Seven Big Indian Corruption Scandals

8/8/2019 Seven Big Indian Corruption Scandals

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Seven big Indian corruption scandals.

Here are some of the biggest in the last two decades:

2010 -- LOAN BRIBERY CASE

The case broke after a year of investigation on Nov. 24 when the Central Bureau of Investigation (CBI) arrested eight people, accusing them of bribery for corporate loans.

The arrests included the chief executive of state-run mortgage lender LIC Housing Financeand senior officials at state-run Central Bank of India, Punjab National Bank and Bank of India.

While the size of the scandal is not yet known, local media have reported it could run intohundreds of millions of dollars.

The CBI is probing 21 companies involved in India's booming infrastructure sector forlinks, but has not named them.

The bribes were allegedly paid by private finance firm Money Matters Financial Services,which acted as a "mediator and facilitator" for the loan beneficiaries, the CBI said.

Companies whose officials have been arrested have all denied any wrongdoing.Individuals arrested have not yet commented.

Government officials, including ministers, have said this is a case of individual wrongdoingand not a widespread scam.

2010 - TELECOMS LICENCE ROW

Telecoms Minister Andimuthu Raja was sacked after a report by India's state auditor saidhis ministry sold licences and spectrum below market prices, depriving the government of up to $39 billion in revenues.

The scandal swept up as high as Prime Minister Manmohan Singh, who had to explain tothe Supreme Court why he sat on a request for permission to charge Raja with corruption.

In its report, the Comptroller and Auditor General of India (CAG) also said rules wereflouted when the licences were given in 2007-08 which led to many ineligible firms gettingthem.

The CBI has launched an investigation into alleged corruption at the ministry. Nobody hasbeen charged yet and Raja has denied any wrongdoing.

The CAG said Unitech units got licences despite having inadequate capital, Swan Telecomgot a licence even though there were monopoly issues and Reliance Communications got


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undue benefits as it sought permission to offer services under the more popular GSMtechnology.

Revenue authorities have questioned Nira Radia, a top lobbyist, as part of an investigationinto whether money laundering and forex laws were broken when the licences werepurchased. Radia has denied any wrongdoing and has said she is cooperating with theprobe.

2010 - COMMONWEALTH GAMES

Allegations of corruption over the international sporting event that took place in Delhi inOctober are being investigated by several bodies including the anti-corruption watchdog,the state auditor, the CBI and a special committee set up by Prime Minister Singh.

The Congress-party led coalition government came under fierce criticism formismanagement and ineptitude over the sporting extravaganza which cost up to $6billion.

Allegations of corruption spanned a broad spectrum including issuing of contracts andpurchase of equipment -- from treadmills to toilet rolls.

India's anti-corruption watchdog has identified more than 16 projects with possibleirregularities.

The Congress party eventually sacked Suresh Kalmadi, chairman of the organisingcommittee, as secretary of the party's parliamentary wing.

Aides have been arrested and local media has said Kalmadi could be arrested once hereturns back from a foreign trip.

2010 - HOUSING SCAM

Congress party politicians, bureaucrats and military officials have been accused of takingover land meant for building apartments for war widows. The CBI has begun investigatingthe case.

Local media say apartments with a value of $1.8 million were sold for as little as$130,000 each in the apartment block, which faces the Arabian Sea in one of the world'smost expensive stretches of real estate in Mumbai.

The government has sacked the chief minister of western Maharashtra state, AshokChavan, who is a member of Congress.

The apartment block is also being investigated for several violations of norms, includingenvironmental laws and land-use rules.

The government has now effectively taken back permissions allowing owners to occupythe apartments, which are required for water and power supplies, leading to thedisconnection of these services.


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2009 - SATYAM

The founder of Satyam Computer Services, one of India's top software firms, resigned inJanuary 2009 after admitting profits were falsely inflated for years.

The fraud, estimated at $1 billion, was India's largest corporate scandal and was dubbed"India's Enron".

With clients abandoning it, shares were hammered down to near-penny-stock levels.

The government stepped in to save the firm by appointing a new board of directors andmidwifed its sale to Tech Mahindra. The firm is now called Mahindra Satyam.

The founder chairman of Satyam, Ramalinga Raju, and other officials including the thenchief executive officer and chief financial officer, were arrested under several chargesincluding fraud. The cases continue in court. The defendants have said they were notinvolved in the fraud.

1992 - SECURITIES SCAM

Several Indian stockbrokers were accused of siphoning off over 35 billion rupees ($778million) of funds, mostly from inter-bank transactions, to fuel a rise in the Mumbai stockmarket in 1992. It involved top officers of state-run and foreign banks and financialinstitutions, bureaucrats and politicians.

News of the scam led to an over 40 percent fall in shares over two months, wipingmillions of dollars from market value.

Harshad Mehta, the main accused, died in 2002, convicted in only one of the many casesfiled against him, for misappropriation of funds in a case involving the use of money fromthe bank account of carmaker Maruti Suzuki for trading in stocks.

Several bank executives were convicted for fraud in allowing bank funds to be used fortrading stocks.

1986 - BOFORS GUN DEAL

India's purchase of artillery guns from Swedish firm Bofors in 1986 was rocked byallegations that 640 million rupees ($14.2 million) -- a huge sum then -- was paid asbribes to people close to then prime minister Rajiv Gandhi to swing the deal.

The scandal caused an uproar in parliament, led to a split in the ruling Congress party andthe defeat of Gandhi in federal elections in 1989.


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Its fallout has stymied India's defence expansion, with officials for years unwilling to takedecisions on purchases that could later be probed for corruption.

Amongst the people probed were the London-based Indian business family of theHindujas, who were later acquitted by a court of any involvement.

The case has dragged on for years without any result.

Documents

Seven Big Indian Corruption Scandals