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.
1. The views expressed here are those of the author and do not necessarily represent or reflect the views of PGurus.