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editorial : CORPORATE CRIMES & CORRUPT PUBLIC SERVANTS – Root cause of naxalism , terrorism in
The corrupt public servants together with corporate criminals are looting the state exchequer , looting the resources which rightfully belongs to all the people , public. Thereby, making those public utterly poor. This has created a wide chasm between few utterly rich people & crores of utterly poor. This has generated lot of socio-economic problems in
The government is trying to tackle the problem of naxalism , terrorism by violence , instant justice like fake encounters , 3rd degree tortures , lock-up deaths , etc. why not government meating out instant justice to corporate criminals & corrupt public servants ?
Both government & public must respect law & democratic norms . The government must aim at the root cause of these problems , like providing realistic displacement packages to project displaced persons , ensuring proper supply of ration through PDS in ration shops , ensuring proper implementation of food for work programmes , ensuring proper free medical care & free supply of medicines to poor in government hospitals , to strictly eradicate corruption in public service & to strictly enforce corporate accountability in India. However , the government is not sincere in it's objectives or intentions.
Our publication HRW has appealed to the authorities numerous times seeking justice about following corporate crimes , still there is no word called justice , why this delay by authorities. I am reproducing some web pages of few cases of corporate crimes for justice. JAI HIND. VANDE MATARAM.
Case no.1 CORPORATE CRIMES RPG CABLES LIMITED
case no.2 MEGA FRAUD BY GOVERNMENT OF
Case no.3 are you ready to catch tax thieves ?
case no.4 MOBILE PHONES , CURRENCY SCANDALS
Case no.5 reliance industry where is accountability ?
case no.6 crimes at infosys campus
case no.6 crimes by B.D.A against a poor woman
case no.7 crimes of land mafia in
case no.8 currency thefts in RBI Press
case no.9 killer colas & killer medicines of
RPG CABLES LTD thy name FRAUD ? BEWARE BANKERS& SMALL INVESTORS
M/S RPG CABLES LTD , an industry located at
Without due permission of the customers & in violation of customer contracts, these executives are effecting deviations in the process like using recycled products, processing at higher speeds & using the approved materials at the ends of the cable ie testing lengths only , in between the cable length non-conforming raw materials are used. Thereby, these executives are cheating the customers like BSNL, PGCIL, GAIL, MTNL, etc since years. Many cables are failing at fields , if thorough inspection is done many more will cometo light. The company is made to pay huge penalties , even suffered blacklisting all due to the greedy actions of senior executives. There is no proper tendering procedure while purchasing raw materials or disposal of machineries . The money is siphoned-off to sister companies by offering low interest loans,selling the shares at undervalue or by purchasing shares at inflated price , etc. There is no proper documentation or tax payments for the flow of goods between M/S RPG CABLES LTD, MYSORE & M/S CONCEPTA CABLES LTD,
These type of ill-gotten wealth of various industrialists & traders in
The shameful part is that inspite of so much of cheating by the said company ie by it's executives , now the government through BIFR has given loans again to this company. Definitely this money to the tune of crores will disappear in the black hole too . God save my country.
JAI HIND . VANDE MATARAM.
RPG CABLES LTD & SUDARSHAN TELECOM
These two private companies situated at
wake-up labour commissioner & chief inspector of factories,government of karnataka. - illegal, unfair labour practices by M/S RPG CABLES LTD MYSORE , M/S VARSHACABLES LTD MYSORE , M/S FINECORE CABLES LTD , MYSORE.
In M/S RPG Cables Ltd , the workers are forced to work in hazardous atmosphere without proper safety gears , safety shoes & forced to lift/push heavier loads . They are forced to work throughout the night shift even without mandatory½ hour break. labour laws are flouted rampantly , some of the workers are suffering from health problems due to exposure to the fumes of hazardous chemicals like M.E.K , polythene compounds , petroleum jelly , optic fibre materials. The management has illegally retrenched number of workmen from the service &has appointed number of casual labourers in their place . to by-pass the law they have even outsourced some works.
In M/S VARSHA CABLES & M/S FINECORE CABLES and it's sister concerns ,workers are subjected to work in hazardous conditions. First of all , the machine layout , the space for material movement, & storage space is so congested that the accidents are definite to happen. There are allegations that some of the workers are not even paid nominal wages & are not even covered by E.S.I , P.F. the workers are not even provided with appropriate safety gears . To escape from legal prosecution the names of workers are not maintained in muster rolls instead it is just entered in a note book. Provisions of drinking water , urinals , first aid , etc are poor. The workers are forced to inhale the fumes of polythene compounds ,petroleum jelly , etc and forced to lift/push heavier loads . even women workers are made to work for long hours. Are the factory inspectorate & labour department sleeping ?
