Great fortunes will continue to be built—by fleecing the taxpayers
Behind every great fortune, wrote the French author Honore de Balzac, lies a great crime—or a great scam, which is more appropriate in the Indian context. The Nirav Modi scandal exemplifies this truth.
Nirav Modi dreamed big and grand—and found the entire universe of the Indian financial system conspiring to make him successful and rich
Nirav Modi is like the villain, also a diamond billionaire, in James Bond’s Die Another Day. Bond described his rise as ‘from nothing to everything in no time.’ Ditto with Modi whose journey has been sponsored by the Punjab National Bank, the entire bank. In fact, not just the entire bank—surely not just the two low-level employees as we are told—but the entire system seemed to be working for Nirav Modi. For one has to be a moron to believe that former deputy manager Gokulnath Shetty and single window manager Manoj Kharat could help the disgraced diamantaire swindle PNB out of Rs 11,400-crore.
In a way, the swindle is bigger than that of Vijay Mallya’s, not just in terms of magnitude but also of the sheer time span involved. We must remember that, after all, is said and done, Mallya was a prominent businessman who got huge loans without collaterals for Kingfisher Airline which later went bust. But, right from day one, everything was known about the loan; the disbursal was also criticized from the beginning.
In the Nirav Modi case, on the other hand, nobody even knew for almost eight years that such a humungous scam was happening. Had Shetty not retired last year and continued for, say, 20 years, he might have made the Prime Minister’s cashless dream true at least in one sector—banking! For it is not just the PNB that is affected; dozens of other banks too are said to be facing the heat. The amount involved in the scam too is likely to be far more Rs 11,400 crore.
There are a few conclusions that we can draw from the massive fraud. First, it could and did happen with the collusion, cowardice, or egregious incompetence of a whole lot of people—top PNB officials and the board, auditors of various persuasions, the Ministry of Finance, the Reserve Bank of India, Parliamentary committees, the Chief Vigilance Commission, the Comptroller & Auditor General, the Serious Frauds Investigation Office (SFIO), et al.
It was almost like the entire system was working for the benefit of Nirav Modi—for reasons pertaining to venality or ineptitude—but working it certainly was for the gilded fraudster. In The Alchemist, Paulo Coelho wrote the famous line: “when you want something, all the universe conspires in helping you to achieve it.” The line that inspired a successful Shah Rukh Khan-starrer.
Nirav Modi dreamed big and grand—and found the entire universe of the Indian financial system conspiring to make him successful and rich. Of course, at the expense of PNB.
The Nirav Modis and Vijay Mallyas will keep squeezing them and the taxpayers will keep recapitalizing them
The second conclusion that we can draw from the latest scam is that the Bharatiya Janata Party government is at least as much responsible as, if not more than, its predecessor. There are credible of the fraud being reported to the Economic Offences Wing in Mumbai and the SFIO way back in 2015 and the Prime Minister’s Office in July 2016. Evidently, the powers that be ignored these complaints. At any rate, no action was taken against Nirav Modi and his uncle Mehul Choksi, promoter of the Gitanjali group.
Third, the arguments offered by BJP spokespersons that the scam was the result of Congress rule and that the Modi regime had nothing to do with it sound reasonable only to the bhaktas, but the number of non-bhaktas is much larger. You can’t keep blaming the Congress for everything wrong in the country; of course, the grand old party did bad things, and this is the reason it is out of power. But what has the Modi government done, people are asking.
Fourth and last, the only way out is privatization of public sector banks (PSBs). Politicians, of the BJP or the Congress, will be politicians and continue to favour their cronies in the corporate world; auditors, regulators, oversight bodies, etc., will remain as corrupt and inefficient as they are now. So there shouldn’t be PSBs in the first place. The Nirav Modis and Vijay Mallyas will keep squeezing them and the taxpayers will keep recapitalizing them. The government should just get rid of them, but it is unlikely that it would.
After all, Narendra Modi believes in big state and socialism. Despite all his criticism of Jawaharlal Nehru, he remains wedded to the two cardinal principles of the first prime minister’s philosophy—socialism and non-alignment. Paradoxical though it may sound but true it is nonetheless that Modi is a saffron, Nehru. So, we shouldn’t hope for any redemption. Great fortunes will continue to be built—by fleecing the taxpayers.
