the sensex/stock market) who
have experienced the licence to loot, corrupt and cheat during the ongoing
period of globalisation, this is Satyug. Since the beginning of the decline of
Nehruvian social democracy in the early 1990s and the establishment of what is
called the liberalisation regime, the rich have never had it so good.
A seismic shift has taken
place in the thinking of politicians, corporations, administrators and judges,
fuelled partly by international capital and the devious planning of the World
Bank and the IMF. Whereas earlier and in accordance with the constitutional
mandate, the country was to be taken along as a whole, the resources of the State
were to be used to subserve the common good and a reasonable part of the gross
domestic product (GDP) was to be kept aside to subsidise education, health,
food, housing and transportation for the working people. With globalisation all
this began to change drastically, systematically and with abject cold-blooded
Education for all was
quickly jettisoned with the argument that it is impossible to educate so many
poor children, that it is inadvisable and unproductive to spread resources
thinly and that since in any case the middle classes are the engines of change,
State resources ought to be concentrated on them if the GDP is to be pushed up.
Thus, while fancy educational institutions multiply and students’ fees rise
many times over, poor students learn under trees or in the open (in freezing
cold or scorching summer) without schools, textbooks and often without teachers
and the officially promised mid-day meals.
The Supreme Court in TMA
Pai’s case, made a disgraceful decision opening the doors for commercialisation
and privatisation of education and casting a shadow on the earlier decision in
Unnikrishnan’s case correctly providing for strict State regulation and
prohibition on commercialisation.
Similarly, while some of
the finest health facilities in the world sprung up in the cities of India,
government public health facilities went into a tailspin. The public health
centers lacked medicines, doctors, testing equipment, beds and food for poor
patients. As the despair with public health care is increasing, the World Bank
merrily came along with its prescription for “user fees” requiring people below
the poverty line to pay for health services. Dalit or poor women delivering on
the pavements outside government hospitals became a common sight.
jurisprudential exhortation that the right to public health care, free drugs
and indigenously manufactured medicines is a fundamental right under Article 21
of the Constitution, the rot set in and is too deep to reverse. How does it
matter and what effect could it possibly have on the GDP if tens of thousands
of poor people suffer ill health or die of malaria or tuberculosis? From the
GDP point of view, health care for the poor simply does not matter.
The shift in ideology
away from social democracy towards what was quaintly called ‘globalisation’
affected the judiciary as well. Senior judges who were derisive of the
post-independence emphasis on ‘egalitarian socialism’ used the enormous power
of the judiciary to undermine social policies of the government, bypass binding
precedents and generally stripped the working people of constitutional law
In the Steel Authority of
India Limited case, the Supreme Court made it possible for capitalists to convert
their entire labour force into contractual labour, thus effectively taking away
all their protection under labour laws. In Uma Devi’s case, persons who were
employed and were working for decades in permanent work positions on a
pittance, were denied regularisation, thus giving a legal cover to slave
jurisprudence meticulously put in place by Justice Kuldeep Singh and others in
the Supreme Court was systematically dismantled by subsequently appointed
judges in the superior courts who had a pro-capitalist bend of mind. They saw
environmental law and environmental activism as an irritant which hindered the
‘development’ of the country. They, therefore, used the quite dubious doctrine
of ’sustainable development’ in an even more suspect way to allow for all kinds
of environmentally destructive industrial activity, quite unmindful of its
catastrophic and long-term effect on the environment.
As a result, India today
is in the process of being completely devastated. The forests have been
decimated in many parts indiscrimately for big projects, the cities are
polluted, lush green areas have been mined, the rivers of India turned into
sewage drains and water shortage has become so acute that in the years to come
social upheavals will centre around this acute deprivation. The great Indian
nation is being turned into a desert with its sacred rivers becoming dirty
When the tribals, dalits,
workers, slum dwellers and the dispossessed of this country protested, often
feebly, they were met with fierce repression. Police torture is widespread and
has become the principle forensic tool for the investigation of crimes. Nowhere
in the world, perhaps, has the police force turned into such an awesome body of
ruthless creatures in uniform, as in India.
The average rate of
conviction in the country in cases of atrocities against Dalits has sunk to 1
per cent. As a result, rape of Dalit women, murder of Dalits, destruction of
their houses, burning of standing crops, robbing of cattle, destruction of
Dalit temples, throwing excreta inside wells, untouchability and practices such
as the two tumbler system, continues unchecked till this day while the justice
system seems immune.
Despite the right to
housing being declared a fundamental right by the Supreme Court in Nawab Khan’s
case and although the UPA manifesto specifically includes a ban on forced
evictions of slums, about a million of the urban poor every year have their
homes bulldozed without notice, compensation or rehabilitation to make way for
the skyscrapers of the rich.
All this does not auger
well for the legal system in India, one of the main pillars of the democratic
State. The working people shy away from the courts and participate reluctantly
when they are dragged into the legal system through coercive proceedings.
Labour court proceedings throughout the country have shrunk by 75 per cent and
the once vibrant institutions that balanced the interests of capital and labour
have become stultified. Tribals shun the courts. Even the most serious of
crimes like rape and murder make the victims approach the courts with grave
This is not difficult to
understand as the legal system operates just like a colonial power, as an
engine of oppression. Probably, one million false or trivial cases are pending
in the Indian courts against innocent tribals who are forced to attend court
and loose their wages day after day. It took a Maoist uprising for PC
Chidambaram, the Union Home Minister, to understand this elementary truth and
announce the withdrawal of one lakh cases filed by the State against tribals in
Decisions of the Supreme
Court under the Land Acquisition Act have made possible tyrannical state
acquisitions of land throughout the country making the vast majority of Indian
farmers suspicious of the legal system. With regard to as elementary and
established a right as a woman’s right to maintenance, the woes of women in
family court matters seems never ending.
The State just can’t get
its act together to enforce the appointment of judges although it is now well
settled that India has one fifth the number of judges that it needs. Delays are
not accidental, they are intended. The legal system is designed to tie the
litigant up in endless and expensive proceedings where justice is illusory.
Litigation, which is the only lifeline between the judiciary and the people of
India, is being denigrated time and again and not unexpectedly because there
are those who believe that the legal system is best used for sorting out
property disputes and commercial matters. Legal aid has been reduced to a farce
of seminars with the presentation of bouquets. In death sentence cases
involving destitute persons, the legal aid lawyer may even miss a cross
examination or two.
It is sometimes all too
easy to blame judges for the ills of the legal system. If one turns to the
quality of the Bar, one would notice all kinds of elements wearing bands and
gowns and committing all kinds of illegalities. Criminality pervades many parts
of the legal system.
Between democracy and
darkness stands the judiciary. It stands heads and shoulders above the judicial
systems in Asia. But it is in rapid decline. Ahead is pitch darkness.
This is the period of
Kalyug. The lust for money that globalisation brought with it has decisively
depleted spirituality, morality, collective sharing, equality and social
justice. It has only institutionalised a spiraling network of stark and
relentless injustice. Only a national uprising will reverse this trend.
[The writer is a senior
lawyer, Supreme Court of India, and Founding-Director, Human Rights Law
PRICOL VP MURDER , SATYAM CO FRAUD , SINGUR AGITATION &
GRAZIONO CEO MASS MURDER
- An eye opener to irresponsible corporate India & GOI
Few Years back , in the
state of tamilnadu India , some of the sacked laboureres of M/S PRICOL
INDUSTRIES mass lynched & murdered a higher management official , for
sacking them from their jobs. This act of laborers is a heinous crime , illegal
& inhuman act. In India , nowadays the labour movement has been
hijacked by lumpen elements , rowdies , criminals. These criminal elements are
there in the posts of union leaders just to further their self interests rather
than the welfare of the workers whom they represent. These lumpen elements , so
called leaders thrive on controversies & creates disturbances , vitiates
harmonious relations between the management – workers. The company as an
organization needs team work to survive & thrive in business. These labor
leaders even oppose for example OUTPUT BASED PRODUCTION INCENTIVE SCHEME –
which is a win win situation for both the management
& workers. These leaders go to the extent of killing the hen which lays
golden eggs , all for their selfish gains. These rowdy leaders become leaders
just to make money , to make political entry , to shirk-off work , to escape
night shift work , etc. In the midst of these rowdy elements the genuine
concerns of ordinary workers are not at all heard. The ordinary
workers who depend on the organization for their livelihood , who work hard to
earn more incentive , are the ultimate sufferers.
In the same manner ,
the management of companies must be sensible to the genuine concerns
of it's workers , it must properly balance the worker's concern
& company's position . some of the managements enforce harsh rules on
workers , o.k , the management personnel of those very same companies function
without discipline , misuse company properties , siphons of company
money , take commission from vendors , cheat the government of tax dues ,
violate environmental laws , tax laws , labor laws by bribing
officials , etc. Finally this kills the organization as a whole – the end
losers shareholders , lending banks , government & our economy.
public agitation at singur west Bengal , India against the TATA NANO
project , is nothing but a struggle for survival by the land loosers. The
public of singur are living there since ancestral times , they fully depend for
their livelihood on the vegetables & other small crops grown there by them.
The livelihood , their survival is at stake. The irresponsible west Bengal
government , to favour the corporate lobby , acquired the lands forcibly
dirt cheap & gave it away at dirt cheap price to TATA'S. why such a
cheap , long term lease period has been given to TATA'S ? The
government literally has thrown the land loosers on street , it didn't bother
about their survival nor about their proper rehabilitation . Basically , TATA'S
is a business house , their only intention is to make profits , more money ,
not the welfare of people. Why not TATA'S acquire land in open market ? the
acquire of lands by state or central government for public good like for
building dams , roads , channels are at least justified
however the rehabilitation is more important. Other than for the projects
concerning public good , for all the projects of private enterprises like pay
& use roads , airports , industries , etc , the lands must be acquired in
the open market at market prices . For some industrialists bid to make riches ,
lives , livelihood of thousands should not be sacrificed. It is not
alround development. In a democracy , the voice of the public , locals should
be honoured but not the diktats of ministers or babus in secretariats. The
present corrupt system in India leading to rise of naxalism , underworld ,
separatist movements are all due to the government policies since independence
till date according to the wisdom (?) of ministers & babus , totally dishonouring
the public voice.
Now , take the case of
Graziono CEO mass murder in noida , it is nothing but fallout of hire
& fire policies. Every human being works for survival , on his meager
salary there will be family dependents , all of a sudden if a person is
fired from service , his whole family will be on streets. O.k , all corporates
nowadays preach & breath the mantra of USA , for everything be it
infrastructure , flexible labour policies , it compares itself with
those prevailing in the USA. Now , the corporate India is getting
infrastructure at dirt free prices ( very high in the USA ) , has got hire
& fire mechanism by employing contract labour , very lenient environmental
norms , very lenient food & drugs safety rules , relaxation in Factory Act ,
ESI & PF acts , etc add to it the rampant corruption in all govt
departments by which you can get any certificate for a price.
