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Editor: NAGARAJA.M.R… VOL.05 issue. 50 …………14/12/2011
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Threats to RTI /
Human Rights Activist
Judgement Fixing in
Indian Courts of Law / Justice
: CORPORATE CRIMINALS / CORPORATE
TERRORISTS / TAX THIEVES RESPONSIBLE FOR ALL
ILLS 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
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.
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 .
: development is a must , it must be all around . but not at the cost of
majority to make a few richer.
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,
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
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
Shell is worth more than Morocco
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 & other criminal
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 be.
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 , corporates.
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
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 criminals.
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.
MULTINATIONAL COMPANIES ARE INVESTING IN INDIA?
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 India.
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 & mighty.
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 scams .
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
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
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.
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
& 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 enforcement nil.
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
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
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
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 extrovert outlook.
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 and shareholders.
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
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
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 in prison.
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.
Satyam's independent 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
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 interrogate him.
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 “confession”.
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?
Allegations and 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
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 fear.
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.
Interestingly, two 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 last?
India: Descent Into Darkness
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
This is the spectre of starving India.
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
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.
Despite the 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 protections.
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
Marvelous environmental 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 drains.
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
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 reluctance.
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 Jharkhand alone.
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
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.
Public Interest 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
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
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 Network]
PRICOL VP MURDER , SATYAM CO
FRAUD , SINGUR AGITATION & GRAZIONO CEO MASS MURDER
- An eye opener
to irresponsible corporate India
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.
The recent 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.
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 , transparency.
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
Top 10 Financial Scams in India
- 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 accountability.
Financial Scamsters Are Rarely Punished
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
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 huge scandals.
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 India.
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
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
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
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
Satyam – 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 financial scam!
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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 investors.
- 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
- 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
- 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
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
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.
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
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
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.
Today’s ridiculous 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 that Anderson
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
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
by Mukesh Williams
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 love it.
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.
Union 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
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.
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.
British 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
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 consultations.
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 death.
The British rely on BP as the national icon and savior of British
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
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,
Corporate Social Responsibility
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.
Definitions 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
Corporate 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
& KARNATAKA STATE
, 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. Where
is the accountability of religious
bodies & political parties in india ?
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 ACTS/LEGISLATIONS FOR
-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 mahajan.
Various indian & multinational companies are looting indian exchequer to
the tune of thousands of crores of rupees , through lobbying / bribing.
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
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 middlemen.
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
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 companies operate.
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 company?
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
are some parallels
between the two companies. Bofors money found its way to exotic places
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 Gujarat.
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
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 underhand deal.
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
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
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?
OF Late DHIRUBHAI AMBANI of Reliance
Another 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.
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.
Government’s 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.
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
- Now A Petroleum
- The -Reliance KG Gas Scam Prabir Purkayastha,
- 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
- AMBANIS ROW : GOVT HAS LAST WORD ON KG BASIN GAS
PRICE : SC
- POOL PRICING FOR KG BASIN GAS TO HARM ANDHRA PRADESH
- PRODUCTION OF GAS IN KG BASIN
- FINDINGS OF ICAI IN SATYAM SCAM CASE
RELIANCE INDUSTRIES LIMITED
- WHERE IS ACCOUNTABILITY?
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
By Stephen Lendman
In April 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.
Besides detailed 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;
-- instructing 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.
Condoning or 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;
-- 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:
"Persons engaged 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
"Wholesale 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 abuse."
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.
Detainee Othman 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."
Bosnian prisoner medical records
confirmed that medical staff were present during their interrogations "and
authorized (them) to proceed."
Medical personnel 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.
Other prisoners described doctors
performing unnecessary and abusive procedures, including forced amputations,
after which they were denied proper treatment.
Psychiatrists and 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
Numerous international 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.
The federal 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
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."
Other binding 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 Rights (PHR)
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 ones.
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
-- 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
PHR's report detailed the psychological
and medical effects:
-- forced shaving inflicts psychological
harm "by means of humiliation, both personal and religious;"
-- 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 trauma; and
-- other abuses, including waterboarding
that simulates drowning and the feeling of helplessness to prevent it.
Involvement of Medical Professionals
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 experimentation."
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
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 Bill, 2010
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.
Punishment for Torture
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)
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
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 torture”.
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
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 records ?
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
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
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.