Note:
1. The views expressed here are those of the author and do not necessarily represent or reflect the views of PGurus.
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the article is plane finger pointing without understanding facts. the failure is at the micro level and not the macro level. In case the incumbent government was involved (macro level), this scam would never have come out in the open. The PMO receives 1000s of letters and complaints each day. Many such complaints are mere allegations without substantive proof. They cant be acted upon. is the author suggesting that the complaints sent to PMO regarding PNB fraud was with suitable proof to make it actionable? in that case he should display a copy of the same on this portal. at the micro level the SFO failed to act upon the complaints provided the evidence was action worthy. there was an internal risk audit failure at PNB where advisories given by RBI on potential misuse of SWIFT system were ignore. I do agree that there are many mistakes that the PMO or the PM has done, but to blame the PMO for everything under the sun is intellectual incomptence. need to grow up.
The Ghandhi did wrong when he selected Nehru despite others selected Sardar Patel to be the Prime Minister of India…now PM Narendra Modi is doing the same taking Arun Jaitley as Finance Minister and denying the most deserving and competent individual Dr. Subramanian Swamy …. Modi will cost dearer to BJP in next parliamentary election..
It is beyond that Narendra Modi & his entire team are equally responsible for the PNB & Choksi scam & money laundering. It is disgusting not a single tax payer has been honored since independence but successive govt has treated the financial criminals with kid gloves. Scams like Telgi happened through patronizing of politicians
I am unaware if citizens of India can petition Supreme Court against the Parliament for its continued failure of monitoring & making of laws & make them pay for the loses or money lost by a honest tax payer.
Narendra Modi & Arun Jaitely should be ashamed for themselves for inspite of advanced warnings they did nothing, giving raise to doubts that they are in nexus for the corrupt money.
The way indian intelligentia are reacting and also the author a journalist, do not seem to have any idea of the PNB case. They are parroting what PNB has stated without analysing the issue. LOUs issued are for 11500 crores. There can never be 100% default on LOUs and presuming default is 70% ( very high and if foreign bank manager is sleeping ) The party has to pay about 8000 CR. Let us check worth of the party.
1 5900Cr stocks seized by ED
2 1000 Cr properties held by the family
3 At 2% commission PNB earned about 1000 Cr commission in 6 years.
4 1000 cr factory assets and raw diamonds in Surat.
5 Rental deposits for show rooms and their decor 500Cr
Then where is fraud . No forgery documents were submitted by party. At best this is a case of irregularity, which is commom in EVERY industry in india. In such a case are all industrialists frauds ? who are wealth craters in india —— only industrialists/ manufacturers and agriculturists. Who are parasites not creating wealth —— politicians, beurocrats, advocates, journalists, auditors and teachers.
Running industry in india is not a joke as every second person in power is a rogue. My advice to NRIs is dont invest in india .Even Bangladesh is better. The Indian Bank association have blamed PNB for the mess and letter by NM explains his version. In fact PNB MD is to be punished for not being smart to recover the irregular money. The riskiest job in india is of a bank manager. If you dont give a loan, public/ politician will thrash you and if you dont recover the loan MSM and RBI will thrash you. This is reality.
Unnecessarily criticising Modi will only strengthen the Congress, communists, Lalu, Mulayam,Mamta etal.; none of which is one hundredth of Modi in vision or integrity. The mother of all scams is Congress and Modi is the only hope in spite of all his deficiencies and half-successes. The PSU rot (Banks and all other organisations) is too gigantic for one man to clean in four years. The Public Sector is a hybrid of Private sector and the government style of functioning. It was expected that following Mendel’s laws of inheritance it will acquire the best characteristics from both the systems- business like quick decision making of private sector and prudence and welfare from govt. Unfortunately for most of PSUs, opposite has happened. They have acquired worst characteristics from the two systems resulting in all this mess. Strong Audit and Vigilance are the only answer. CA institute of India needs to introspect why external auditors are unable to detect major frauds. The internal auditors of every PSU are just a sham. PSU top managements have very tight control over them and they just fall prey to threats or allurements. Off course spirited public men too need to keep their eyes open and blow whistle wherever necessary.
It is not about giving advantage to Khangress. Modi also should get shock of his life for being equally responsible & irresponsible monitoring mechanism that were happening & his finance minister Mr. Arun Jaitely is a cunning man without any morals protecting tax criminals.
Narendra Modi should be also be made responsible. He should be escaping the criticism. What stops him to penalize the auditors & other Babu’s ?? Can he not change the rules or remove or transfer the incompetent ?