In the USA , of course
there is hire & fire policy , however the minimum wage levels are also very
high , so that during good times workers can save money for their future. Also
, there is social security net to take care of ousted workers , then why not
Indian corporates paying good salary to workers during good times ? why not
corporate India making good contribution to social security net ? in the USA ,
there are good infrastructure facilities they take pride in paying taxes
to the government , the corporate India always lobbies for tax cuts ,
subsidies , loan waivers , etc. in the USA the environment norms are very
strict , the companies manufacturing hazardous chemicals which were ousted by
the US government have set up shop in India . Government of USA treats lives of
people as precious , where as Indian government treats lives of it's people as
dispensable. In the USA , the food safety & drugs , medicines safety
standards are very high , the drugs , high level adulteration food products
banned by Government of USA are sold in the India , this is the difference
between government of USA & India , the way they treat their people's
lives. Loan recovery , investor safety norms are very high in the USA , where
as in India , loan defaulters , share holder swindling , Non Performing Assets
is very high. Inspite of all the strict norms we have seen enron ,
Xerox debacles in the USA & recent bank fallouts in the USA. In India
with such lax norms , only you can guess.
The lesson here for the
government of India is , development must be allround , must not be at the cost
of thousands. Listen to the voice of public but not to the commands of greedy
selfish corporates , lobbies . Do stop thinking that only babus , IAS
officers & minister are brilliant knowing all and the public people
are fools fit to be herded by IAS officers. Do remember that India is a
democracy not a BANANA REPUBLIC.
The lesson for corporate
India , aping the USA intoto is O.k , but not by parts & bits ,
follow corporate USA in every aspect of corporate duties & responsibilities
Final word , when it comes
to the question of survival , life , livelihood , it know no bounds .
After all STRUGGLE FOR SUVIVAL is a basic animal instinct , it is a basic human
right of every individual .
Top 10 Financial Scams in
- Siddharth Singh
Financial scams have a habit of
cropping up with an alarming regularity in the Indian financial system. We have
reconciled to financial irregularities to such an extent that we simply do not
pay heed to smaller scams that take place around us on a daily basis. I am, or
rather was, a part of the financial machinery for a few years, and trust me,
even the private sector is not entirely free of the machinations of
unscrupulous and enterprising scamsters. The scope of the money involved
multiplies manifold in the public sector, with a corresponding drop in
Financial Scamsters Are Rarely
Despite a plethora of scams that
surround us on a daily basis, frequently scams of large proportions come to
light, and manage to stun even our jaded sensibilities. Then, there is the
usual round of allegations, counter-allegations, enquiries and legislation.
Some of our most notable regulations and financial institutions are the results
of such scams.
I have compiled a list of ten
leading financial scams in India, which have affected a large population of
investors, and involved huge sums of money. They managed to shake the very
foundations of our financial system, and were driven by that most basest of
human instincts – GREED. In most cases, it was the greed of just one
individual, or a very small group of individuals, who managed to pull of such
Insurance Scam –
This scam had originated and prospered in the period immediately following
Independence in 1947. At that time, the insurance sector was not nationalized,
and a handful of private companies ruled the roost. These companies were
more concerned with providing benefits to selected industrialists, and ignored
the interests of the common man. The government responded by nationalizing the
insurance sector, and the LIC was founded under an special Act passed by the
Parliament. This scam laid the foundation of the nationalization culture in
Securities Scam – Harshad Mehta – This is perhaps the most
well known of all financial scams – probably because it happened in a highly
visible period – economic reforms had just been started in 1991. Harshad Mehta
was quick to understand the weaknesses of the banking system, and exploited
these weaknesses to the hilt. He managed to procure huge amounts of money using
the so called “Ready Forward” deals, and used this money to purchase large
amounts of shares at hugely inflated prices. He earned the sobriquet of “Big
Bull” due to this penchant. Later, the banks got a clue of his shady deals, and
demanded their money back. The house of cards collapsed, and the rest, as they
say, is history!
CRB Scam –
This scam took place in the years 1992-1996, the period immediately following
the Harshad Mehta fallout. This makes the scam even all the more daring and
surprising. CR Bhansali, the perpetrator of this scam, floated more than 100
companies, such as CRB Mutual Funds and CRB Capital Markets. The primary
purpose of these companies was to attract huge funds from the public by
promising high rates of interest. This interest was later paid form further
borrowings, and so on. In 1995, the stock market collapsed, and this
proved to be the undoing of CR Bhansali. He was investigated, and later
arrested. After a brief 3-month stint in jail, he has disappeared without a
trace, and nobody is asking!
UTI Scam –
The UTI scam involved the flagship US-64 scheme of UTI, which was meant to
channel the funds of small investors into instruments bearing high returns.
Gradually, US-64 developed a investor base of around 2 crore investors. The
economic liberalization in India, coupled with the absolute opacity in the
operations of UTI, led to a situation wherein the Government was forced to
announce a huge bailout of about Rs 3,500-4,000 crores in an order to prevent
default in payments to the investors. The consequences of such a situation are
unimaginable. But the story does not end here. Later, it turned out that the
UTI Chairman appointed at this time, Mr P S Subramanyam, along with a couple of
executive directors, acted wrongly to selectively benefit a powerful coterie of
brokers and industrialists, while at the same time, jeopardizing the interest
of lakhs of small investors.
Home Trade –
Around the year 2000, a finance portal emerged on the financial landscape, and
gained quick recognition on the back of endorsements by personalities like
Hrithik Roshan, Sachin Tendulkar and Shahrukh Khan. The portal, owned by Sanjay
Agarwal, claimed to deal in gilts. Soon, RBI got suspicious of activities of
some cooperative banks in the gilt market, and a scam was uncovered. The same
old saga – brokers and bankers combining to rob people of their hard earnings –
was repeated. Funds from Seaman’s Provident Fund and PPF were affected. The
total scam size was reported to be around Rs 300 crores, and more than Rs 200
crores were spent on publicity costs alone.
Securities Scam – Ketan Parekh – That our system never learns
its lessons was proved by this scam. Ketan Parkekh, a qualified CA, and a stock
broker, identified a number of stocks (popularly called the K-10), and took up
huge positions in these. For this purpose, he used a large number of Benami
accounts and smaller stock exchanges, such as the Kolkata and Ahmedabad stock
exchanges. He also borrowed heavily from banks such as Global Trust Bank and
Madhavpura Mercantile Cooperative Bank. Unfortunately, he was stuck in a bear
cartel, and was soon pounded to pulp on the stock exchange. The extent of the
scam was estimated to be around Rs 1,500 crores.
Abdul Karim Telgi
Fake Stamp Papers –
This scam promised to be the mother of all scams in India, with the initial
reports quoting a figure of Rs 30,000 crores as the scam size. Later, RBI
clarified that this figure was “rather exaggerated”, and the “correct” figure
was around Rs 200 crores. Again, this scam exposes how the India system works –
Mr Abdul Karim Telgi, the scam kingpin, paid bribes to get access to the
security press in Nasik, where stamp papers and currency notes are printed. He
later used this knowledge to print fake stamp papers. At the height of the
scam, Telgi’s network spanned 14 states, 125 banks and more than 1,000
DSQ Software –
Though this scam was modest in terms of money involved (only Rs 600 crores!),
and did not affect the general public to a great extent, yet it is notable for
how it came into being. The main player in the scam was Mr Dinesh Dalmia, who
was the MD of DSQ Software Ltd. This company issued around 1.3 million shares
in 2001, and these shares were allotted to four companies on a preferential basis.
NSDL, a stock depository, dematerialized and helped in delivering the shares.
Nothing wrong in that, except that the shares were not even listed on any
stock exchange! Oops!
IPO Scam –
A number of key operators, including corporate stock brokers such as Karvy and
Indiabulls, were involved in the IPO scam that spanned the years 2004 – 2005.
The modus operandi was simple – the operators would open thousands of fake
accounts to purchase shares in IPOs, in the hope of selling later at huge
profits. A spate of IPOs issued during this period were heavily oversubscribed
due to this scam, sometimes by as much as 40 times!
On a cold January morning in 2009, Ramalinga Raju, chairman of Satyam Computer
Services, admitted to falsification in the company accounts and various other
irregularities, and sent a chill down the collective spine of the Indian
financial system. Coming on the back of the global recession, this incident
promised to bust the Indian outsourcing industry and the stock market, but for
some deft bailout work by the government. The matter is still under
investigation and litigation, and the true extent of the scam will be known in
the future, perhaps. Mr Raju himself had admitted to irregularities worth
around Rs 12,000 crores.
An analysis of the scams reveals a
common script – greed, corruption, unscrupulous brokers, colluding
bankers, irresponsible authorities and hapless investors, who refuse to learn
their lessons. But then, these are the essential ingredients of a worthy
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A brief about Top 10 Investment Scams in India
- The Securities Scam
The capital market witnessed its foremost investment scandal in the form
of securities scandal in the year 1992. It revealed the utter anarchy and
lack of administration in the prevailing fiscal market. The money market
at that time permitted funds to be relocated with impunity from financial
institution and corporates into equity and consequently witnessed crores
of bank's capital to transfer into brokers' account. This illegal market
practice was later asserted as "legal and acknowledged".
In an attempt to punish the tricksters, a special court was initiated and
scrutinized around 70 cases registered by CBI. Surprisingly, not even a
single trickster was found guilty by the dreadfully sluggish judicial
system. As a matter of fact, the scamsters made frequent attempts to
re-enter the market with same set of traps and resulted in losses to
- The IPO scam Soon after
the entry of international organizational investors, the Control over
Capital Issues was banned as the market saw heavy bull trend resulting in
the revitalization of the secondary market from the previous scandals. The
ban of Control over Capital Issues unlocked the prospects of massive
scandal in Initial Public Offerings (IPO). The scam was executed in two
parts; the first part was carried out by the firms that increased their
market costs to incur profits in order to sponsor lucrative projects. The
second part saw the unison of small time merchants, CAs, investment
bankers and traders to hoist new firms and heave public capitals.
The IPO scam prevailed for three long years from 1993-1996 and finally saw
its downfall when the costs of the registered firm started deteriorating.
- Favored share scam
The scandal was an outcome of the extensive cost fixing on the derivative
market. Besides increasing fresh capital, advocates of Indian firms
promptly coordinated general body authorizations to transfer shares to
themselves on a privileged basis and at a considerable reduction to the
market, thinking that the share prices would never see the ground.
Conglomerates started this trend and accrued profits of nearly 55o crores
until Securities and Exchange Board of India (SEBI) formulated strict
guidelines to abandon the market practice.
- CRB's cardboard scam
The Rs 1000 crore finacial multinational named as Chain Roop Bhansali
(CRB) was the only biggest firm and most impudent of all to benefit and
disappear in the loosened market ambiance of mid-1990s. The services
offered by his firm entailed FC collection, mutual fund, banking, etc. The
clearances obtained by the firm for the trading of these services required
sufficient inspection by SEBI and the RBI and the fact that they managed
to qualify shows the supervisory weariness of the regulators. Facilitated
by the clearances and profitable credit ranking, CRB accrued greater
profits based on high value financing. The CRB collapse not only affected
the investors but also the other finance firms.
- Plantation firms' scam
Since few firms in mid-90s were subject to no guidelines, the plantation
companies during that time also got away with profit protrusions. The
plantation firms projected themselves as a part of IPO and assured massive
returns. The investors were lured and the companies accrued profits from
fake campaigns of around Rs 8000 crores plus.
