Fwd: CSR: Bribes are now being channelled through corporate deals
- 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@...