Tuesday, August 9, 2022

India’s spy masters

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The nefarious actions of clerks and middlemen have shown the deep tentacles of powerful corporate entities within the government. Can the rot ever be cleaned up?

By Shantanu Guha Ray

AN old practice of various ministries in Delhi—doing business from hand-held files and binders tied with strings—has been used by corporate giants to garner high profits. This was evident from the recent corporate espionage case, where old methods of conducting business instead of using computers, led to important documents being stolen and then, sold. That lowly clerks could easily steal documents from India’s teeming ministries was first known during the Jain Hawala diaries.

A little over two decades after these diaries came out, a similar nightmare enveloped the Indian capital—aptly described by a television anchor as “Siege City”. This time, errand men were caught copying documents from the ministries of petroleum and natural gas, coal, power and defense and trading them for cash. Further, senior officials of corporate giants, former journalists and lobbyists were masquerading as market analysts. Who wanted the papers, many asked? “Everyone,” claimed insiders in the government. Essar wanted to know what was happening in mines because of its interests, the Ambani brothers wanted to know about each other’s business to see if anyone was getting any extra benefit from the government, Cairn and Jubilant wanted to seek information on policy issues in the energy sector, while Vedanta wanted to know almost anything and everything to do with mining in India. There were others in the fray but not named by cops because investigations are going on.


Such was the demand that collecting the documents was nearly a Rs. 100-crore business itself. “The government aimed to catch a big fish, loads came into the net,” said a top official in the home ministry.And after the first arrests in this case, India’s most politically powerful city has gone into a virtual rigor mortis mode.

In the office of one corporate giant close to Connaught Place, staffers handed over their Blackberrys to be crushed, packed and dumped into the Yamuna, a few miles away. In another office, the top brass did not take any chance and did the “handset breaking” act themselves. Once it was done, the broken pieces of handsets—memory cards duly removed—were consigned to the waste bin.

For a change, Delhi did not want to do anything remotely connected with its generation-old, use-and-discard practice of collecting official documents and throwing them—like meal napkins—once the contents were analyzed and meanings understood.
Till the arrests happened, the business was working fine, almost for two decades. Lowly clerks were offered cash beyond their salaries by consultants seeking information from various ministries about projects that were of interest to their clients.

The scam came to light when joint secretary (exploration) in the petroleum ministry Giridhar Armane tried to photocopy a document and got four copies of it. One was his, while the others were documents stolen from another department of the same ministry.

No documents existed between these clerks and middlemen, who often worked for top Indian and multinational corporations. Salaries were always paid in cash, and gifts offered during Holi, Diwali and on the first day of every year, the last one tagged: Happy New Year.
The operation worked with call center precision, with tainted clerks showing tremendous alacrity in providing documents that helped middlemen, and in turn, their clients (companies) understand the mindset of the ministry, and of course, the minister. In India, corporate lobbying is illegal, so companies gather information on government policy themselves. Worse, lack of clarity on parameters for major decisions, along with long and opaque processes, exacerbated the problem.


Consider Subhas Chandra, one of the five corporate executives arrested with seven others by Delhi Police. Till 2011, he was a typist with the personal assistant of one of the under secretaries in the Ministry of Petroleum and Natural Gas. His salary was Rs. 8,000. But when he left his job in 2011 and fraudulently acquired a business management degree before joining Jubilant Energy, the greenbacks were a little over Rs. 1,50,000 per month.
Similar is the case of brothers Rakesh Kumar and Lalta Prasad, who worked temporarily for the same ministry and along with their father, Asharam, leaked documents—for Rs. 15,000 each—to these middlemen.

The father-sons troika routinely met middlemen and executives of top companies for such work. On paper, the list looked impressive: Shailesh Saxena, manager, corporate affairs, RIL; Subhash Chandra, senior executive, Jubilant Energy; Rishi Anand, deputy GM, Reliance ADAG; Vinay Kumar, deputy GM, Essar and KK Naik, GM, Cairn India.

It was almost like insider trading, with companies knowing—in most cases—what would happen in the ministries and when. There were times when these middlemen would visit the residences of top bureaucrats and even, the minister to lobby their case. Sometimes, it worked and sometimes, it didn’t when alert ministers, suspecting such leaks, changed policies at the last moment.