- Mutual Funds scam
After several mutual fund scams, the UTI bailout reflected the lack of
proper guidelines in the Indian capital market. Since UTI was initiated
under its own regulations, it was the tax payers who suffered the loss of
Rs 4800 crore in the process. After three years, the company was back
purchasing Ketan Parekh's controlled scrips and incurring massive losses
in the process. The evidence of the private mutual funds performance has
also been inconsistent after hitting the downfall in 1999 and 2000. It
took a considerable amount of time for capital market to win back the
trust of mutual fund investors.
- The 1998 scam
The scamster of 1992 scam, Harshad Mehta came back with a bag of tricks
again in 1998. This time he lured investors through a website by trading
stock tips. His unremitting manipulation of several shares resulted in the
much expected collapse of Bombay Stock Exchange.
- Home Trade scam
Initiated in 2000, Home trade invested rs 24 crore in promotional
campaigns to attract investors. The scam affected 8 co-operative banks
that lost Rs.82 Crore in EPF scheme. The Chief Executive of Hometrade, Mr.
Sanjay Aggarwal was convicted by Nagpur Police later.
- DSQ Software Scam
In the year 2000 and 2001, the Managing Director of DSQ Software, Mr.
Dinesh Dalmia, was held responsible for ambiguous mergers and prejudiced
allocation of the amount of upto Rs.595 Crores. He was later convicted in
the year 2006.
- Satyam Scam
After manipulating the firm's documents for several financial years, the
former Chairman and Chief Executive of Satyam Computers, Mr.Ramalinga
Raju, was arrested for committing scam, following unethical practice and
forgery. He showed greater profits and committed fraud of Rs 700 crores.
Shame! India sold
its dead cheap Shobhan Saxena,
Around 22,000 dead. More
than 1,20,000 injured. Rs 1 lakh for each
body. Rs 25,000 for every poisoned lung and damaged heart and blinded
eyes. 26 years of long wait. And just 2 years in jail for the men who
committed the worst crime against the people of this country. And this
mockery of justice after such a long wait. Twenty six years after 40
tonnes of lethal gas seeped into the lungs of Bhopal, families of some
17,000 men, women and children are still waiting for the so-called
compensation. Thousands more are still waiting to be accepted as
victims. People of Bhopal are
still drinking toxic water poisoned by
Union Carbide in December 1984. And the main culprit is living life
kingsize in a mansion in New York.
No country sells its
people so cheap.
No country sells its poor so cheap.
No country sells its dead so cheap.
Today – on the day
of Bhopal disaster judgment
-- if there is a failed
state in the world, it’s India. It’s not Iraq. It’s not Somalia.
not Sudan. It’s India.
India – its
government, judiciary and corporates – accepted the
ridiculous amount of $450 million dollars for the people killed and
maimed by methyl isocyanate leaked from the Union Carbide factory in
the heart of Bhopal three
decades ago. In all these years, the poor
victims have done everything they could to get justice and
compensation. They have cried and died on streets, sat hungry and
faced police lathis on roads and filed court cases in the hope that
one day they will get justice.
Today, they were denied
justice. Today, they were told that they
should be happy with the peanuts thrown at them by Union Carbide.
Today, India proved once again that it doesn’t care for its poor.
Today, it was proved all over again that those who do politics in the
name of poor in this country, always rule for the rich.
What justification does
CBI have for not being able to produce Warren
Anderson in court. The chairman of UC at the time of the gas attack
(it was not an accident, the gas leak was caused because of cost-
cutting steps taken by him) on the people of Bhopal, Anderson was
arrested and later released on bail. He ran off to US in 1986 and we
have not been able to find him or ask the US to
extradite Anderson to
India. Why? The government says it doesn’t know where Anderson is.
What a lie. What a shame.
Last year, on a balmy
July day, a bunch of victims danced on the
streets after hearing news that the Chief Judicial Magistrate of
Bhopal had ordered the CBI to
arrest Anderson and produce him before
the court without delay. The court also asked the CBI to explain what
steps it had taken since 2002 to enforce the warrant and extradition
of Anderson, who was declared an absconder in 1992. Though the CBI and
US government failed to track Anderson, supporters of Bhopal victims
traced him to the elite New York neighbourhood of the Hamptons.
2003, Greenpeace activists paid Anderson a visit at his home and
handed him an arrest warrant.
judgment in Bhopal didn’t say
anything on Anderson
as he is a “proclaimed offender”. This status suits him fine because
he doesn’t have to bother about coming to India and answer some very
*Why did Union
Carbide not apply the same safety standards at its
plant in India as it operated at a sister plant in West
*On the night of the
disaster, why did the six safety measures
designed to prevent a gas leak fail to function?
*Why was the safety
siren, intended to alert the people living close
to the factory, turned off?
The victims have always
alleged that Bhopal happened
negligence by the Union Carbide and that was caused by cost-cutting
measures taken by Anderson. Is it because of this reason
has been 'hiding' in the US?
A criminal has a reason
to hide, but what reason does our government
have to let a mass murderer like Anderson go scot-free. Is it because
he is an American? Can an American come to India kill people in this
country and run away with no consequences? That seems to be the case.
We are still struggling to get a chance to question David Headley
Coleman, an American citizen responsible for the worst terror attack
on an Indian city in 2008. Will we succeed in getting Headley
extradited to India? No way. Never.
Today, India proved
that it doesn’t really care for its people,
particularly if they have been slaughtered by powerful people from the
most powerful nation in the world. Instead of taking on America and
fighting for justice for its poor, India is more than happy to sell
its dead cheap.
Rs 1 lakh for every body.
Rs 25,000 for every blinded eye. This is the
cost of poor life in a failed state.
BP and Union Carbide:
Corporate Responsibility or Corporate Liability
Two momentous events
separate in time and location have seared our consciousness—the British
(Beyond) Petroleum Gulf Coast oil spill on April 20, 2010 and the American
Union Carbide Bhopal Gas Tragedy in December 3, 1984. Twenty five years
separate these two environmental and human disasters but the greed of big
multinational corporations in connivance with state and central agencies still
remains insatiable. With a keen eye on profit, big companies compromise safety
standards, falsify data, overstate their strength, underestimate their
drawbacks, bribe officials, lobby for protection and misinform the public. It
is rather difficult to fuse ethical economic standards with ravenous
profit-making schemes. Though oil and gas stink most multinational corporations
The neo-classical model
of economics has reduced our land and environment to a mere abstraction that
can be exploited in terms of supply and demand without compunction. Big
companies continue to wreck havoc on our human and natural systems devastating
our lives in the name of human progress and development. At such moments we
often wonder where is the fashionable concept called social corporate
responsibility that is often taught as a philanthropic and ethical tool in
business management departments to unsuspecting students. Corporate greed like
all other forms of human greed need to be kept under strict check by
international pay czars or up-to-date legislation based on global standards
with teeth for swift punishment. Also the rhetoric of corporate companies must
be separated from what they actually do, how long they do what they do, and
what they hide. A constant monitoring system both on the part of governments
and private groups must be effectively installed in collaboration with the
media to thwart their nefarious activities and ulterior motives.
Carbide Bhopal Gas Tragedy 1984
Early this month the Indian Supreme Court passed a verdict indicting the
American CEO of Union Carbide Warren Anderson who was allowed to escape to the
United States twenty five years ago possibly with the connivance of either the
state or central agencies in India. Now both the Congress government and state
ministries are trying to escape their involvement in the murky plot. Who wanted
the truth then? And who wants the truth now? The declassified CIA report of
December 8, 1984 and recent revelations by the principal secretary of Rajiv
Gandhi, P. C. Alexander, point to political intrigue involving both state and
center in releasing Anderson. Now some leaders claim that the worsening law and
order situation in Bhopal in the wake of the accident forced Chief Minister
Arjun Singh to provide a safe corridor to Anderson out of the country. Some
like Rajinder Puri even
see the direct hand of Rajeev Gandhi himself. It seems that US President Ronald
Reagan phoned Rajeev Gandhi to release Anderson. The media would like us to
believe that even P. Chidambaram and Kamal Nath were campaigning for Dow
Chemical to get special concessions so it could invest in India. The chief
minister of Gujarat Narendra Modi criticized Sonia Gandhi for the complicity of
the Congress Party in the murky affair but it has come to light that he had
signed an MOU between state public sector company Gujarat Alkalies and
Chemicals Ltd and Dow Chemicals in April 2008. This is the case of the pot
calling the kettle black.
Seemingly neither the American nor the Indian establishments saw the industrial
disaster as the responsibility of the MNC Union Carbide. The company was bought
by Dow Chemical Company in 1999 further camouflaging accountability. Dow
Chemical was the second biggest Texas polluting company in 2009 and paid 1.14
million USD on eight counts of pollution. Now it is investing again in India
with the syrupy connivance of people in power.
Even after 25 years the public would like to know if it was Arjun Singh the
chief minister of Madhya Pradesh or influential persons in Rajiv Gandhi’s
government at the center or the prime minister himself responsible for giving a
free passage to Anderson to fly back to the U.S. India has an extradition
treaty with the United States and under changed circumstances today when
America itself is suffering from another MNC BP, there might be possibility of
bringing the fugitive CEO back to justice if India can put together enough
evidence. Greenpeace believes that in the 1982 safety audit of the Bhopal
factory in the US addressed thirty safety hazards. Anderson knew about them and
compromised safety standards causing the death of 20,000 people and affecting
578,000 to date. To make the tragedy reprehensible the out of court settlement
made Union Carbide pay a sum of 470 million USD instead of 3.5 billion
initially demanded, with each victim getting a measly sum of 550 USD in 1989.
In the same year Exxon oil spill in Prince William Sound Alaska forced the
company to pay 5 billion USD of which it paid half. Even today there is 425
tons of hazardous waste in Bhopal left by Union Carbide that needs to be
cleaned. Who will do it—Dow Chemical or the Indian state government?
Anderson now 90 years lives in a luxury home worth 900,000 USD at 929 Ocean
Road, Bridgehampton, Long Island, New York. He is now less of a fugitive and
more of a monarch (Sonnenfeld, 1991). It is obvious that in many cases justice
delayed is justice denied. Should we stop big companies from doing business?
Should we impose heavy penalty on erring foreign companies? Or should we reform
the slow and cumbrous judicial system? Jeremy Kahn writing in The Faster Times calls for judicial
reform rather than protectionism (Kahn, 2010). The Indian Parliament is
debating a law capping liability for foreign nuclear power companies involved
in disasters to pay 100 million USD a pittance when compared to the US demand
of 100 billion USD from BP. Then Indian law capping liability lacks teeth and
may not cover non-nuclear companies. So they can pollute as of before.
or Beyond Petroleum
The British are desperate to save BP from going down by bringing silly
arguments like BP has been a part of America since it merged with American
energy Amoco in 1998 and acquired the Gulf of Mexico drilling rights (The Independent, “Cameron Warns Obama
over Criticizing BP” 13 June 2010). The new British Prime Minister David
Cameron has also chipped in underscoring the sustained “economic importance” of
BP to both Britain and America. American President Barrack Obama however is
needled by US senators, whose states have been ravaged by oil spills, to push
for 100 billion USD compensation, which if realized would force BP to go
bankrupt. The British media believes that Obama’s anti-British rhetoric is
testing Anglo-American relations. Obama claims that American relation with
Britain has not been affected. The environmental disaster caused by a British
multinational company should have nothing to do with national identity but
corporate liability. Obama has called BP the Swedish Chairman Carl-Henric
Svanberg, who earns a fat cat salary of 3.8 million USD, to the White House for
The British are cut up with Obama’s off the cuff remark that he would have
fired BP’s chief executive Tony Hayward if the latter had worked for him. With
US pressure rising BP may not pay its quarterly dividends which are essential
to maintain equilibrium for UK pension funds. The 6.7% shares lunge in the FTSE
has adversely affected pension funds in the UK. If the status quo is not
altered by American pressure groups BP might only have to pay 20 to 37 billion
USD provided it can be proved that BP failed to meet safety regulations in the
deep sea oil drilling.