RPG CABLES LIMITED
Due to various wrong decisions of the management like purchase of wrong raw materials(not up to customer requirements),changing process parameters and using reworked/recycled materials, all in violation of CONTRACTS WITH THE CUSTOMERS(like BSNL , MTNL , PGCIL , GAIL ) . thereby the customers were supplied with inferior quality products than those mentioned in the contract . as a result the company was forced to frequently pay-up penalties to the customers & to provide replacements to the customers ,all to the tune of crores of rupees .after opening up of CONCEPTA CABLES LTD in mysore beside the RPG CABLES LTD in mysore the materials used to be moved from one company to another without any documents or excise documents. the company has totally disregarded the safety & environmental norms. HOWEVER WHENEVERGOVERNMENT OFFICIALS CAME FOR INSPECTION THEY MANAGED IT SO WELL WITH THE AID OF FAKE DOCUMENTS.
The management frequently made large purchases from the market without calling for public bidding / tender. the management frequently gave loans/money advances to the sister concerns at low lending rates than the prevailing market rates. finally as a result the public –the Share holders , government , lending banks are cheated by the management.
AN APPEAL TO HONOURABLE MINISTER FOR LABOUR , GOK ,
Sufferer of injustices
MEGA FRAUD BY GOVERNMENT OF
- An appeal to Honourable Supreme Court of
India has become an IT power , taken giant strides in the field of science & technology. More & more MNCs are investing in
The banks insist on matching collateral security even for self employment / educational loans by poor for an amount of Rs.5000. if the loans are not paid in time , rowdies / recovery agents are sent by banks to collect the amount by muscle power. As a final step , banks auction-off properties of collateral security to recover it's dues. Even, the tax authorities mercilessly extract tax dues to the last penny from the middle class.
The same banks, overestimate the project cost of corporates , overestimate the project feasibility & it's worth and coolly extend hundreds of crores of rupees loans without matching collateral security. The banks extend overdraft facilities without matching collateral securities , to these corporates. When loans are not repaid, no rowdies are sent by banks. The promoters , directors of such tainted corporates drain – off the companies resources cunningly through insider trading , finally making the company sick. Such companies don't pay taxes , electricity bills , water bills , etc properly to respective authorities. The authorities are deaf , dumb & blind to all these actions of such corporates. At the end , banks write-off such loans as non performing assets (NPA) & file case before courts for recovery of dues. Even if the properties of collateral security are auctioned-off dues cann't be fully realized. Finally public money is swindled . ALL THIS IS POSSIBLE DUE TO THE CONNIVANCE OF KEY BANK OFFICIALS , TAX OFFICIALS WITH CRIMINAL CORPORATES SINCE THE INCEPTION OF SUCH COMPANIES . THIS ALSO POSES UNFAIR COMPETITION TO HONEST CORPORATES. How to stop this ? by making corporate accountability ,accountability of bank , tax officials more stringent with penal provisions . afterall , they are playing with public money not their papa's property.
Already , by the connivance of public servants , bank , tax officials we have witnessed many scams like harshad Mehta , ketan parekh , hawala , etc and more than Rs. 2000000 crore NPAs are on the books of the banks. Now, the government of
HRW has extended it's services to GOI months back itself , to apprehend tax thieves , till date there is no reply from GOI , why ?
Hereby , HRW requests the Honourable Supreme Court of
- to make necessary amendments to companies act , to make the promoters , directors of the corporates personally accountable for all their actions.
- to constitute committees consisting of public persons with powers to scrutinize & verify all the actions of corporates for insider trading like – selling products , materials , shares to their sister concerns at discounted prices or buying products , materials , shares from their sister concerns at inflated prices or lending loans at discount rates to their sister concerns or taking loans from their sister concerns at high rate of interest or loaning materials , machines to their sister concerns , etc.
- to constitute committees consisting of public persons , to scrutinize & verify the annual personal tax returns filed by key bank officials & tax officials , who have amassed riches & leading luxurious life styles much beyond the scope of their legal known sources of income.
