Major scandals involving high level public officials have shaken the Indian public service in recent years, with politicians and public servants regularly caught accepting bribes or mismanaging public resources. Except for the Satyam Computers scandal which was largely a creation of its chairman, the following major scams testify to it. This suggests corruption has become a pervasive aspect of Indian politics and bureaucracy.
1. Mega Black Money Laundering Scam
Cost: Rs. 50,000 Crores
Face of the Scam: Hassan Ali Khan
This scam of ultra high magnitude came into lime light when Indian businessman was arrested on money laundering charges which was to the tune of Rs. 39,120 crores. The revelation about the huge sums of money being stashed away in Swiss banks underscored and exposed the problem that has been the focus of Baba Ramdev’s activities in recent years. The government is only now appear to acknowledge that money laundering is a real problem.
2. CWG Scam
Cost: Rs. 70,000 crores
Face of the Scam: Suresh Kalmadi
Allegations of corruption over the 2010 Commonwealth games inDelhiare being investigated by several bodies including the CBI and a special committee set up by the Prime Minister. Allegations of corruption spanned a broad spectrum including issuing of contracts and purchase of equipment – from treadmills to toilet rolls. The preparation for the sporting extravaganza consumed a huge sum of about Rs 70,000 crore. It was always in lime light for various allegations such as child labor, nepotism and favoritism, payment to non-existent parties, willful delays in execution of contracts, besides the highly inflated financial costs.
Just imagine – liquid soap dispensors were rented for Rs 9,379 a piece , operating expenses escalated from Rs 399 crore in December 2002 to Rs 1,628 crore; finally, medical equipment including tread mills were brought or rented at way past the asking rate. Like any other scams in the past, the games scam involved a large network of politicians, bureaucrats and corporates acting in collusion.
The chairman of the organizing committee, Suresh Kalmadi, and his aides are in jail and the investigation is going on. Delhi CM is also facing heat of adverse remarks in Shunglu committee’s report.
3. 2G Spectrum Scam
Cost: Rs 176,000 crore
Face of the Scam: A. Raja & M. K. Kanimozhi
Telecoms Minister Andimuthu Raja was sacked after a report byIndia’s state auditor said his ministry sold licenses and spectrum below market prices, depriving the government of up to USD 39 billion in revenues. The Comptroller and Auditor General of India (CAG) said rules were flouted in spectrum allocation in order to give benefits to several ineligible in 2007-08. The heat of the investigation reached even the PMO which had to explain to the Supreme Court why PM sat on a request for permission to charge Raja with corruption. The CBI launched an investigation into alleged corruption at the ministry and arrested A Raja. The investigation is being carried out under direct supervision of the Supreme Court.
Several telecom companies are also under CBI’s scanner. DMK MP Kanimozhi is also in Tihar jail and another DMK minister Dayanidhi Maran had to resign recently. Maran was under pressure to quit after CBI accused him of forcing the promoter of Chennai-based telecom company Aircel to sell his firm to a Malaysian company in 2006, when he was Telecom minister.
The scam became bigger with new revelations of the involvement of politicians, bureaucrats, corporate personalities, media persons and lobbyists.
4. Adarsh Housing Scam
Cost: Rs 18,978 crores
Face of the Scam: Ashok Chavan and Politicians
Adarsh Housing society scam is a typical example of nexus among politicians and bureaucrats, this time for land grab. Congress party politicians, bureaucrats and military officials have been accused of taking over land meant for building apartments for war widows. The CBI began investigating the case when pressure was mounted by opposition parties in Parliament.
Local media say apartments with a value of USD 1.8 million were sold for as little as USD 130,000 each in the apartment block, which faces theArabian Seain one of the world’s most expensive stretches of real estate in Mumbai.
SO far only Maharashtra CM, Ashok Chavan, has been sacked and the CBI is probing for several violations of norms, including environmental laws and land-use rules. Some vital files related to the case have gone missing – typical of cases involving ruling politicians.
5. Scorpene Submarine Scam
Cost: Rs 18,978 crores
Face of the Scam: Ravi Shankaran
Exposed in 2005, the Scorpene deal scam has gone down in history as one ofIndia’s largest bribery corruption scandals, in which Rs 500 crore is alleged to have been paid to government decision makers by Thales, the makers of the Scorpene submarine. The amount was channeled via middlemen such as Abhishek Verma. In the scandal, the prime accused, Ravi Shankaran was selling secret Navy documents to Thales. In 2005, the Indian government had approved the 19,000 crore submarine deal with the French company. The purchase of six Scorpene submarines cost the Indian government a lot more than its actual price. Scorpene submarines are now being built inIndiaunder a technology transfer agreement that was part of that contract.
