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Fwd: CSR: Bribes are now being channelled through corporate deals

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  • Thiagarajan Arunachalam
    From: *karmayog - tanya* ** http://www.livemint.com/Opinion/FlIpIS8qltutqf6zWJoevM/The-changing-business-of-bribes-in-India.html The changing business of
    Message 1 of 1 , Jun 19, 2013
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      From: karmayog - tanya



      The changing business of bribes in India

      Bribes are now being channelled through corporate deals rather than cash


      First Published: Tue, Jun 18 2013. 06 24 PM IST

      The latest corruption scam involving a top politician once again throws
      light on how bribes are being channelled through corporate deals rather than
      the old transfers of cash. The Central Bureau of Investigation last week
      said it was looking into an investment by Jindal Steel and Power in a
      company owned by Dasari Narayana Rao, who was coal minister when the Jindal
      firm secured a coal block in Jharkhand. The federal investigation agency
      suspects that the investment is actually a pay-off for getting the coal

      The Jindal case is the most recent in a series of corruption investigations
      involving Indian politicians on funds flowing through corporate entities. Is
      this the new face of bribery?

      The suitcase crammed with cash has traditionally been a popular metaphor for
      corruption-and with good reason. For example, there was the sensational
      claim made by Dalal Street scamster Harshad Mehta that he had handed over a
      suitcase of cash to P.V. Narasimha Rao when the latter was prime minister.
      Then there were the grainy video images of wads of currency being placed
      before former Bharatiya Janata Party (BJP) chief Bangaru Laxman by reporters
      posing as arms dealers.

      There is enough anecdotal evidence to suggest that cash still greases the
      crooked machinery of Indian politics. The Election Commission of India
      continues to catch vehicles loaded with cash during election campaigns. The
      Reserve Bank of India data on money supply usually shows a spike in cash (or
      what the central bank describes as "currency with the public") whenever the
      country is preparing to go to the polls. The preference for high-value
      currency notes in recent years is partly explained by high inflation, but
      perhaps also by corruption.

      However, many current corruption scams also tell us a fair bit about the
      changing nature of venality in India-more specifically the corporatization
      of the process. Consider some recent evidence, starting with the infamous
      telecom scam. The crux of the case against Shahid Balwa of Swan Telecom is
      that his company lent Rs.200 crore to Kalaignar TV, controlled by the
      Dravida Munnettra Kazhagam, the party of former telecom minister A. Raja.
      Investigating agencies have claimed that this money was actually a pay-off
      for getting 2G licences during the controversial 2008 spectrum allocation.
      Compare this with the case of Sukh Ram, telecom minister in the Narasimha
      Rao government, who was caught with Rs.3.6 crore of cash hidden in suitcases
      and bags at his home.

      Several other cases have hit the headlines in recent months. India Cements
      vice-chairman and managing director N. Srinivasan has been questioned for
      investments of around Rs.140 crore in companies controlled by Y.S. Jagan
      Mohan Reddy, head of the YSR Congress in Andhra Pradesh, allegedly in
      exchange for favours. Srinivasan has denied these charges. BJP leader Nitin
      Gadkari was investigated after revelations that a firm linked to
      infrastructure company Ideal Road Builders (IRB) had lent Rs.164 crore to
      the Purti Group controlled by Gadkari. IRB had won many road contracts
      between 1995 and 1999, when Gadkari was minister in charge of the public
      works department in Maharashtra.

      Activist Arvind Kejriwal blew the lid on sweet deals between Robert Vadra
      and realtor DLF, including land transactions as well loans given to
      companies controlled by the son-in-law of Congress president Sonia Gandhi.
      Once again, both sides have denied any wrongdoing. Meanwhile, the Prime
      Minister's Office last week turned down a request by a Right to Information
      activist for a report on how the Vadra-DLF investigations are progressing.

      A lot has been written and said about how companies with political access
      have managed to capture natural resources such as land, minerals and
      spectrum. What has attracted less notice is that the gatekeepers of these
      resources-powerful politicians-have also used their companies to collect
      money. Crony capitalism has worked at both ends of these deals.

      One reason why corporate deals have replaced cash is that the amounts
      involved have grown; the money at stake these days cannot be stuffed into a
      few suitcases. Another reason is that there is growing pressure on offshore
      tax havens, where dirty money would once sit without a care.

      What do the new modes of payment of bribes reveal about the changing face of
      corruption in India? Tell us at views@...

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