- to recover all tax dues , loan dues , etc from the corporates from the personal properties , wealth of promoters , directors of such companies.
- to put behind bar the key bank officials who have helped the corporates in swindling public money by overestimating project viability , worth and by overlooking the insider trading of promoters and still extending loans to them.
- to put behind bars tax officials who have helped such corporates in swindling public money.
- to take all the necessary help from public like as services extended by HRW in apprehending tax thieves.
- to recover & protect public money at any cost.
- to confiscate all money , properties possessed by directors of such criminal corporates & properties of corrupt bank , tax officials , public servants.
ARE YOU SINCERELY READY TO CATCH TAX THEIVES ?
- AN APPEL TO
The tax officials of central & state governments are hand in glove with these corporate criminals & traders. For a price, they are helping corporates & traders in evading tax. Most of the tax officials are wealthy & leading luxurious lifestyles , much beyond the scope of their legal income. The black money thus generated every year by tax evasion , is many times more than our total annual budget allocation. As a result, all our fiscal reforms fail & inflation is soaring. This black money is the source of illegal funding of political parties , terrorist outfits & underworld. It is a greater threat to national unity & integrity.
Both the central government & karnataka state government have failed to collect the full , actual tax dues from corporates & traders. As a result , the governments don't have enough money in their coffers even to provide basic needs like health care , education , safe drinking water , etc to the poor & needy. For every Rs.100 tax evaded , one poor patient is dying without medical care , 10 poor persons lack education , 100 persons don't get safe drinking water , 100 persons barely survive on a single piece meal per day , 20 persons starve. Most of The government officials , ministers & people's representatives who have deliberately failed in their duties of tax collection & welfare of poor citizens , SHAMELESSLY indulge in luxurious lifestyle at the expense of poor tax payer . they live in paltial bungalows , chauffer driven AC cars , all living food expenses paid by exchequer , dine at 5-star hotels , only drink bottled mineral water , eat non-vegetarian dishes , drink alcohol sitting before mahatma gandhi's photograph & preaching mahatma's ideals. Mahatma preached & practiced simple living , vegetarianism & he was teto teller , he paid for his expenses from his earnings . these public servants are parasites , who are making merry at the expense of tax payer.
Some non government organisations ( NGO) have formed trusts and under the aegis of those trusts are running educational institutions , hospitals , community halls , etc , in the name of providing free / subsidised services like education , health care , etc to the poor. It is only in record books , they conduct fake medical camps , self employment training camps . in practice they are running these educational institutions , hospitals & community halls as commercial enterprises & collecting huge fees. they are not even remitting full fees collected to the trust account & swindling the money. no outsider is allowed to become a member of these NGOs , only their cronies & their family members are in these trusts.
Numerous NGOs promoted by religious bodies , mutts are swindling public & government money to the tune of crores of rupees. Nobody dares to question the heads , pontiffs of these mutts , as at his feet VVIPs , ministers fall down. These religious bodies are hot beds of fundamentalism , terrorism & mafia. Hwere is the accountability of religious bodies & political parties in in
Inspite of bringing specific cases to the notice of authorities , they are mum ? hereby , HUMAN RIGHTS WATCH offers it's services ( subject to conditions ) to the governments of
SCANDALS OF MOBILE PHONES & IT'S CURRENCY SALES IN
1. what are the total number of subscribers of each mobile phone service provider both CDMA & GSM yearwise since 1998 till date ?
2. what are the total number of handsets sold since 1998 till date yearwise ? give split figures for CDMA & GSM handsets ?
3. What is the total value of currencies sold by each mobile phone service provider yearwise since 1998 till date ? give split figures for each company?
REQUEST FOR INFORMATION AS PER PROVISIONS OF RTI ACT
- An appeal to tax authorities ABOUT MOBILE PHONE SCANDALS
Case no.1 : in the year 2004 , dealer for tata indicom mobile phone service M/S INTOTO COMMUNICATIONS , kalidasa road , vv mohalla , mysore sold a nokia 2280 mobile hand set to a customer for Rs.4000 along with mobile phone connection ( bill no.41 dt 25/09/2004 ). On the box of the mobile hand set , MRP is mentioned as Rs.5799 , so either the dealer is selling the handset at discount or there is over invoicing the cost of product during import. However there is no mention of discount in the sales bill. There was no mention of 15 digit IMEI number nor there was warranty card . all these proved that , the dealer is dealing in illegal handsets either smuggled , stolen or seconds and selling them to customers as brand new genuine ones.