“I routinely told Reliance Industries officials that I would meet them in my office, and that too, in the presence of senior bureaucrats,” former petroleum and natural gas minister Jaipal Reddy, told this correspondent weeks before he was sacked by the then prime minister Manmohan Singh reportedly under pressure from Reliance Industries Limited (RIL).

Reddy can now have the last laugh as investigators from the crime branch of Delhi Police said they would be questioning those arrested and also those with whom they were in regular touch. “In short, the superiors of those arrested will be called and questioned soon,” said Joint Commissioner of Police (Crime) Ravindra Yadav.

It was like setting more than a single cat among the pigeons.


But how did the current scam come to light? It was triggered by a panic reaction of Giri-dhar Armane, joint secretary (Exploration), who, when his errand boy was missing, rushed to make a photocopy of a document which he wanted to mark to multiple superiors. But when he pressed the button, he got four copies. One was his, while the other three made his head reel. They were documents stolen from another department of the same ministry, but kept in the storage section of the copier. When he pressed the storage button (probably by mistake), he got printouts of the other papers.

Worse, the door of Prashant S Lokhande, a director in the ministry, was found compromised about two months back, following which the ministry ordered a thorough investigation and CCTV cameras were installed. Despite this, documents were stolen from the rooms of Special Secretary Rajive Kumar, Joint Secretary (Refineries) Sandeep Poundrik, Joint Secretary (Exploration) UP Singh and Director (Exploration-1) Nalin Kumar Srivastava, among others. Who was copying, why and how? The minister was alerted and the rest was pure and simple: bait, catch and kill.

(From left to right)

But did it stop the nexus in a city where people often talk of cash and connections as easily as coffee and conversations? No. After all, those in the game, not just those interested in oil and gas, coal or highways, would not have wrapped up their high-value stores just because some were arrested.
Consider this. Highly placed sources in the Intelligence Bureau (IB) said they had information last year about how a top, soft drinks multinational had admonished its top boss in India, and those handling “government relations” for not being able to gauge well in advance that the finance minister would, in the annual budget, increase taxes on sugar used by soft drinks companies. “The middlemen working for the company also drew flak,” said one source.

IB officials in Delhi had earlier alerted the government how these middlemen, lobbyists, fixers and touts had emerged from the woodwork to contact various companies and offer all kinds of help, including court judgments.


Officials of the IB and Home Ministry, which monitored these fixers and their nocturnal activities, said they had learnt quite a bit about the modus operandi of a specialized group of niche players who only focus on the courts. “It seemed we had hit upon a new breed of fixers—the latest in the business— who specialized in courts,” said one official.

Among them was a controversial Gujarati businessman, who had a number of cases against him. He was openly contacting corporates and showing them a list of the judges he controlled over the last three years and how he could easily fix a judgment.

Over a year ago, the IB sent a secret report to the chief justice of India (CJI), saying one of his cooks was in touch with this fixer. What was fixer’s modus operandi? Through the cook, he would meticulously find out what the outcome of a particular judgment could be. It helped that the cook was educated and kept a tab on the printouts of judgments lying at home. And fixer would then contact the parties involved and tell them he could make them win, provided they paid him handsomely. The cook was subsequently discharged from the CJI’s house, but continued to live in the servants’quarters. Eventually, he found a job with another judge in the apex court.

With high stakes involved, the pressure to know the mind of various ministers is always paramount. Middlemen have been known to draw salaries, ranging from Rs. 5 lakh to Rs. 8 lakh monthly, and don’t mind operating even without an office, often meeting people in coffee shops or at India Gate lawns.

The Union Minister for Science & Technology and Earth Sciences, Shri S. Jaipal Reddy addressing at the 71st Council of Scientific and Industrial Research (CSIR) Foundation Day Celebrations, in New Delhi on September 26, 2013.


“I routinely told Reliance Industries officials that I would meet them in my office, and that too, in the presence of senior bureaucrats.” SHADY CONTACTS

In the February bust-up, as many as 12 people, including Santanu Saikia, a former journalist, and Prayas Jain, who described himself as an energy consultant but rarely spoke about issues bothering the sector on any public discourse, were arrested and kept in custody of Delhi Police.