Now BP is using two kinds of dispersants manufactured by Nalco—Corexit 9500 and
Corexit EC 9527A. Corexit (deodorized kerosene) is banned in the United Kingdom
as even 2.61 ppm can kill 50% of fish in 96 hours. The dispersants turn the oil
slick into small particulates which settle on the sea bed and make things look
clean on the surface, but they destroy marine life below. Corexit however is on
the approved list of dispersants by the US Environmental Protection Agency
though the EPA has advised BP to use less toxic dispersants. BP however refused
citing lack of availability. The toxicity of the present dispersants increase
when they get mixed with oil. BP has links with Nalco. BPs has poured 1,621,000
gallons of dispersants in the Gulf of Mexico to contain the oil spill and has
ordered for an additional 805,000 gallons. The ill effects of the dispersant on
humans can result in various diseases, reduced growth, kidney failure and
The British rely on BP as the national icon and savior of British deficit. Last
year BP paid 1.4 billion dollars in taxes on its profits. The oil spill in the
Gulf of Mexico is too far away for the ordinary Britons but the pension funds
and BP dividends are closer home.
It stands to logic that a “large, wealthy company” which is eager to pay 1.8
billion quarterly dividends to its shareholders and whose last year’s sales and
operating revenues were 239 billion USD, should pay 100 billion USD in damages.
Since the oil spill began on April 22, 2010 till June 15, 2010, 55 days have gone
by. And if we estimate the oil spill at 50,000 barrels a day it comes to
27500000 gallons. If each gallon spill is fined 4300 USD as the US is
suggesting the actual fine would come to 118,250,000,000 that is about 118
billion USD. These figures may not be exact and are vigorously contested by BP
which would like to work with half the numbers. However the end is not in
sight. According to BP officials it would not be before August that the spill
can be contained. If this is true then the figure could be doubled and BP would
have to pay damages amounting to all the revenue it earned through sales last
Both the American government and public are hopeful that since earlier erring
companies like Texaco was forced into bankruptcy in 1987 after paying 10.53
billion USD claim, BP too would have to cough up huge sums. And BP’s reputation
does not help a wee bit whatever they claim to the contrary in those daily
briefings on the Internet. BP is known as one of the “ten worst corporations”
in the world when evaluated on their environmental pollution and infringement
of their human rights record. It also has the dubious distinction of being the
most polluting company in the United States vis-à-vis EPA toxic release data of
1991. It has been fined 1.7 million USD for burning polluted gases at its Ohio
refinery. It also paid 10 million USD fine to the EPA in July 2000 for
mismanaging the US oil refineries. The US Public Interest Research Group or
PIRG claims that between Jan 1997 and March 1998, BP was involved in 104 oil
spills. Obviously a lot of wealthy shareholders, 37% on the British and 31 % on
the American side do not want this to happen.
BP’s propaganda regarding its CSR is highly effective as it tries to highlight
only the positive aspects of what it has done. In the past BP has invested some
money in alternate fuel and green technologies but it has been criticized for
proving private funds to public universities of the California Bay Area and
closing down its green technology office in London. Its critics call its green
technology projects as green washing projects. BP is also a leading producer of
solar panels and holds 20% of the global market in this area and it uses this
fact to great advantage for image building. It operates the ampm convenience
store chain in the US and other countries and is the leading producer of wind
power. It is also involved in funding local and international politics. It gave
5 million USD to democrats and republicans in 1990 and spent 16 million USD in
lobbing at the US Congress. The moral of the story is that it is not as clean
as it claims, nor concerned with the lives of common people unless it serves
its purpose or national interest.
BP in its regional spill plan for the Gulf of Mexico and site plan for the
Deepwater Horizon rig understated the dangers and overstated its preparedness
in the eventuality of a leak. Louisiana governor Bobby Jindal criticized BP for
being ‘reactive’ and not ‘proactive’ from the very beginning. Now BP’s report
is examined quite critically and it has been discovered that an expert
professor listed in its 2009 response plan died in 2005. It lists walruses, sea
otters, sea lions and seals as “sensitive biological resources” when none
inhabit the Gulf of Mexico. Also names and phone numbers of marine specialists
and marine network officers in Louisiana and Florida are not correct. The
Justice Department has to find evidence that BP destroyed key documents or lied
to the government (The Daily Yomiuri, June 11, 2010).
Corporate social responsibility is one of the modern movements like
environmental or tribal movements that have become the buzz word in both
business and academic circles. Both businessmen and academics are cashing upon
the divine benefits of CSR making more money for their companies and jobs for
their departments. Middle level managers and professors have extolled about the
virtues of CSR with other buzz words such as people friendly, eco friendly and
sustainable. We have come to hear about the unselfishly egalitarian aspects of
CSR. It is really a wondrous transformation of the greed-driven capitalist
economy of which the corporate system is a byproduct.
Most critics of CSR are not against it per se but against the recent hype
associated with it as a panacea of all corporate evils. It is hard to believe
that companies are out there not to make profit. We are not talking of basket
cases but any company worth its salt aggressively markets itself to make real
profit. And what’s wrong in it. Companies are floated for this very purpose
both by the shareholders and managers. But in a changed climate of political
advocacy of human rights against corporate greed, CSR seems to a new combative
tool for companies to be both politically correct and make money as usual. The
problem however is that if business corporations give an inch they take a mile.
and Objections to CSR
In the United States CSR is seen as philanthropy while others see it as
improving society, workforce and government. There are arguments in favor of
CSR where it is believed that it can support the social fabric of society and
promote responsible business practices. But CSR is usually presented as a
marketing strategy that articulates business performance rather than encompass
social and ethical standards. The recent collapse of American business and
manufacturing sectors has revealed the gap between CSR and actual
self-regulation. Some CSR models take the company beyond the law into providing
public benefits, increase sales, market shares, brand position, retain
employees, reduce operating costs and increase investments (Baron, 2001 7-45).
There are models of CSR that take into account competitive advantage,
positioning, commitment, organizational integration, shareholder’s cooperation
and self-correction. CSR helps to create a positive image of a company and
brings it rich dividends. Though there are many definitions of CSR we must see
CSR as the way business companies conduct their core business not the sops they
give to society.
A common objection leveled against CSR comes from the advocates of the laissez
faire system who complain that CSR infringes upon the human rights of company
shareholders as company managers unilaterally divert company resources to
society in the name of better management (Sternberg, 1999). Detractors of CSR
complain that there should be a stakeholder claim in CSR as to how it is done.
A business corporation should be fair and honest to both the shareholders and
customers. CSR therefore depends on the model a company chooses and the reasons
for its choice. If a company uses CSR for image building through philanthropy
it leads to both ethical and human rights problems. You cannot give away money
which ultimately belongs to someone else. On the flipside it also follows that
if stakeholders possess sole rights they also should bear full responsibility
when there are environmental or social disasters. However if a CSR model seeks
a consensus of both stakeholders and company managers then it must become more
open to the public. CSR must concentrate upon building customer relationships,
attracting talented people, conducting risk management and building the
Reputation and CSR
Corporate business companies such as BP or Coca Cola cannot ignore their
reputation as about 90 to 95 percent of their assets are intangibles and the
remainder immovable property. Big companies such as General Electric, IBM or
Motorola use the rhetoric of CSR to show public responsibility and
environmental concerns but while conducting hard-nosed bullying business
practices are not so transparent in their dealings. A few years ago Sir John
Browne of BP was praised for his aggressive promotion of BP while providing environmental
leadership but now we come to know that all along BP compromised on safety
costs in oil drilling. This is happening in a powerful country like the United
States where both politics and laws are strong. Had it happened in a developing
or a poor country, things would have been quite different. BP would have gotten
away cheaply and Union Carbide once did.
CSR invariably works for companies and countries with resources and political
clout. It is not for companies which are small and weak. Small companies fight
for survival, cut costs to make ends meet and do not possess precious resources
to waste on CSR. Nor can they follow up on legal battles if they come under the
scanner. They function in a world of poverty, deprivation and loss.
It is no longer tenable to follow neo-classical economics of Smith, Mill and
Bacon that the world is made for us and for us alone. We must eschew the
economic theories of Pareto and Hayek as we can no longer treat nature as a
mere variable and commodity. Depreciation of ecological assets has taken place
at an increasing fast rate. Economics should no longer be about inflation,
economic value of goods or maximization of income. It should take into account
our natural world as property that belongs to every one of us (McNeill, Padua,
Rangarajan, 2010 1-3). We must learn new lessons from ecological economics and
environmental history and change the way we do business. We must rein in
corporate greed by modifying corporate social responsibility (CSR) to corporate
legal liability (CLL) and connect it to governmental deterrence, legal action
and international treaties to scare the hell out of the merchants of greed and
death who have many supporters in different parts of the world.
ARE YOU SINCERELY READY TO CATCH TAX THEIVES ?
- AN APPEL TO UNION FINANCE MINISTER & KARNATAKA STATE FINANCE MINISTER
In india , tax compliance is worse. In our criminal justice system, there is
rigorous imprisonment for a pick-pocketer stealing Rs.10. even the authorities
spend thousands of rupees in legally prosecuting him & the thief spends a
year or more as punishment behind bars. Where as there is no commensurate
investigation nor legal prosecution nor punishment for corporate thieves ,
evading tax to the tune of crores of rupees. In contrast, those tax thieves pay
a part of that booty to the ministers & political parties and get crores of
rupees tax exemptions , incentives from the government. Government is rewarding
The tax officials of central & state governments are hand in glove with
these corporate criminals & traders. For a price, they are helping
corporates & traders in evading tax. Most of the tax officials are wealthy
& leading luxurious lifestyles , much beyond the scope of their legal income.
The black money thus generated every year by tax evasion , is many times more
than our total annual budget allocation. As a result, all our fiscal reforms
fail & inflation is soaring. This black money is the source of illegal
funding of political parties , terrorist outfits & underworld. It is a
greater threat to national unity & integrity.
Both the central government & karnataka state government have failed to
collect the full , actual tax dues from corporates & traders. As a result ,
the governments don't have enough money in their coffers even to provide basic
needs like health care , education , safe drinking water , etc to the poor
& needy. For every Rs.100 tax evaded , one poor patient is dying without
medical care , 10 poor persons lack education , 100 persons don't get safe
drinking water , 100 persons barely survive on a single piece meal per day , 20
persons starve. Most of The government officials , ministers & people's
representatives who have deliberately failed in their duties of tax collection &
welfare of poor citizens , SHAMELESSLY indulge in luxurious lifestyle at the
expense of poor tax payer . they live in paltial bungalows , chauffer driven AC
cars , all living food expenses paid by exchequer , dine at 5-star hotels ,
only drink bottled mineral water , eat non-vegetarian dishes , drink alcohol
sitting before mahatma gandhi's photograph & preaching mahatma's ideals.