6. Stamp Paper Scam
Cost: Rs 20,000 crores
Face of the Scam: Abdul Karim Telgi
The Stamp Paper scam was perhaps the most unusual scam in modernIndia. Abdul Karim Telgi, a former fruits and vegetables seller, duped the nation of crores of rupees by printing fake stamp papers. His counterfeiting career began with fabrication of fake passports after which he ventured into selling fake stamp papers to banks, insurance companies, foreign investors, share broking firms and bulk purchasers. His accomplishes included police officers, government employees, and politicians.
The swindle exceeded Rs 20,000 crore and covered 12 states. The Telgi scandal had political implications; a narco test allegedly revealed the involvement ofMaharashtra’s political heavy weights like Sharad Pawar and Chhagan Bhujbal.
Telgi was convicted in 2007 and sentenced to 13 years of rigorous imprisonment and fined Rs 202 crore. Forty-two of his accomplices were also sentenced to six years rigorous imprisonment.
7. Bofors Scam
Cost: Rs. 400 million
Face of the Scam: Ottavio Quattrocchi
The Bofors case has been one of the highest-profile and longest-running criminal investigation inIndia. In the 1980’s, the then Prime Minister Rajiv Gandhi and several other officials were accused of receiving kickbacks from Swedish arms manufacturer AB Bofors for winning a bid to supply India with 400 howitzers. The scale of the corruption was far worse than any thatIndiahad seen before, and directly led to the defeat of Gandhi’s ruling Congress party in the November 1989 general elections. Top politicians like Rajiv Gandhi and S.K. Bhatnagar and high profile names like Win Chadha and the Hinduja family were accused of “receiving kickbacks. Italian businessman Ottavio Quattrocchi, was the prime accused in the scandal and was chased by the CBI for years.
Its fallout stymiedIndia’s defense expansion for years, with officials unwilling to take decisions on purchases for fear of later being probed for corruption.
8. Fodder Scam
Cost: Rs. 950 crores
Face of the Scam: Lalu Prasad Yadav
Popularly known as “Chara Ghotala”, this isBihar’s most famous scam in recent years. For over two decades, the officials and politicians of the state colluded to embezzle funds worth Rs. 950 crores by fabricating vast herds of fictitious livestock for which fodder, medicines and animal husbandry equipment were acquired. The swindle allegedly involved chief ministers Jagannath Mishra and Lalu Prasad Yadav; the later also spent some time in jail. The case is still going on.
9. Hawala Scam
Cost: Rs. 80 crores
Face of the Scam: L K Advani / P V Narsimha Rao
The Hawala scam was a $18 million bribery scandal and came in the open in 1996. It involved payments allegedly received by country’s leading politicians through hawala brokers. It was probably the first scam that gave the public an idea of the loot of national treasure at the hands of the top politicians. The scam revolved around the payments politicians received from hawala brokers, who fund drugs and terrorism around the globe. Many prominent politicians like LK Advani, Arjun Singh, Yashwant Sinha, Kalpnath Roy, VC Shukla, Madhavrao Scindia, Sharad Yadav, Buta Singh, Natwar Singh and Madan Lal Khurana were indicted in this case, but no action was taken against them due to lack of hard evidence.
List of the accused included Lal Krishna Advani who was then the Leader of Opposition.
10. Satyam Scam
Cost: Rs. 14,000 crores
Face of the Scam: B. Ramalinga Raju
Exposure of the biggest corporate scam (at about USD 1 billion) led the founder Chairman of Satyam Computers, Ramalinga Raju to resign in Jan 2009 after admitting profits were falsely inflated for years. Raju admitted about $1 billion, or 94 percent of the cash on the company’s books was fictitious. “What started as a marginal gap between actual operating profits and the one reflected in the books of accounts continued to grow over the years,” said Raju. “It was like riding a tiger, not knowing how to get off without being eaten.”
It 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 and orchestrated its sale to Mahindra group. The firm is now called Mahindra Satyam. Several officials were arrested along with Raju under various charges including fraud. The cases continue in court.