Our rulers of the day should keep it in mind that the common people are representatives of God / Easwar Swaroopam. It may appear to the rulers of the day that the common people can’t do anything against them, the mighty Govt single handedly. Once they make up their mind to throw out a corrupt Govt, which is NOT liked by them, then its like tsunami, nothing will remain. India is witness to 1977 revolution after Emergency and 2014 after 10 year long Sonia guided UPA’s corrupt rule. They will vehemently vote against the unwanted ruler with vengeance. Rulers should never harvest the displeasure / unhappiness of their innocent subjects. Congress Party is highly corrupt from Nehru days, they have destroyed each and every institution systematically through their corrupt means, they have institutionalised corruption as a way of life in each and every institution in all possible ways. They have thoroughly corrupted themselves brazenly, corrupted their alliance partners and they have also corrupted their principal opponent – i.e. BJP. But, it is for the BJP to stand up call to their aid their will power and tread on the righteous path. All corruptions were started in Congress Party rule, OK admitted. BJP is in Central Govt since May 2014, what where you doing all these years. Why have you NOT taken any effective action to stop it – to stem the rot / corrupt practice despite having all the law enforcing agencies like MOF-Banking, RBI, MCA_SFIO, SEBI, CVC, ED at your disposal – under your control. In fact, the fradulent way of issuing LoUs by PNB for Nirav Modi got multiplied in 2017, only during BJP / NDA rule is a bitter truth. What is needed is thorough supersession / over haul of RBI Board and all Bank Boards. Men of character having competence should be appointed as CMD / ED in all the PSBs without any political interference. No Reservation. Only Merit alone is the criteria. All the law enforcing agencies JOINTLY chase all the thieves like Lalit Modi, Vijay Mallya, Nirav Modi, Mehul Choksi, etal and their active & passive supporters in the present Govt / previous Govt, retired bureaucrats and bring back the looted money. Otherwise this will go on for ever endlessly.
Shri Jagmohan, Former Union Minister for Communications, Culture, Former Lt Governor of Delhi and Former Governor of J&K, has quoted an English translation of German poet Erich Fried’s poem in his book MY FROZEN TURBULENCE IN KASHMIR, which aptly conform to the present situation and the same reads as under :
IT HAS HAPPENED & IT GOES ON HAPPENING & WILL HAPPEN AGAIN, IF NOTHING HAPPENS TO STOP IT.
THE INNOCENT KNOW NOTHING BECAUSE THEY ARE TOO NOVICE
THE POOR DO NOT NOTICE, BECAUSE THEY ARE TOO POOR.
AND THE RICH DO NOT NOTICE, BECAUSE THEY ARE TOO RICH.
THE STUPID SHRUG THEIR SHOULDERS, BECAUSE THEY ARE TOO STUPID.
AND THE CLEVER SHRUG THEIR SHOULDERS, BECAUSE THEY ARE TOO CLEVER.
THE YOUNG DO NOT CARE, BECAUSE THEY ARE TOO YOUNG.
AND THE OLD DO NOT CARE, BECAUSE THEY ARE TOO OLD,
THAT IS WHY NOTHING HAPPENS TO STOP IT.
AND THAT IS WHY IT HAS HAPPENED AND GOES ON HAPPENING AND WILL HAPPEN AGAIN.
Financial misdeeds and other Painful things keep on happening in our Country with sickening frequency, because no one is really concerned about the fundamental issues of Probity in public life, National Integration, National reconstruction of social, cultural and economic rejuvenation, on the solid foundation of which alone a new moral and ethical order and a new pattern of politics and administration, suited to our requirements, could be made.
Sir your statement on LOUs is incorrect. NO new LOUs were issued in 2017 and those issued in 2011 were RENEWED and PNB earned hefty commission which is in banks books.
The reason why irregularities are happening in our society is because it has turned immoral.We live in a society where people do not care for society but self and family.
Modi indeed is a Nehru reincarnation! With advisors like Jaitleyes, Adhias, Mishras etc he does not any enemies to destroy him along with the dreams of right wing nationalists. I am very jittery that he is treading a dangerous path and some wise kid needs to remind that he is wearing no clothes.
Well directed article sir. Though nobody says it’s kind of Indiragandhi’s emergency days. We should take oath as born Mad Modi Bhakths. Else we are Anti national and Anti Hindu!!! Jai jerker jai mad Modi !!!