Mahatma preached & practiced simple living , vegetarianism & he was
teto teller , he paid for his expenses from his earnings . these public
servants are parasites , who are making merry at the expense of tax payer.
Some non government organisations ( NGO) have formed trusts and under the aegis
of those trusts are running educational institutions , hospitals , community
halls , etc , in the name of providing free / subsidised services like
education , health care , etc to the poor. It is only in record books , they
conduct fake medical camps , self employment training camps . in practice they
are running these educational institutions , hospitals & community halls as
commercial enterprises & collecting huge fees. they are not even remitting
full fees collected to the trust account & swindling the money. no outsider
is allowed to become a member of these NGOs , only their cronies & their family
members are in these trusts.
Numerous NGOs promoted by religious bodies , mutts are swindling public &
government money to the tune of crores of rupees. Nobody dares to question the
heads , pontiffs of these mutts , as at his feet VVIPs , ministers fall down.
These religious bodies are hot beds of fundamentalism , terrorism & mafia.
Hwere is the accountability of religious bodies & political parties in in
Inspite of bringing specific cases to the notice of authorities , they are mum
? hereby , HUMAN RIGHTS WATCH offers it's services ( subject to
conditions ) to the governments of india & karnataka , in
apprehending the criminals – tax evaders. Are you ready Mr. Mukherjee
& Mr.Gowda ?
QUESTIONS FOR MONEY – PARLIAMENTARY
-improper functioning of democracy in india
the vohra committee report has
proved the criminalisation of politics in india. There are many number of
criminals in the parliament & state legislatures. Some of those criminals
are cabinet ministers as well as members of vital parliamentary committees.
Thereby, they are in a position to manipulate , enact laws favouring ,
benefitting the criminals their cronies.
Just see how the GOI gave export incentive of Rs.1800 crore to reliance
petroleum although it didn't even export a barrel. Reliance infocom & tata
teleservices were CDMA mobile service providers & have paid license fee of
few crores only equal to landline fees without any competitive bidding . They
were supposed to provide mobile service to operate like fixed phones within a
radius of 40k.m. however they were providing service like mobile service from
one state to another like GSM mobile service providers. By this act of RIC
& TTSL , the GSM providers who have paid thousands of license fee in
competitive bidding were economically hurt , the dispute went to court. The
court was on the verge of pronouncing it's verdict awarding damages worth
Rs.18000 crore to GSM players & Rs. 3000 crore of license fees with penalty
to GOI. The government announced a unified telecom license regime with
retrospective effect. Thereby, the GOI lost thousands of crores of rupees &
the share holders of GSM players lost thousands of crores. Onceagain the RIC
was charged by PSU bsnl THAT RELIANCE IS RE-ROUTING INTERNATIONAL CALLS AS
LOCAL CALLS & SWINDLING THE GOI. This time too, GOI bailed it out. during
the dispute between ambani brothers the younger ambani mr. Anil ambani director
of reliance himself has stated that for the favours received from the GOI , the
company gifted some shares to then IT & COMMUNICATIONS MINISTER mr. Pramod
Various indian & multinational companies are looting indian exchequer to
the tune of thousands of crores of rupees , through lobbying / bribing.
In india, indirect democracy is the form of governance. In this form, people's
representatives are bound to raise the questions , issues concerning their
constituents on their behalf , on the floor of the house. However the sad part
in india even after 58 years of democracy , is the lobbying is at it's peak.
The lobbying is a gentleman's white collared crook's way of forming favour
seeker's group , creating a corpus to pay lumpsum bribe & influencing
decision making. The people's representatives are bound to represent their
people first , then their party & party think tanks. India has come to this
sorry state of affairs , widespread corruption , huge black economy &
rampant poverty, all due to inefficient legislations & enforcements. These
think tanks & IAS lobby, consider themselves as most super brains on earth
& gives out suggestions . the present state of affairs is a barometer of
their brilliance. These think tanks & IAS lobby are the hand maidens of
lobbyists / bribers.
By Ashutosh Sinha
Special to India Resource Center
September 30, 2002
Not many in India might have
actually seen the field gun from Bofors AB, either standing sentinel on the
borders or in operation. The guns played a key role in the skirmishes at Kargil
in 1999. The same anonymity does not hold good for Xerox, which has now entered
the dictionary as a verb in its own right for photocopying documents.
Since its name has become synonymous
with the allegations of kickbacks, few companies would like to be compared with
Bofors. But since the deal was a big commercial success for arms dealers, some
companies would, perhaps, be tempted to employ the same tactics as the Bofors
The Swedish firm Bofors AB allegedly
paid Rs.640 million ($13 million) in bribes to middlemen to get the contracts
for the deal signed in 1986. Nearly a decade later, Enron India spent US$ 20
million in "educating" Indian bureaucrats about the role of private
companies in power generation, an euphemism for bribes. Two telecom companies,
Essar and Swisscom, were alleged to have paid a former minister, Sukh Ram, a
hefty amount during early 1996 to help change the original license conditions,
which it had signed with the Department of Telecommunications. There was no
case against Sukh Ram, simply because this deal was never investigated.
Significantly, none of the
allegations made above have yet been proven in a court of law.
Xerox India was treading on familiar
path, something which its US headquarters got to know later. According to the
parent company's own admission, which emerged during its audit, it paid over
$600,000 as bribes to various government employees to win contracts. In
essence, the modus operandi was just a 'photocopy' of the way some other
Under the Foreign Corrupt Practices
Act (FCPA), it is a serious criminal offence for a US company to pay bribes in
a foreign country to obtain contracts. Being managed by the BK Modi group, one
of Indias oldest family run business empires, at the time when the bribes were
paid, it is now like a sword hanging at the neck of Xerox. The BK Modi group
has denied having paid any bribes. Xerox Modicorp Limited (as the company is
now called) completes 19 years in India this September. It changed its name
from Modi Xerox Limited to Xerox Modicorp Limited in 2000.
The Indian government was quick to
order an inquiry. A promise that accompanied the order was that the inquiry
would be completed in two weeks. Over a month later, the two weeks are not yet
over. Now, the million-dollar question - for a company that calls itself 'The
Document Company' - is there enough documentary evidence to prosecute the
The Department of Company Affairs
(DCA), the arm of the government that wields the stick to ensure that companies
meet their stated objectives and do not dupe the shareholders, is looking into
the details. Xerox was not duping shareholders, much the same way as the
military hardware company AB Bofors. Both were, in fact, trying to reward their
shareholders by giving the extra edge to their sales team by "taking
care" of those taking a final decision on the purchase of their products.
DCA is still not sure whether the bribes were actually paid or if the amount
was pocketed by Modi or his men.
There is a stark difference between
the two cases, though. Bofors is a European company, Xerox an American. Their
products are proverbially as different as chalk and cheese - one sold military
hardware, the other office automation products. While the Bofors payoffs
involved the government official right at the top in the government, the Xerox
payoffs appear to have been made to the operations level people in government.
Besides, the nature of arms deals is such that the best deal has to be sewn in
one shot. Office automation products are regularly purchased by companies and
governments. So, if a few people can be identified, their palms can be greased
regularly to put the product. The agents who helped Bofors are still trying to
block investigations and any information into their money laundering. The
amount involved in the Xerox case is far smaller.
Xerox, however, does deserve a pat
on the back for having the courage to admit the payoffs in public.
There are some parallels between the
two companies. Bofors money found its way to exotic places that you would find
difficult to locate on the world map - Luxembourg, Bahamas, Liechtenstein,
Channel Islands. The Xerox India payoffs did not have such exotic addresses.
Two of the companies to which payments were made had slum areas of Delhi as
their addresses while two others were located in the western Indian state of
While the Bofors deal had strong
political linkages, there is talk of the involvement of a Samajwadi Party
politician, who has interests in the paper business, in the Xerox case. That
allegation is yet to be probed, though.
AE Services, Svenska, Lotus, Tulip
and Mont Blanc are some of the names of bank accounts that are associated with the
alleged Bofors payoffs. The money has gone into a variety of accounts before
disappearing various pockets. Officials of the Central Bureau of Investigation
(CBI), India's premier investigating agency, suspect that these people include
the late Win Chadha, an Italian called Ottavio Quattrochchi and the Hinduja
brothers. If the Xerox India deal had been bigger, with international
ramifications, it would not have chosen names like Charu Paper Ltd., Chadha
Paper Ltd., Pioneer Enterprises and Elite Commercial Services.
At the time when these bribes were
paid, the company was controlled by the BK Modi group, which owned majority
shares in the joint venture. When Xerox acquired control of the company (it now
owns 68 per cent while BK Modi controls 28 per cent in the joint venture) in
2000, it ordered an inspection of the books by the audit firm
PriceWaterhouseCoopers, which raised disturbing questions. The audit firm said
that it was not sure the organizations existed and, if they did, who owns or
controls them. BK Modi Group has interests in telecom, entertainment and
Xerox has over 50 per cent market
share in photocopiers in India. 1998 was a landmark year for the photocopier
industry. Of the estimated 40,000 machines sold that year, an estimated 27,000
were Xerox machines. However, that was an aberration and nearly 30,000 machines
are sold in the market each year at present. Nearly 60 per cent of the sales
are made to government organisations.
Incidentally, the bribes are alleged
to have been paid in 1998 and 1999. In 1998, the 15-year tie-up between Modis
and Xerox ended. Xerox had entered India after a tie up with the BK Modi Group
and Modi Xerox Limited was incorporated in 1983.
The Joint Parliamentary Committee
(JPC), which had looked into the Bofors deal before CBI started its
investigations of bribery charges, had similarly not given a clean chit to the
Rajiv Gandhi government. The government survived the day but since then, the
Congress party has never won a majority in the Indian Parliament. Bofors has
also entered India's political lexicon as a synonym for bribery.
DCA officials are tight-lipped about
the direction in which their Xerox investigation is meandering. These are just
four names that have tumbled out of the closet. Reports suggest that it is a
web of 85 companies through which payments have been made. The challenge before
DCA is to verify whether payments were made to individuals in the government or
did some officials of Modi Xerox (as the company was then called) pocket the money.
While it is still to be established
where the money actually went, DCA officials admit in private that siphoning
money out of the company is a routine affair. Just like every official worth
his salt in the CBI knows that big arms deals do have an element of an
Since payoffs are now a part of
business, this is where the interest of the average person comes in. Hapless
investors have seen scores of cases where the companies get sick and promoters
healthier by the day.
For all the arms deal that have
happened in India, whose defence spending is over US$ 14 billion every year,
only one case has been brought to light. None have been prosecuted. Of nearly
7,000 publicly listed companies in India, a little over 2,000 actively trade on
the Bombay Stock Exchange. The rest are companies which have turned sick, while
some of their promoters get healthier.
Radia lobbied to get Raja telecom
Union Communications Minister A.