The matter went before the honourable consumer disputes redressal forum ,
Case no.2 : on 18/06/2006 , M/S Rajhans Novelties , surya bakery circle , hebbal ,
Hereby , i do seek following information under the provisions of RTI ACT from ,the chairman of central board of excise & customs , chairman of central board of direct taxes , government of india & the commissioner , commercial taxes , government of karnataka :
1. is the handset sold through bill no:41 dt 25/09/2004 by m/s INTOTO communications , kalidasa road , vv mohalla
2. is the handset sold through bill no:1017 dt 18/06/2006 , by m/s Rajhans novelties , surya bakery circle , hebbal
3. Why the amount of life time voucher is not shown in sales bill ? why neither the company reliance infocom or it's dealer is not giving written confirmation of 10 year incoming phone service validity inspite of collecting Rs. 795 ?
4. every business transaction needs a bill. Then why don't the sellers of mobile phone currencies , life time cards , activation cards are not giving bills ?
5. also in these currencies , a part of currency ie money is deducted as tax by the mobile companies. Are they passing on those deducted tax amounts to the government ? when there is no track back on the sales of mobile currencies , how the government collects it's rightful tax dues ?
6. how you are monitoring the growing riches of tax officials year after year ?
there is a huge scandal under the belly of mobile phone market , but the tax officials are mum . why ? HRW offers it's services in apprehending tax thieves , are you ready ?
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 millions.
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 operators.
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 looser.
Crimes at INFOSYS campus ?
- wake-up government of Karnataka - an open letter to mr.Narayan murthy
INFOSYS is an indian corporate which made
Recently , disrespect was shown to our sacred Indian National Anthem at your campus , aping Americans is not a big thing . Americans are what they are because they love their country. Every human being must love & respect his motherland & mother first , everything matters later. This crime at your campus is inexcusable.
There are also allegations that at your campus , usage of illegal drugs by inmates is rampant & some inmates behave indecently with girls . how you are ensuring the safety of women at your campus ?
Recently , it has been reported that there are recurring deaths of labourers at your construction site due to lack of proper occupational safety measures . also, it has been reported many of the labourers are not even covered by ESI & PF . from the day one how many persons have died & how many were injured , physically disabled till date ? what follow-up action has been taken by your organization ? is it not the duty of your organization to respect the law of the land with respect to labourer's safety ?
However there are complaints of human rights violations in your own backyard. Infosys is building a vast campus in
DEVELOPMENT AUTHORITY ( B.D.A) BANGALORE
AGAINST A POOR WOWAN
The B.D.A flouts it's own rules & spreads red carpet for big land developers & land grabbers. B.D.A posting is a huge money spinner for corrupt officials. The corrupt B.D.A officials work hand in glove with criminal elements & rowdies. They illegally evict genuine allottees who are poor & without any connections from allotted prime lands & sell-off those prime land to the highest bidder of bribe. The poor fellow is re-alloted lands in backward areas & in some cases left in the lurch.
Now , take the following case. Mr. S.D. chandrashekaraiah a poor old man aged around 80 years was allotted with house no.185, kumaraswamy lay-out, first block, bangalore in 1978 vide letter no.
310/267/BDA/ADM/KMRSL(H)/78-79 dt 11/08/1978.
The chairman of B.D.A has allotted the built house on lease cum sale basis. The poor old man mr. S.D.chandrashekaraiah complied with all the rules & in accordance with it even deposited 25% of the house cost in B.D.A'S account. However when he went over to his allotted house for residing in it, he found out some rowdy elements were already residing there. He complained about this matter to the legal owner of the house ie B.D.A . the B.D.A officials didn't take steps to evict the illegal encroachers nor did they make any complaint to the police. His appeals to B.D.A, chief minister of karnataka , etc fell on deaf ears. Hurt by this gross injustice & mounting financial burdens the poor old man died.
Subsequently, the poor man's daughter smt. Nagalakshmi who was also very poor , appealed to the B.D.A authorities once again , to evict illegal encroachers from her father's allotted house. This time the corrupt B.D.A officials played a different game. They showed her a vacant house, gave her oral instructions to live in that vacant house & told her that they will regularise it in due course. The hapless poor woman took huge loans & repaired the house fit for occupation. Just before she was to occupy that house , corrupt B.D.A officials once again planted rowdy elements in that house. Once again the poor woman was cheated. She lost her house, on top of it her loan burden mounted.