11. Stock Market Scam
Cost: Rs. 3,500 crores
Face of the Scam: Harshad Mehta (“Big Bull”)
Several Indian stockbrokers were accused of siphoning off over Rs 3,500 crore of funds, mostly from inter-bank transactions, to fuel a rise in the Mumbai stock market in 1992. It involved top officers of state-run and foreign banks and financial institutions, bureaucrats and politicians.
Market crashed when the news of the scam broke out, wiping millions of dollars from market value. Harshad Mehta, the main accused, died in 2002. He was convicted in only one of the many cases filed against him, for misappropriation of funds. Several bank executives were convicted for fraud in allowing bank funds to be used for trading stocks.
12. Madhu Koda Scam
Cost: Rs. 4,000 crores
Face of the Scam: Madhu Koda
In October 2009, the Enforcement Directorate (ED) charged former Jharkhand CM Madhu Koda with money laundering to the tune of over Rs 4,000 crore. Koda is accused of possessing assets disproportionate with his income and for alleged money laundering. Koda’s declared assets in 2005 when he became Chief Minister of Jharkhand was just 12 lakhs. In less than four years he established a business empire that reached beyond India, to Thailand, Indonesia, Singaporeand Dubai. His assets included hotels, three companies in Mumbai, property in Kolkata, a hotel in Thailandand a coal mine in Liberia.
This one-time labourer has 1,800 bank accounts all over the globe. Investigators said that most of Koda’s assets were held in the name of his main associates: Vinod Sinha of Chaibasa (Jharkhand) and Sanjay Chaudhary ofJamshedpur. Presently, Madu Koda is spending his time at the Birsa Munda Central Jail at Hotwar.
13. Cement Scam
Cost: Rs. 30 crores
Face of the Scam: A R Antulay
A R Antulay, the Chief Minister of Maharashtrawas convicted of money extortion from the Mumbai builders in the form of donations to Indira Gandhi Pristhan trust, one of several trust funds he had established and controlled, in exchange for receiving more cement than the quota allotted to them by the Government.
14. Nagarwala Scam
Cost: Rs. 67 Lakhs
Face of the Scam: RS Nagarwala
This probably is the most dramatic scandal – voice of the then PM Indira Gandhi was mimicked to withdraw funds from bank. In March 1971, the former army captain, Rustom Sohrab Nagarwala, then attached to Indian intelligence or R&AW, mimicked the voice of Indira and defrauded the State Bank of India, Parliament Street branch, New Delhi, for 60 lakhs presumably to be given to the Mukti Bahini in its guerrilla-liberation campaign from East Pakistan.
The fraud was discovered when the chief cashier, Ved Prakash Malhotra went to the PMO for a receipt of the withdrawal. Nagarwala was nabbed for “mimicking the voice” of the PM and the money was recovered on the same day. The opposition parties tried implicating Indira Gandhi and alleged that it was not an isolated case. The case took a mysterious angle when the investigating officer, D. K. Kashyap, of the case was killed in a car attack in 1973. Nagarwala was sentenced to four years and died in prison in the same year – likely due to deliberate neglect of his ill-health, as pointed out later in an official enquiry.
The inquiry commission set up by Janata Party in 1977 raised more questions then solving the mystery. Incidentally, Indira Gandhi did not have an account in the said SBI branch.
15. Mundhra Scam (1957)
Cost: Rs. 1.2 crores
Face of the Scam: Mundhra
This was the first high profile scandal where in 1957 a highly ambitious business, Haridas Mundhra got the government-owned Life Insurance Corporation (LIC) to invest Rs. 1.24 crores in the shares of his six troubled companies: Richardson Cruddas, Jessops & Company, Smith Stanistreet, Osler Lamps, Agnelo Brothers and British India Corporation. The investment decision had bypassed the LIC’s investment committee, which was informed of this decision only after the deal had gone through. In the event, LIC lost most of the money.
The irregularity was highlighted in 1958 by the son-in-law of Nehru, Feroze Gandhi of the Indian National Congress party, who represented the Rae Bareli seat in the Parliament of India. It was a matter Nehru wished to handle quietly so that the government would not be shown in poor light.
Incidentally, it was Feroze Gandhi’s initiatives that led to the formation of LIC through the Life Insurance of India Act of 1956, under which 245 firms were nationalized and consolidated into LIC. The scandal also became high profile due to tense relation between Nehru and Feroze Gandhi. Mundhra was sentenced to 22 years in prison. The case also compelled T.T. Krishnamachari to resign as finance minister.