Except for Saikia, for the other 11, it was a facepalm moment as they claimed they were innocent. Saikia, on the other hand, was not new to such scandals. He had been questioned on similar charges a little over a decade ago by the CBI and once, then Congress president Kalpanath Rai wrote a note to Saikia’s editor about how he was trying to extort cash from some members of the Congress party.

This time, he shouted to reporters that he was collecting the documents to unearth a whopping ` 10,000 crore scam and that he was being made to sign blank papers by the cops. He even raised his thumb in an apparent sign of arrogance, even as news channels—some believing him at face value—played breaking news.
What made the present scam so alarming were dual factors: the brazenness with which documents were photocopied from the ministry and their timing (the scandal was unearthed a week before the annual budget was to be presented). There were even rumors that some budget documents too were copied.

While Nalin Kohli, BJP spokesman, said: “The government will do everything to get to the bottom of the case, the documents are being analyzed”, he was quick to apportion blame to the earlier UPA government for “shielding such middlemen and powerbrokers for decades”.

But Mohan Guruswamy, a senior political analyst and columnist who once worked closely with the PMO in the 90s, said it would be better if reactions came once the papers were “analyzed and their importance estimated”. “Till that happens, one needs to exert caution. But the way such documents were copied was totally disgusting. It seemed another office was in operation,” he said.


In the center of the present scam are two companies—RIL, India’s largest private sector company, and Reliance ADAG, which is into telecom, energy, entertainment, finance and now, defense production. This was not the first time Reliance officials have faced allegations of leaking confidential government information. RIL has in the past too drawn flak for being favored by governments to earn whopping profits, either through high gas price or partial sale of gas assets.

Way back in October 1998, an inquiry into the theft of a chopper by Romesh Sharma, an alleged aide of Dawood Ibrahim, had led the police to the office and New Friend’s Colony residence of V Balasubramaniam, group president of Reliance. Highly sensitive documents were recovered from his residence, including one from a cabinet meeting, another on the minutes of a meeting on disinvestment and papers on customs and excise duties for the oil and oil products sector. The documents were faxed from Balasubrama- niam’s office to a Mumbai number, investigators claimed.

Eventually, a criminal case was filed against Balasubramaniam and two senior RIL executives under the Official Secrets Act, which carries a minimum prison sentence of three years. The slugfest continued for years in the court, and eventually, the Supreme Court rejected Reliance’s appeal in May 2011. A sessions court framed charges in April 2012, nearly 14 years after the FIR was filed but the trail is still hanging loose.
This time, the cops claimed it had evidence of telephonic conversations between the arrested RIL official and top company honchos in Makers Chambers IV in Nariman Point office complex.


What was also intriguing was that the arrest of the RIL official happened on a day when the Mumbai-based conglomerate announced it had appointed Maheshwar Sahu, a former IAS officer from Gujarat, as an independent director. Sahu, a Modi loyalist, had handled the PM’s pet projects like “Vibrant Gujarat” and other NRI summits.
Obviously, an image makeover process was on within RIL—its shares tanked in NSE Bluechip Index by 3.2 percent when the arrests were made. RIL is in international arbitration with the petroleum ministry over issues including implementation of higher gas prices and cost recoveries.
RIL has an image to maintain and an issue to handle: It lobbied hard to double the domestic price of gas from $4.2 a unit to $8.4. The price, post elections, was increased to only $5.6, a blow to RIL.

Now, that the dust seems to have settled on the arrests and those in police custody have to do the rounds of courts, the central government—if it still maintains that there was a deep-rooted espionage attempt—should doubly clarify its stand on the documents heist.

Taking the most of it home is none other than Prime Minister Narendra Modi, whose image had taken a dip with BJP insiders and the Sangh Parivar, both of whom claimed the PM lacked action. But for now, the prime minister has been able to convince critics that his government is working better than the previous ones.
In one stroke, Modi has sent a message to both corporate giants and the media: Back off from the corridors of ministries.

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