Raja has been caught on tape lobbying with a corporate PR agent for a place in
the Manmohan Singh cabinet during the second term of the UPA.
Headlines Today is in exclusive possession of taped conversations
between Raja and powerful corporate lobbyist Nira Radia just days before the
swearing-in of the cabinet.
The conversations, which were recorded by investigators for the income tax
department, raise serious issues about ministerial propriety.
The income tax sleuths had sought permission to tap the telephone of Radia, who
was being investigated by the CBI and the income tax department in the telecom
Radia is one of India's most influential power-brokers and has the biggest
corporates of India as clients.
These conversations were recorded over 300 days, starting from August 20, 2008.
Raja was lobbying hard to become the next telecom minister and was being helped
in this endeavour by Radia.
Here are excerpts from a conversation recorded on May 24, 2009 at 11.05
Raja: My name is cleared?
Radia: Yeah, your case was cleared last night itself. No, what is happening
Raja: Textiles or fertilisers?
Radia: Not for Daya though, Azhagiri or Daya only one can come in?
Raja: No, two can come...
Radia: Baalu, will be the problem, I hope.
Radia: It will be difficult for the leader to justify three family members.
Raja: (laughs) Yeah, but everybody knows...
Radia: No she said that, Kani told me last night, that is what her father told
her yesterday, that for him to justify three family members would be very
difficult; he recognises that problem...
Raja: Let us see what we can do...let us fight.
This was how Radia informed Raja that his name had been cleared for the telecom
minister's post. The conversation had been recorded just four days before
Raja's name was officially announced as the UPA's telecom minister.
So how does a corporate lobbyist get to know who is getting which portfolio?
And why was Raja discussing portfolios with a corporate lobbyist?
Not just Raja, the tapes have Radia talking to DMK chief M. Karunanidhi's
daughter Kanimozhi as well.
In these conversations, Kanimozhi - referred to as Kani - is heard telling
Radia that the DMK must get the telecom portfolio. Here are excerpts from the
conversation recorded on May 21, 2009 at 8:41 pm.
Radia: PM has already clarified that the deal has not been done. They are still
in the middle of discussing it.
Kani: They've already promised to give us telecom...but it cannot become that
Kani: They have already told us that they will give us telecom. Now it
shouldn't be given to him because he's going around planting stories.
Radia: He's planting it on all the channels while you were on the plane.
Kani: Ya I know that.
Radia: But Kanni, the PM has just made a statement that I have no problems with
Raja and Baalu and they are my esteemed colleagues.
Kani: He can make a statement. But whoever's going to come and talk to dad
shouldn't talk otherwise.. See what people say outside and what actually they
mean is different... And all of us know that in politics.
Not just telecom, Radia and Kanimozhi had a long conversation about who is
getting what portfolio. What was surprising is that Radia seemed to know
exactly what is happening and who was getting which portfolio.
Here are more excerpts from the conversations:
Radia: Kani there's feedback from the Congress. They say we recognise that the
problem with the DMK is an internal problem. It's a problem between the family.
It's a problem between their own people. They have given us a list of five
people. This is not acceptable to us.
Radia: It is for them to resolve. We have told them what is the best that we
Kani: Three and four...
Radia: We appreciate that the dialogue has broken down but it is not for us to
get back to them. As far as we are concerned, Maran has been calling Ghulam
Nabi Azad on the half hour demanding all sorts of things and they have told him
that there is no point in you calling us.
Kani: But what is the demand he's got.
Radia: He has been making the same demands that you give us five portfolios or
we will not join or give us railways, otherwise he has also demanded coal and
mines. So they are saying as far as we are concerned this is an internal DMK
problem. It has nothing to do with the Congress at all. They have taken a decision
that it is for Karuna to decide who he wants and who he doesn't want in the
formula. That has been provided to him. It's up to Karuna to decide but they
feel that there are far too many people calling him including Maran.
The question is, is it proper for a senior leader of the DMK and a minister in
the past UPA government to be talking to a known corporate lobbyist? Why is it
that the lobbyist seems to know everything about the allocation of portfolios,
and long before the information is made public?
REAL STORY OF
Late DHIRUBHAI AMBANI of Reliance
Major Scam : Govt. Favours Reliance In KG Basin
The CAG draft
report that nails the connivance between Government agencies
and Reliance Industries Ltd. leading to huge losses to the Government exchequer
is yet another example of the power of corporates in the UPA Government to
subvert rules and regulations in their favour.
The CAG has noted
that the former Director-General of Hydrocarbons (DGH) permitted Reliance to
inflate its “development costs” on the gas extraction in the D6 block of KG
basin from 2.47 billion dollars to a whopping 8.84 billion dollars. This money
taken by RIL affected the revenues of the Government. Government should
prosecute the former DGH without any delay.
connivance with RIL has a direct impact on the aam aadmi because increased
claims of development cost get reflected in the price of gas given to consumers
and also affect the prices of fertilizer and power. Letters have been
written to the Prime Minister to institute an independent enquiry into the
complaint of artificial jacking up of the capital expenditure by RIL for D6 KG
Basin and its hasty approval by the concerned authority to find out the actual
cost before gas price is fixed.
In a repeat of the
2-G scam, the Prime Minister’s silence on the issue, has again exposed
the UPA Government’s acquiescence to corporate manipulation.
- The Great Billion Dollar Drug Scam
- Supreme Snub : Court SIT A
Major Embarrassment For Govt
- Now A Petroleum Scam?
- The -Reliance KG Gas Scam
Prabir Purkayastha, Newsclick
- Way to Rural Self
Reliance: National Rural Livelihoods Mission (NRLM)
- Demand For JPC On Spectrum
Scam :Go Beyond Rhetoric
- THE ADARSH SOCIETY SCAM A
Shocking Exposure of Congress govt Venality – Ashok Dhawale
- SUPREME COURT VERDICT ON
KG BASIN GAS -Dipankar Mukherjee
- AMBANIS ROW : GOVT HAS
LAST WORD ON KG BASIN GAS PRICE : SC
- POOL PRICING FOR KG BASIN
GAS TO HARM ANDHRA PRADESH INTERESTS
- PRODUCTION OF GAS IN KG BASIN
- FINDINGS OF ICAI IN SATYAM SCAM CASE
RELIANCE INDUSTRIES LIMITED - WHERE
Dear mukesh & anil ambani,
The reliance industries has always got a favourable treatment from the state
& central governments.there are allegations that ,
1.years ago, the central government gave import concessions for import of certain
raw materials of textile sector ,which hugely benefitted the P.F.Y &
TEXTILE projects of your's ie reliance industries.
2.the O.N.G.C which has painstakingly surveyed the oil & gas reserves &
prepared a list of lists,gave that list & you got godavari basin oil &
gas project from the government .O.N.G.C could have developed it & earned
3.few months back you were charged both by the government & cellular
operators (GSM) that you are giving S.T.D & ROAMING FACILITIES to your
reliance phone subscribers.your's was only a W.L.L. they even claimed that you
are misusing a legal loophole & causing crores of losses to the government
& other GSM operators. however while the issue was before the T.R.A.I, the
trai legalized your actions by announcing unified licence for telecom
4.now you are charged by the government of re-routing ISD CALLS as local
calls,thereby causing crores of losses to the government & BSNL.this time
also you may get the reprieve from the government. the government ,if a commonman
does not pay his electric bills in time slaps interest & cuts down the
electric supply immediately.
however the same government ,even if your company has been alleged of causing
crores of rupees losses to the government & other players, always enacts
favourable laws for you like a SANTA CLAUS.
WILL YOU PLEASE CLARIFY mr.mukesh ambani & mr.anil ambani?
the TRAI announced unified licence regime in haste that too with retrospective
effects.so all the charges against reliance were dropped. in the same vein as
unified licence got retrospective effect , why not the government re-imburse
the differece amount out of hefty fees collected from other cellular operators
? take the reliance fees as bench mark.anyway , finally commonman is the
Doctors Aiding Police
to inflict 3rd degree Torture on detainees
2009, a confidential February 2007 ICRC torture report was publicly released.
Titled, "ICRC Report on the Treatment of Fourteen 'High Value Detainees'
in CIA Custody," it detailed harsh and abusive treatment from their time
of arrest, detention, transfer, and incarceration at Guantanamo where ICRC
professionals interviewed them.
information on torture and abusive treatment, they obtained damning, consistent
detainee accounts of medical personnel involvement, including:
-- their monitoring of
and direct participation in torture procedures;
interrogators to continue, adjust, or stop certain ones;
-- informing detainees
that medical treatment depended on their cooperation;
-- performing medical
checks before and after each transfer; and
-- treating the effects
of torture as well as ailments and injuries during incarceration.
participating in torture grievously breaches medical ethics and the 1975 World
Medical Association (WMA) Declaration of Tokyo "Guidelines for Physicians
Concerning Torture and other Cruel, Inhuman or Degrading Treatment or
Punishment in Relation to Detention and Imprisonment." It states:
-- in all cases at all times,
"physician(s) shall not countenance, condone or participate in"
torture or any other form of abuse;
-- they "shall not
use nor allow to be used (their) medical knowledge or skills, or health
information" to aid interrogation in any way;
-- they "shall not
be present during any procedure during which torture or any other forms of
cruel, inhuman or degrading treatment is used or threatened;"
-- they "must have
complete clinical independence" in treating persons for whom they're
medically responsible; and
-- WMA encourages the
international community and fellow physicians to support medical professionals
who face "threats or reprisals resulting from a refusal to condone"
all forms of torture and abuse.
Protocol I of the 1949
Geneva Conventions states:
in medical activities shall neither be compelled to perform acts or to carry
out work contrary to, nor be compelled to refrain from acts required by, the
rules of medical ethics or other rules designed for the benefit of the wounded
and sick, or this Protocol."
On July 7, 2005 in the
New England Journal of Medicine, Dr. Gregg Bloche and Jonathan Marks published
an article titled, "Doctors and Interrogators at Guantanamo Bay" in
which they cited evidence that "Health information (was) routinely
available to behavioral science consultants and others" engaged in
interrogations, in violation of strict medical ethics.
In early 2003, detainee
medical records were readily available, and since late 2002, psychiatrists and
psychologists were involved in crafting extreme stress techniques
"combined with behavior-shaping rewards to extract actionable intelligence
from resistant captives."
disregard for clinical confidentiality" seriously breaches medical ethics
"since it makes every caregiver into an accessory to intelligence
gathering." It also "puts prisoners at greater risk for serious
In July 2006, the
Center for Constitutional Rights (CCR) published a report titled, "Report
on Torture and Cruel, Inhuman, and Degrading Treatment of Prisoners at
Guantanamo Bay, Cuba" that included evidence of medical personnel
involvement in torture.
Abdulraheem Mohammad was told that medical treatment would depend on his
cooperation. Lakhdar Boumediene said every time he requested care he was told
to ask permission from his interrogators. They "controlled his access,
(and it) was granted or denied based on the interrogator's assessment of his
level of cooperation."
medical records confirmed that medical staff were present during their
interrogations "and authorized (them) to proceed."
monitored Mohammed al Qahtani's interrogation during nearly two months of
"severe sleep deprivation and physical stress." At one point, they
rushed him to the base hospital when his heart rate dropped dangerously low.