Till date, that poor woman is suffering from these gross injustices of B.D.A . SHAMELESS B.D.A OFFICIALS who take thousands of rupees salary & perks every month, all at the expense of tax-payer has not even cared to rectify the injustice. Thereby, they are violating the poor woman's fundamental & human rights.
Hereby, HUMAN RIGHTS WATCH urges the honourable chief minister of karnataka, honourable lokayuktha for karnataka , honourable chairman national human rights commission , honourable chairman national commission for women & honourable chairman state commission for women karnataka, to take the appropriate action & to speedily provide justice to this poor woman.
THEFTS IN RBI CURRENCY NOTE PRESS
R.B.I CURRENCY THEFT CASE – COVER-UP ACT BY C.B.I?
- AN APPEAL TO THE
Just only one security guard- a constable. It is a cock & bull story of C.B.I, that all alone a single security guard stole the booty. There must be a crime syndicate. The C.B.I officers themselves must be subjected to polygraph, brain mapping tests to know why they are lying , to cover-up whom? The C.B.I has not answered previous questions raised by HRW. The C.B.I must answer the following questions :
1. who were responsible for selling the good printing machine at security press
2. who recruited the candidates below merit rankings in R.B.I for what criminal roles ?
3. how many irregularities have taken place in R.B.I till date ?
4. who is responsible for installing, operating & supervising the security set-up in R.B.I ?
5. how the raw materials ie number of paper sheets, ink, etc are accounted for in inward stores & while issuing for printing ?
6. how wastages, scrap of ink , papers , etc in the printing process are accounted for?
7. How the finished goods ie currency notes are accounted for ?
8. Who keeps physical figures & possession of goods, inventory of all the above?
9. How the scrap paper is disposed off ?
10. From security angle who keeps track from start till dispatch ?
ILLEGAL RECRUITMENT IN R.B.I CURRENCY NOTE PRESS RESULTING IN FREQUENT THEFTS ??? Dear sir,
I have applied for the post of STORES ASSISTANT in 1995 & for the post of PROCESS ASSISTANT in 1996 for vaccancies at Bharatiya Reserve Bank Note Mudran Private Limited ( BRBNMPL) MYSORE & SALBONI. I didn't even get the interview/written test call letter. However candidates with lesser merit ranking were selected. My requests for a copy of merit ranking list fell on deaf ears. In the end of 1996, i once again applied for the posts of PROCESS ASSISTANT & MAINTANANCE ASSISTANT at BRBNMPL. This time round i got written test call letters for both posts. I have successfully cleared the common written test for both posts.
Subsequently i got the interview call letters for both posts. I have successfully appeared for the common interview for both posts. However candidates of lesser merit were selected & i didn't get any
communication at all. My repeated requests for MERIT RANKING LIST fell on deaf ears. It is the criminals in R.B.I MANAGEMENT who declared a good printing machine at nasik security press as scrap & sold it to fake stamp paper king pin karim lala telgi It may be possible that the criminals in the R.B.I MANAGEMENT selected candidates who suited their criminal objectives. As a result there is
frequent occurrence of currency thefts & related irregularities at R.B.I CURRENCY NOTE PRESS,
KILLER COLAS & KILLER MEDICINES OF
The cola companies are so cunning & ruthless that they have used muscle power – rowdies , corrupt police personnel & assaulted harmless peaceful protestors. The cola companies have purchased justice previously in kerala & got favourable judgement. Due to presence of cola companies , under water table has depleted in surrounding villages. The farmers are unable to grow their crops & are committing suicides. One of the senior executive of a cola company – BEJOIS , MADE MURDER THREATS , FIX-UPS IN FALSE CASES TO EDITOR OF HUMAN RIGHTS WATCH'S and even made false complaint to police , but repeatedly failed to turn-up for enquiry fearing that truth will come out. The police closed the case subsequently.
Just a few months back , there was a programme called "bad medicine" on BBC channel , where in the drugs controller for
Your's sincerely, Nagaraj.M.R.
