Former Prime Minister Deve Gowda refers to the beleaguered liquor baron Vijay Mallya as the ‘son of Karnataka’. This brazen appeal to the chauvinistic elements in his native territory can be construed as all the Kannadigas should somehow protect the charming but infamous adventurer, who had done no wrong, except for pocketing an astronomical sum of public money.
My case is not that there had been no Mallyas earlier in our country. However, as citizens of India living contemporaneously with this raider of banking institutions, it is our duty to bring him to book. Posterity will not forgive us if we don’t.
There is no point in comparing Mallya with Lalit Modi of IPL fame, who is also holed up in the U.K. While both were equally flamboyant with no respect for law, the one associated with cricket is a small change compared to the high flying (pun intended) swindler of banks.
Political Culpability
There are a few fundamental presumptions about the Mallya case which can hardly be challenged. The one that stands out is that he could not have received such astronomical munificence without political support across the spectrum. There are many public sector bank chairmen who are political appointees.
They feel grateful to bigwigs in public life, who wield enormous clout, both inside as well as outside office. This is intriguing, because each such appointee is an undisputed professional with a good track record in financial management. If he or she wilts under political pressure, it is a case of ambition triumphing over reasoning and prudence. Like those in high places in government, none in the public sector banks wants to retire gracefully and vanish from public life and expects a reward from government for ‘good’ behaviour.
Who Let Mallya Out
- Vijay
Mallya could not have received huge sums as loans without political support
across the spectrum.
- Even
the bankers were part of this conspiracy as most of the public sector bank
chiefs are political appointees.
- If
the lending banks such as the IDBI and SBI had been more proactive, they could
have raised the alarm earlier as well.
- The CBI and ED need unstinted support from the
North Block which houses both the Home and Finance Ministries.
- Some precedent should be set so that potential offenders understand that, in the long run the law will get them.
Where Banks Faltered
If the lenders-especially the IDBI and SBI- had been more proactive, once CBI came into the picture suo motu –mind you no bank was willing to bell the cat- Mallya’s goose could have been cooked, and he could have been prevented from leaving home shores. A telephone call from the Chairman of one of the big banks to the CBI Director would have revealed the dimensions of Mallya’s misdeeds and his incapacity to repay his loans.
I look upon this omission and indifference as grievous as the sins of the unrepentant defaulter, who is cooling his heels, possibly in fashionable Mayfair in central London. I will be dismayed if heads do not roll under the auspices of the RBI. Many bank experts tell me that the argument that demands of business dictated liberal and uninterrupted advances to Mallya is specious. Greening of a loan was permitted only upto a limit.
A shrewd banker who has his ears close to the ground knows precisely when to stop being generous. In this case, that did not happen. Our bankers are not dumb. They merely succumbed to political pressure.
Once they
realised their mistake, they were neither honest nor courageous enough to
withdraw and go for the kill to proceed against Mallya. This is as simple as
that.
What Investigating Agencies Should Do
I am happy that both the CBI and ED are active. The two outfits should focus on two questions: Was there an irregular diversion of funds received from bank to a project other than what the conditions of a loan specified? Did the officials of any of the banks in question receive any personal benefits from Mallya or his associates that proves a quid pro quo? The CBI and ED have therefore their jobs cut out for them. They need unstinted support from the North Block which houses both the Home and Finance Ministries.
We should not only get the man to face trial in India. We should also identify and seize all his resources in order to make good the loss to the public exchequer. This is a tortuous process. International criminal law and the UK laws are extremely kind to the fugitive from justice. Otherwise, how would you explain the prolonged holiday that Lalit Modi is enjoying?
Nabbing Mallya
Mallya will resort to every trick in the trade of evasion from law. We need to outwit him, so that potential offenders understand that, however mighty they may be, the law will get them ( the arrest of Chagan Bhujbal for money laundering is an auspicious beginning).
Rising effectively to Mallya’s challenge will need two things. We need to closely monitor his activities wherever he is. Without such intelligence and feedback we cannot counter all the contentions he may make to courts in the UK and other countries, as also at home. Specifically, we have to identify all that he owns - in his name or benami - so that the process of recovery is facilitated. Many fraudsters get away by proving that they are paupers and have no ability to repay even a penny. My anxiety is that this should not happen here.
I want to make it clear that I am not for any action against Mallya that the law does not permit or which smacks of malice or vengeance. We should not do anything that even slightly violates human rights or rules of civilised behaviour. I am however for all coercive steps that could help replenish the denuded public coffers.
(The writer is a former CBI Director, who was also a member of the RBI’s Bank Frauds Advisory Board.)
Also read:
CBI Will Probe 5 Lakh Transactions Made by Mallya Using KFA Loans
Mallya Mess: Nationalised Banks, Not Crony Capitalism the Villain
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