After stabilization, they returned him the next day for more interrogation.
described doctors performing unnecessary and abusive procedures, including
forced amputations, after which they were denied proper treatment.
psychologists designed "extreme interrogation techniques as part of the
Behavioral Science Consultation Team (BSCT)." In late 2002, it was tasked
"to torment detainees in interrogations...."
International and US
Laws Prohibiting Torture
and US laws unequivocally ban torture under all conditions at all times with no
allowed exceptions ever, for any reasons, including in times of war.
The Third Geneva
Convention covers war prisoners and detainees. It prohibits torture and
protects their right to be treated humanely against "violence to life and
person (and) humiliating and degrading treatment" as well as to judicial
fairness and proper medical treatment. The Fourth Geneva Convention affords the
same rights to civilians in times of war.
anti-torture statute (18 USC, 2340A) prohibits its use outside the US and
defines it as "an act committed by a person acting under the color of law
specifically intended to inflict severe physical or mental pain or
suffering....upon another person within his custody or physical control."
The 1991 Torture
Victims Protection Act authorizes civil suits in America against individuals,
acting in an official capacity for a foreign state, who committed torture
and/or extrajudicial killing.
The 1984 UN Convention
Against Torture bans all forms of torture, cruel and degrading treatment in all
circumstances at all times with no exceptions ever allowed.
The US Constitution's
Fifth, Eighth and Fourteenth Amendments prohibit cruel, inhuman and degrading
treatment or punishment.
The US Army's Field
Manual 27-10 states that military or civilian persons may be punished for committing
war crimes (that include abusive interrogations) under international law. Army
Field Manual 34-52 outlines interrogation procedures and specifically prohibits
force, mental torture, threats, and inhumane treatment.
The Uniform Code of
Military Justice (UCMJ) bans cruelty, oppression, actions intended to degrade
or humiliate, and physical, menacing, and threatening assaults. Army Regulation
(AR) 190-8 protects detainees from violence, assaults, and insults, and directs
that they be treated humanely with respect.
The 1996 US War Crimes
Act prohibits grave Geneva Convention breaches, including (as stipulated under
Common Article III) "violence to life and person, in particular murder of
all kinds, mutilation, cruel treatment and torture (as well as) outrages upon
personal dignity, in particular humiliating and degrading treatment."
international laws also prohibit torture, including the Universal Declaration
of Human Rights and the 1992 International Covenant on Civil and Political
Rights with no exceptions or justifications allowed, such as orders by field
commanders, Pentagon officials, or the President of the United States.
Physicians for Human
Founded in 1986, PHR
"mobilizes health professionals to advance health, dignity, and justice
and promotes the right to health for all." It also "investigates
human rights abuses and works to stop them" in conflict zones, US prisons,
and offshore detention facilities where torture is routinely practiced.
In 2005, it published a
report titled, "Break Them Down: Systematic Use of Psychological Torture
by US Forces," which it called the first comprehensive examination of
"the use of psychological torture by US personnel in the so-called 'war on
terror,' " including sensory deprivation, prolonged isolation, sleep
deprivation, forced nudity, using fierce dogs to instill fear, cultural and
sexual humiliation, mock executions, and threatened violence against loved
It called the effects
devastating and longer-lasting than physical torture, and said psychological
abuse is morally reprehensible and illegal under international and US law.
In August 2009, PHR
published a new report titled, "Aiding Torture: Health Professionals'
Ethics and Human Rights Violations Revealed in the May 2004 CIA Inspector
General's Report," including ethical misconduct not previously known. It
revealed the role of health professionals involved "at every stage in the
development, implementation and legitimization of this torture program."
It explained that
doctors and psychologists actively participated in abusive interrogations and
contributed to the physical and mental suffering of detainees. It called their
actions "an unconscionable affront to the profession of medicine,"
made worse by experimenting on inmates, then "aggregat(ing) data on
(their) reaction to interrogation methods."
PHR's Steven Reisner
said "They were experimenting and keeping records of the results," a
war crime under Geneva and the Nuremberg Code that requires "voluntary
consent" of human subjects and prohibits experiments:
-- that inflict
"unnecessary physical and mental suffering and injury;"
-- if there's "an
a priori reason to believe death or disabling injury will occur;" and
-- from being
implemented if there's reason to believe they'll cause "injury,
disability, or death to the experimental subject."
PHR's report detailed
the psychological and medical effects:
-- forced shaving
inflicts psychological harm "by means of humiliation, both personal and
-- hooding disorients
and causes acute anxiety depression, depersonalization, and abnormal behavior;
-- dietary manipulation
inflicts discomfort and psychological stress;
-- prolonged diapering
causes physical and psychological stress and harm;
-- walling inflicts
physical injuries as well as psychological stress, rage, and helplessness;
-- confinement in a box
in extreme stress positions causes extreme physical and psychological pain and
-- other abuses,
including waterboarding that simulates drowning and the feeling of helplessness
to prevent it.
Involvement of Medical
They help develop,
implement, provide cover for, and justify torture and abusive practices.
They're actively involved in designing harmful interrogation techniques in
clear violation of the law and medical ethics. They're "complicit in
selecting and then rationalizing (methods) whose safety and efficacy in
eliciting accurate information have no valid basis in science." Their
actions constitute "a practice that approaches unlawful
CIA guidelines require
health professionals, including a doctor and psychologist, to be present during
enhanced interrogations, "thereby placing (them) in the untenable position
of calibrating harm rather than serving as protectors and healers as"
their ethical code demands.
They also participate
in initial physical and psychological assessments, then monitor all subsequent
interrogations. They know their actions are harmful, unethical, and illegal,
yet they serve willingly.
PHR believes they should be
investigated on charges of "alleged criminal conduct." Those proved
guilty should be prosecuted, lose their license, professional society
memberships, and any standing in the medical community henceforth.
An Act Of Torture
By Arun Ferreira
12 May, 2010
A critical appraisal of the proposed Prevention Of Torture
The government is attempting to pass
the PREVENTION OF TORTURE BILL, 2010 after it has received the nod from the
cabinet on April 8, 2010. Although the Government of India signed the United
Nations Convention against torture and other cruel, inhuman or degrading
treatment or Punishment (UNCAT) almost 13 years ago, it has failed to ratify it
till date. Coming under heavy pressure from the International community and
civil society this proposed Bill is an attempt to “amend prevailing laws” so as
to make torture a punishable offence. But as we shall see further, such a
proposed legislation is only playing lip-service to the obligations set by the
UNCAT and is nothing but a mere eyewash. The proposed legislation is not only a
climb down from the standards set by the UNCAT but in many ways is in direct
opposition to the basic norm of non-derogability of the Right of Freedom from
A watered down Definition of Torture
The definition of an act of torture
specified in the proposed Bill has narrowed the scope of acts to be considered
as offences amounting to torture. The definition of torture is elaborated in
Article 1(1) of the UNCAT, which states:
“…torture means any act by which
severe pain or suffering, whether physical or mental, is intentionally
inflicted on a person for such purposes as obtaining from him or a third person
information or a confession, punishing him for an act he or a third person has
committed or is suspected of having committed, or intimidating or coercing him
or a third person, or for any reason based on discrimination of any kind, when
such pain or suffering is inflicted by or at the instigation of or with the
consent or acquiescence of a public official or other person acting in an
official capacity. It does not include pain or suffering arising only from,
inherent in or incidental to lawful sanctions.”
While on the other hand the proposed Bill defines torture as
3. Whoever, being a public servant
or being abetted by a public servant or with the consent or acquiescence of a
public servant, intentionally does any act which causes –
(i) grievous hurt to any person or
(ii) danger to life, limb or health
(whether mental or physical) of any person, is said to inflict torture.
Provided that nothing contained in this section shall apply to any pain hurt or
danger as aforementioned caused by an act, which is justified by law.
4. Where the public servant referred
to in section 3 or any person abetted by or with the consent or acquiescence of
such public servant, tortures any person –
(a) for the purpose of extorting
from him or from any other person interested in him, any confession or any
information which may lead to the detection of an offence or misconduct;
(b) on the ground of his religion,
race, place of birth, residence, language, caste or community or any other
ground whatsoever shall be punished with imprisonment of either description for
a term which may extend to ten years and shall also be liable to fine.”
Given that the words and expressions of this proposed Bill have the same
meanings as the Indian Penal Code (IPC) read with the comments added in the
draft Bill, it is necessary to critically examine the implications of such a
proposed definition. First of all, there is a drastic narrowing down of what
constitutes an act of torture. The UNCAT lays emphasis to the infliction of
“severe pain or suffering”, whereas the proposed Bill uses phrases such as
“grievous hurt/danger to life, limb or health”. These expressions have a much
narrower interpretation. For instance, acts of beating the victim with a stick,
inserting chilli powder or petrol in the rectum of the victim, stretching the
victims legs apart to an unbearable extent; application of electric current to
the victims body or private parts; hanging the victim upside down from the
ceiling, waterboarding; illegal detention, etc. currently practiced by our
security agencies would cause “severe pain and suffering” but may not amount to
“grievous hut/danger to life, limb or health” even in its broadest sense. Such
acts which have conveniently evaded prosecution under the existing penal laws
will continue to do so, even more, under the proposed Bill.
Secondly, certain acts which are already considered as torture under IPC
(Section 330) have been consciously evaded in the proposed definition. Here,
simple “hurt” by a public servant would call for a punishment of a seven year
term and find. Thirdly, the purposes of torture included in the definition of
the UNCAT are as (1) obtaining information/confession (2) punishment (3)
Intimidation/coercion and (4) based on discrimination. On the other hand the
proposed Bill restricts itself to only two of these i.e. the first and fourth.
By such a restrictive definition torture committed by over-zealous public
servants who see themselves as extra judicial penal authorities would not be
liable for punishments. In such cases, like the Bhagalpur blindings, torture is
committed for the sole purpose of punishment. Similarly in areas of mass
resistance, acts of torture are committed on the protesters for the only
purpose of forcing them into submission. Here to,, such an act would not
attract any punishment under the proposed Bill. Finally, on the question of
quantum of punishment there is no advancement to the existing provisions under
section 331 IPC, which punishes grievous hurt with imprisonments upto ten years
and fine. But for an act causing “danger to life” which would be prosecutable
under section 307 IPC and attract punishment for life, the proposed Bill in
fact seeks to reduce the punishment.
Overall, the proposed Bill rather than providing effective punishments for
torture is instead a climb down from the International anti-torture standards
and has even gone to the extent of diluting existing penal laws with regards to
No change in the existing systems of Impunity
A major obstacle in punishing those who are responsible for acts of torture is
the fact that they are “public servants”. The prosecution of a public servant
becomes virtually impossible due to the existence of section 197 of Code of
Criminal Procedure (CrPC) which provides that they cannot be prosecuted without
prior permission from the government, either State or Central, which employs
them. In the areas of Jammu & Kashmir and the North-East, where the writ of
the Armed Forces Special Powers Act (AFSPA) runs, prosecution of Armed forces
personnel responsible for torture is equally impossible, given the provision of
section 6 of AFSPA, which reads:
“No prosecution, suit or other legal proceeding shall be instituted except with
the previous sanction of the Central Government, against any person in respect
of anything done or purported to be done in the exercise of the powers
conferred by this Act.”