COCA-COLA , PEPSI COLA & OTHER SOFT DRINK MANUFACTURERS -Are you disclosing full information to the consumers about contents of your products ? various soft drink manufacturers & bottled drinking water manufacturers draw their raw material- water from the tube wells . nowadays due to excessive usage of chemical fertilizers , pesticide , insecticides , the ground water table is polluted by these chemicals . these are very harmful for human beings. In some areas even the ground water is poisoned by arsenic & flouride . In addition the soft drink manufacturers use chemical flavours , food additives & preservatives in their products . these are also harmful to human beings above certain limits.
Some of the MNCs are practicing double standards , while in their home operations in the U.S.A they are strictly adhering to F.D.A norms as consumer safety is strictly enforced there by the government , while in
- An appeal to honourable prime minister of
Now, due to rapid industrialisation & globalisation a new economic divide has taken place – rich & poor , haves & have nots. Now, economically poor are also being oppressed along with dalits. The forward caste people in government have framed laws to suit their ends , they have provided concessional priority loans , tax cuts , subsidies , etc from the government to corporate sector . The corporate sector has demanded & got monetary benefits , infrastructure facilities from the government . however the same corporates , MNCs are violating statuotary laws & are averse to social welfare measures of the government . they are averse to provide jobs to dalits , tribals & poor , why ? these corporates are bribing the labour , tax department & other government officials . as a result the government is loosing tax revenues to the tune of thousands of crores every year , the government doesn't have money to provide social welfare measures to common people. The lives of common people are under threat. Now,
the number of common people dying due to starvation , lack of health care is more than in a war field. The threat to unity & integrity of
Now, the government of
till date no action has been taken. Why ? hereby , HRW once again offers it's conditional services to the government of
COVERING-UP CORPORATE FRAUDS IN
- CORPORATE ACCOUNTABILITY & CORPORATE GOVERNANCE NEED OF THE HOUR
Nowadays , even the underworld activities of mafia , terrorist outfits , political parties are being financed by the illegal corporate deals. Who says threat to
Recently , it has been published that , in
CORPORATE FRAUDS IN
`Forget terrorism, I want to be an accountant' Osama Bin Laden, `quoted' in Private Eye.
CORPORATE frauds have becomes a global phenomenon. There is a crisis of confidence arising from the failure of the pillars of the capitalist system such as the stock market, financial analyst and accountants and the investment banks.
From Harshad Mehta to Ketan Parekh and further down to Madhavapura Co-operatives in 2002, it is a familiar story of a few corporate heads indulging in creative accounting with the sole object of enriching themselves at the cost of the lower middle-class investors.
Almost every corporate giant in
India, however, shares the distinction of being in the company of Corporate
Fortune magazine displayed a table of CEOs as felons and suggested that there should be a list of 500 worst-managed corporates in the World.
The American scene
Despite the powerful Securities And Exchange Commission (SEC) and the Internal Revenue Service not found wanting in handing out deterrent punishments, audit firms such as Arthur Andersen and KPMG, went hand in glove with corporate houses to fudge accounts to the detriment of the public at large, which forced the US President, Mr George W. Bush, to inaugurate the new Corporate Fraud Task Force and declare: "This Government will investigate, will arrest and will prosecute corporate executives who break the law.''
"Infectious greed,'' said Mr Alan Greenspan. Ralph Nader was more accurate. "It is impossible to exaggerate the super market of crimes. It is greed on steroids.'' The American Congress passed a Corporate Accountability Act in July 2002. Ralph Nader suggested the setting up of a Federal Bureau of Audits to monitor the top thousand companies. As India grapples with the crises of confidence posed by the failure of so-called pillars of the capitalist system such as investment banks, analysts, accountants, and Dalal Street, it is time to rework the regulatory mechanism and ensure a fool-proof system under which conflict of interest will not arise for audit firms and there will be transparency about financial crashes. There is much in the present American scene that
In August 2002, the
The SFC of
The British Government set up the Serious Frauds Office in 1987 to be responsible for investigating and prosecuting serious or complex frauds. The Attorney-General appoints and superintends its directors. Serious and complex fraud cases can go straight to the Crown Court without committal for trial. That Court can hold preparatory hearings to clarify issues for the jury and settle points of law. Time is of the essence of investigation and the success rate of the
Even in the
The Indian scene
It is unbelievable that the hundreds and thousands of "whistle-blowers'' from board directors to corporate insiders and the accounting firms and the credit-rating agencies were kept in the dark about the goings-on in the Indian financial world.