Without any concrete step to repeal section 197 CrPC or the draconian AFSPA one
cannot envisage any purposeful prevention of torture legislation.
Another impediment in the prosecution of public servants responsible for acts
of torture is the fact that they enjoy immense power, authority and patronage
in the administrative setup. They are therefore in a position to influence the
investigation of an act of torture. Also given the fact that most acts of
torture are committed within the walls of a lockup or detention centre it is
extremely difficult to find reliable and trustworthy witnesses. In such a
situation there is a strong possibility that corroboration of the victims’
testimony may be weak. This should not be used to the victims’ disadvantage.
Thus, if the fact of pain or suffering is proved and the victim testifies that
the same has been caused by a public servant the court should presume the same.
The proposed Bill lacks such an approach.
The proposed Bill in section 5, in fact creates another obstacle for the
prosecution of the public servant. It introduces a limitation for cognizance of
an offence by the Court which hither to didn’t exist in existing Criminal
procedural law for offence punishable over 3 years. This limitation for
cognizance by the Court is given as six months in the proposed Bill. Existing
procedural law under section 468(2) (a) Cr.PC gives such time limitation for
offences punishable solely by fine. Such as Jaywalking, spitting on the
payment, etc. Such a time limit, in cases of torture is a judicial
impossibility given that it would first of all take the victim quite some time
to free himself from the public servant’s custody and administrative grip and
thereafter build the confidence to file a complaint. Procedures of filing an
FIR, obtaining sanction for prosecuting the public servant, arresting him and
filing a charge sheet for the court to take cognizance would follow. Anyone
well versed with the realities of the functioning of our judiciary will
blatantly claim such a limitation as not only absurd but rather a malafide
sleight of hand by the drafters of the bill (who see an act of torture as
“serious” as pitting on the pavement) This in effect ensures that practically
no case of torture will ever reach the stage of trial.
Silence on the use of “Scientific” tests
The proposed legislation also
maintains silence on the governments legally accepted practice of conducting
Narco-analysis, Polygraph and Brain mapping tests. Such tests are conducted for
the purpose of extorting information, confession, by a public servant, and
amounts of intentionally inflicting. Physical / mental suffering and degrading
treatment. All these aspects amount to an act of torture as defined by the
UNCAT. Such so-called scientific tests have also violated other International
Human Rights standards such as Article 7 of the International Covenant pf Civil
and Political Rights (ratified by the Govt. of India) which states;
No one shall be subjected to torture or to cruel, inhuman or degrading
treatment or punishment. In particular, no one shall be subjected without his
free consent to medical or scientific experimentation”.
Such tests are already banned in the
US and European countries. This matter is currently before the Supreme Court in
a petition filed by the All India Lawyers Joint Action Committee praying for a
ban on Narco-analysis. The National Law commission has proposed similarly. The
FSLs in Bangalore, Gandhinagar, Mumbai and Chennai have stopped conducting
these tests since the past two years. Even a committee appointed by the Union
Home Ministry (headed by NIMHANS director D. Nagaraja) has questioned the very
scientific basis of use of Brain mapping tests. It is therefore only logical
that the proposed Prevention of torture legislation ought to unequivolly ban
the practice of such tests.
Torture of terror suspects legally sanctioned
The most dangerous provision of this
proposed Bill is that it would not apply when the victims of torture are
covered by special laws such as the Unlawful Activities (Prevention) Act.
Presently, the Unlawful Activities (Prevention) Act or UAPA is the foremost
specialized anti-terror laws being used by the government. UAPA has been used
indiscriminately on Muslims, Adivasis, Dalits, Journalists and other political,
social, cultural and human rights activists. Such accused have been picked up
on mere suspicion, tortured into submission, encountered, etc. for their
alleged involvement in movements against the State or for their political
convictions. This provision, if incorporated in the proposed Bill, while
effectively closing the doors for redressal to all the above sections, gives a
blatant signal for intensifying torture in such cases.
It is a well known fact, documented by numerous Human Rights organizations,
that incidents of torture are systematically practiced by the security forces
as part of a counter insurgency policy. In Jammu & Kashmir itself nearly
8000 to 10,000 persons have been tortured and thereafter “disappeared” since
1989. Many cases of custodial rape and murder have take place in Manipur and
other North-East states: Instances of torture of Naxal suspects are quite
common especially in areas of mass resistance. The Andhra government itself
admitted that several innocent Muslim accused of the Hyderabad Bomb blasts of
2007 had been tortured. By such derogation the government attempts to present
the “threat of terrorism” as a pretext for denying such suspects the right to
remedies under the proposed Bill. This is indirect opposition to the very
letter and spirit of the UNCAT, which states in Article 2(2) that:
“No exceptional circumstances
whatsoever, whether a state of war or threat of war, internal political
instability or any other public emergency, may be invoked as a justification of
Here the government could very well
draw lessons from the efforts of our Prime Minister’s daughter, Amrita Singh’s
documentation along with the American Civil Liberties Union (ACLU) on reports
of torture inflicted on terror suspects in US run overseas detention centers.
The Bush administration faced severe criticism for such treatment of terror
suspects and the Obama administration had been forced to take cognizance. No
government whatsoever can invoke the bogey of terrorism as reason for the
systematic practice of “special interrogation techniques” or other such forms
of torture. This part of the proposed Bill is nothing but a blatant violation
of the non-derogability of the basic right of freedom from torture.
Other serious shortcomings
The proposed Bill has provided for
the setting up of Independent panels to deal with complaints of torture, both
at the Central and State level so that such complaints would be forwarded to
such panels. One can only envisage the future of such panels in the light of
the implementation of the Protection for Human Rights Act, 1993. Similar
provisions for setting up of State Human Rights Commissions and special Human
Rights courts were provided for. But even after 17 years such bodies are absent
in many states. The proposed Bill also does not after any right to compensation
and rehabilitation to the torture victim. It also lacks any provision for
mandatory unintimidated visits by the local judiciary to all detention centres
and lockups within its jurisdiction. Both these are essential remedial measures
put forth by the Human Rights movement for the Prevention of torture.
There, no doubt exists a need for a
special and effective anti-torture programme. Historically, torture has been
institutionalized in India. During the British rule, it had been used as a
weapon to keep the “natives in submission” and suppress any National Liberation
movement. The present ruling classes continue using this inherited institution
for similar purposes i.e to counter people’s movements. Here torture is not an
exception perpetuated by some “evil subordinates”, but rather a deliberate
practice sanctioned by top ranking officials and policy makers. Special
draconian laws such as TADA, POTA, UAPA, AFSPA etc. have further
institutionalized torture. The proposed Prevention of Torture Bill, 2010 seems
to be an attempt to preserve the foundation of this institution. It is a sham
with the only objective of playing to the international audience an effort to
establish the façade of being the “world’s Largest Democracy”.
Arun Ferreira is
curently an undertrial in the Nagpur Central prison, arrested in May 2007 on
charges of being a "naxalite", charges which have been disputed in
the court of law; but he still continues to languish in jail on the remaining
trumped up charges.
FUNDAMENTAL RIGHTS OF CITIZENS Vs
PRIVILEGES OF CONSTITUTIONAL FUNCTIONARIES IN INDIA
Let the Legislators of states, members of parliament, High courts & Supreme
Court Judges & other constitutional functionaries answer the following
questions which are vital in a democracy.
1) What are the fundamental rights of a citizen guaranteed under the
constitution (Article 21) ?
2) What are the privileges conferred on legislators & parliamentarians by
the constitution of India?
a) Inside the House b) Outside the House
3) What are privileges conferred on constitutional functionaries, like
a) President of India b) Prime Minister of India
c) Chief Justice of India d) Chairman of NHRC
e) Central Vigilance Commissioners.
4) Are the privileges legal immunity conferred on above mentioned
constitutional functionaries ?
a) Cover all their official actions irrespective of merit.
b) Cover both their official & personal actions.
5) Are the privileges defined & codified ?
6) Are these privileges above freedom of the press ?
7) Are the liberty & fundamental rights of the citizens guaranteed by the
constitution, above the privileges of the constitutional functionaries or equal
or below ?
8) Can the Indian legislatures & parliament be equated to the House of
commons in England which is considered to be a superior court and court of
9) Can the division of powers, namely the legislature, the executive and the
Judiciary, be equated to the functioning of the House of commons and House of
Lords in England ?
10) Can a citizen be said to have committed breach of privilege of the House or
court and causing contempt of the house or court by raising the issues of
accountability of constitutional functionaries ?
11) Can a Legislature or Parliament enact a new law, to circumvent or to
nullify the Judicial orders with respect to wrongdoings by peoples
representatives & executive ? does not it amount to infringement of
Judicial powers & contempt of the court by the House.
12) Are the FUNDAMENTAL DUTIES of a citizen more important than constitutional
duties of a constitutional functionary or equal in importance to it ?
13) Can a constitutional functionary commit crimes, anti-national activities in
the name of constitutional duties, behind the legal veil of official's secret
act & go unaccountable for his actions and go unpunished by his legal
immunity privileges ?
14) Are the Legislators members of parliament, High court & Supreme court
Judges and other constitutional functionaries not willing to codify their
privileges for the reason that if codified their privileges would be curtailed
and their action would be subjected to legal scrutiny. ?
15) By votes of citizens Legislators and parliamentarians get seats in the
legislature and Parliament out of tax payer's money, they get their pay, perks
& lead 5-Star luxurious lifestyles. Hence whether a vote of a citizen is
above (More valid) or a seat of legislator or parliamentarian is above or more
valid in a democracy ?
16) Judges & Constitutional functionaries are indirectly appointed by
voters / tax payers. Out of tax payers money, they get their pay, perks &
lead 5-star luxurious lifestyles. Hence, whether the vote of a citizen,
fundamental duties of a tax payer is above (more valid) or a seat of judge /
constitutional functionary is above (more
valid) in a democracy ?
17) If there is a vacuum in the Legislature or parliament, who is to fill up that
vacuum till such time that the legislature or parliament acts provide a
solution by performing its role by enacting proper legislation to cover the
field (vacuum) ?
18) While it is an unhealthy practice for a Judge to claim to be a Judge in his
own cause, is it not worse for the members of the legislature and parliament to
be judges in their own cause ?
19) Are the Technicalities of the case more important to a judge or Justice to
a citizen, protection of fundamental rights of citizen.?
20) Why not the constitutional functionaries initiate suo moto action with
respect to numerous cases of injustices reported in Media ?
21) Why not the Judges admit various cases of Injustices affecting public, as
the Public Interest Litigation" ? In some cases, the Public or the person
representing them is unable to afford the high cost of the case. Why not free
legal aid is given ?.
22) What is the criteria for admitting a P.I.L. & giving free legal aid ?
23) Communication - free flow of information is the lifeline of a democracy.
Why the constitutional functionaries are not honouring the Right to Information
of Citizens ?
Mechanics of Corruption in Indian
List of scandals in India
From Wikipedia, the free
The following is a list of
alleged scams and scandals in India since
independence. These include political, financial, corporate and others.
Entries are arranged by date, from
most current to less recent. The year is the one in which the alleged scam
first reported or came into knowledge of public.
RTI / Human Rights Activist
in Indian Courts of Law / Justice
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