How did the system ensure such effective silence on the part of so many involved in the deals? How come a few corporate houses were able to rush to the UTI in time to retrieve their investments — a privilege denied to the low-level pensioners eking out their livelihood from the Monthly Income Plans? What is the JPC's answer?
Every time a scam erupts, we seem to be satisfied with the ordering of a probe by the Joint Parliamentary Committee whose report, delivered long after the event, is consigned to the parliamentary libraries without any worthwhile action being taken
Rule of Law
We have a queer sense of the rule of law. A murder accused does not have as many chances of filing appeals in higher fora of law as financial fraudsters.
Our jurisprudence is yet to march in step and act as per the urgent needs of a society plagued by white-collar crimes. Macaulay's Penal Code is incapable of meeting the requirements of this century.
We need a new radical jurisprudence. Financial crimes are no less heinous than the crimes dealt with by the Code of Criminal Procedure. We need a new law to tackle such financial crimes. It is a sad fact of life that the Economic Offences Courts, set up with much fanfare two decades back, have proved a damp squib.
The Government of
The ICAI has been dormant for several decades as can be seen from the fact that in the first two decades of the formation of the accounting standards board, the ICAI issued only 15 accounting standards; it woke up in the past two years and rushed with 12 more standards and more are in the offing.
Whereas these standards were not mandatory in the initial years SEBI has made it compulsory for the entire corporate sector to fall in line and comply with these accounting standards.
It is in this context that the need for internalising our accounting standards arises. We can also emulate the
The Proposed Serious Frauds Office should act as a coordinator along with SEBI, the RBI, the CLB and the Union Revenue Intelligence Wing. And,finally, can we ever visualise any leading corporate fraudster in
Yet, that Bastion of Democracy and Rule of Law — the US — was able to haul up the founder of Adelphia Communications and his sons in handcuffs in front of a bank of television cameras.
ITC Scam - Corporate Crimes and the Indian Big Bourgeoisie
The revelation of the multicrore fraud by the Indian corporate giant, ITC by way of excise evasion and FERA violation, has put in sharp relief the hollowness of the recent rhetorics by the big bourgeoisie, viz. Swadeshi, economic nationalism etc. The company's $100 million foreign exchange and Rs.799 crore excise-evasion fraud and the other recent findings from the raids at Shaw Wallace & Company (Rs.150 crores siphoned off by its NRI owner) and leading export house, Ganapati Exports (over Rs.85 crores of over-invoicing) focus light on the ingenuous and multifarious tricks of corporate fraud, many of which have been standardised as `prudent' business practices.
Less than a year back, when the multinational BAT Industries, the principal non-institutional shareholder in ITC (with about 32% stakes), had first forced the then chairman KL Chugh to resign and then opposed Chugh's man, YC Deveshwar for the post, in an attempt to gain total control over the company, the former chairman draped the tricolour and the whole bourgeoisie and the media lauded it as the heroic defiance of a `nationalist' corporate against a `neo-colonial' British multinational's threats to takeover ITC. However, those who harboured these illusions have received their worst shock with the unfolding of
But the ITC affair serves to highlight certain general characteristics of the big bourgeoisie. For one thing, it has established that corporate boards are dens of thieves. Unwilling to fight what now they describe as archaic FERA rules and regulations unsuited to the modern world of business, these corporate houses preferred to park funds outside the country illegally to carry on what they claim `normal' business practices. Despite their clamour for liberalisation, in reality, they have one-sided preference for only certain liberalisation measures and start squealing, invoking Swadeshi invariably, the moment MNCs mount an assault for takeover, but they are little amenable to any strict framework of corporate accountability to the shareholders.
The claim on ITC due to excise fraud, along with a Rs.74 crore penalty, for just a four-year period, is the biggest excise claim ever served on a company. Excise evasion is not new to the corporate world and various corporate laws have been given the go by time and again. According to the Directorate-General of Anti-Evasion, the amount of excise evasion detected rose from Rs.562 crore to Rs.1,236 crore in the liberalisation period 1991-92 to 1995-96. This in spite of the fact that during this period excise and custom barriers have been reduced and the hold of the `suffocative' rules loosened. But our bourgeoisie which loses no chance to adorn the `nationalist' cloak whenever it comes to foreign takeover bid or opening up of new sectors for FDI, has been consistently devising new methods for evasions. As in the case of ITC, where the company, deliberately for years, maintained a pricing strategy that kept higher effective prices than the maximum retail prices marked on their cigarette packets. Even in the case of exporters who were allowed to import without having to apply for foreign exchange under the liberalised regime, willful violations took place like over-invoicing export bills to pick up the tax concessions on exports. About 605 such cases have been detected by the authorities in the last four years, a period when under the new tax set-offs, EXIM violations should have come down.
The ITC episode also puts a question mark on the role of financial institutions (FIs). In this particular case FIs had put their weight behind Chugh when it came to oppose BAT's move to raise their holdings to 51% — a seemingly patriotic gesture of supporting domestic crooks for the cause of warding off `imperialism'. As a rule most of the nominees of these FIs and the supposedly watchdog bodies like SEBI and CLB sitting in the boards of these companies have remained passive and have hardly taken interest in checking the massive bungling going on in corporate houses, even though collectively they command majority stakes, 35.5% as in the case of ITC. While many FIs complain being under-staffed organisations and having lack of resources for research and investigation, the government too has deliberately pruned their powers — they cannot impose penalties on erring companies which can only be done by courts.
With majority stakes, FIs can effectively prevail over the management to impose strict business discipline. Instead, as was revealed in the case of MS Shoes, another irregularity taking place with alarming regularity has been to make FIs give loans against insufficient collaterals. It is estimated that such unsecured loans in the excess of Rs.4,000 crore lie unrecovered. With forex-starved coffers and also pressures from MNCs and specially after India's surrender at the WTO ministerial meet, it cannot be ruled out that in the future political pressures will be exerted to bring around the FIs to ease the way for raising the stakes of foreign shareholding companies even over 51% or pave way for FIIs for full takeover. The recent SEBI norms on takeovers which describe them as a perfectly healthy business practice in a competitive economy, has already set things in that direction.
Why the crackdown now? The excise evasions which came to light way back in 1992 had been in the cognisance of the enforcement agencies since then but it took them four years to crackdown on the company now on FERA violations after going soft on massive excise frauds. The Chitalia brothers, partners in crime but subsequently fallen apart with ITC, had spilled the beans and their subsequent filing a law-suit against the latter for damages and defamation had already piled up pressure on the enforcement agencies to make the much delayed crackdown on the company. With the country witnessing activism from the judiciary and the enforcement agencies the raids at ITC offices throughout India and the arrests of 2 former chairmen and 8 executive directors, made sensational headlines and gave the impression that a generalised crackdown on corporate crimes may be in the offing.
However, to radicalise it as an Armageddon of the bourgeois state against the erring individual members of the class is wishful thinking. One, these revelations are but the tip of the iceberg of thousands of crores that the corporate crooks have swindled for years. Two, corporate crime does not take place without the sanction of politicians and bureaucrats, with whom the bourgeoisie share a reciprocal symbiosis. Deve Gowda was quick to go all out to allay fears of the industry that a spate of raids were to follow or this was a new `raid-raj'. Even a shaky Bal Thackrey was seen assuaging the fears of his corporate friends. Even at the time of VP Singh as FM, all talk of cleaning up the corporate world fizzled out after few initial raids on business houses like Kirloskars etc. Sometimes, the bourgeois state does crackdown on some individual members of the ruling class, politicians, businessmen, bureaucrats etc., and usually those who would go a bit too far, in the overall interests of the class and class rule. And the media laps this up as the widening dragnet of a neutral state though the holes are so big that the majority escape and only a few are netted. One of the biggest crooks, Reliance Industries was let off the hook recently when the CLB granted permission for compounding of all offences (28 cases out of 29) in the duplicate share certificates and share-switching scandal.
Even the press at large, though with a mild condemnation of ITC's corrupt practices, was sympathising with ITC calling it a victim of imperialist conspiracy and wishing Deveshwar to bring back a `respectable' and `India's very own' multinational back on the tracks. Most of the parties, including the left partners of UF, were rather reserved in their reactions. Instead of demanding of the government to continue with the crackdown on other corporate defaulters, some of the left MPs from CPI-CPI(M) who spoke up individually, only spoke of this as a BAT-Chitalias inspired crackdown on ITC. After all, these are the parties which theorised that Indian big bourgeoisie is opposed to liberalisation in the context of