Sucheta Dalal :Don't bother with a JPC on Scam-2001 At best it would be a source of amusement at worst a waste of time (9 April 2001)
Sucheta Dalal

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You are here: Home » Column Topics » Scam 2001 » Don't bother with a JPC on Scam-2001 At best it would be a source of amusement, at worst a waste of time (9 April, 2001)
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Don't bother with a JPC on Scam-2001 At best it would be a source of amusement, at worst a waste of time (9 April, 2001)  



Congress spokesperson Jaipal Reddy is doing a great disservice to the nation by demanding a Joint Parliamentary Commission (JPC) to investigate Scam-2001. Reddy was a member of the 1992 JPC, as was Finance Minister Yashwant Sinha; so who better than them to know that a JPC serves no real purpose? It is probably the reason why the government was willing to accept Mr. Reddy’s suggestion with such alacrity.

Let us look at what happened last time. At least two-thirds of the 30 JPC members neither understood the scam nor cared to do so; they attended occasional hearings, usually surfacing when they had a specific interest in an individual or group that was being interrogated. Some them even caused a lot of merriment by snoring during the interrogations.

The entire financial system was put through enormous harassment, trying to furnish answers, in approximately 35 copies plus Hindi translations, to the questions posed by the honourable representatives of the people handpicked to be in the JPC. Many of the questions were utterly frivolous, but involved mining mountains of data and generated mounds of paper. Most of this information was simply junked by the members and a large portion of it was routinely available for a price. This circus was hidden from the Indian public under the pretext of absurd banking secrecy rules. The media was barred from the hearings and only given a carefully edited briefing at the end of each day.

The problem started with the JPC members setting out on a mission to be the financial experts, instead of concentrating on the larger policy issues of governance, regulation and supervision. The report is replete with details about specific transactions – a job that was already discharged by the multi-agency Janakiraman Committee.

Once the long and meandering hearings for data collection were over, the remaining 37 JPC sessions dwindled into mere horse-trading. Members, who had made little contribution until then, were suddenly at the centre of intense politicking, influencing who to nail and who to let off.

Finally, the JPC report paid lip services to all aspects of the scam, but played up needless detail and relegated some crucial issues to the “notes” attached to the main report.

For instance, it commented on the ‘worrisome tendency of the entire government machinery to transfer responsibility downwards’ but did not attempt to fix responsibility at the top. Also, empty righteous observations like -- “if a system is devoid of the moral quotient, or a common sense appreciation of right from wrong, of a sense of public duty particularly when entrusted with public funds, it cannot work”, only evoked contemptuous sniggers then, as it will now. After all the role of politicians in Scam-1992 as well as Scam- 2001, is a common knowledge; as is the fact that they get away unscathed every time. 

In 1992, only one Minister B. Shankaranand was implicated and forced to resign even though a dozen ought to have been in the dock. In Shankaranand’s case too, all investigations were dropped in return for him volunteering to be the sacrifical lamb. Mothballing the P. V. Narasimha Rao bribery allegation by Harshad Mehta is even more reprehensible, but more of that later.

The JPC specifically held the Reserve Bank of India (RBI) responsible for ignoring warning signals since 1986. It said: “Red alerts were ignored, reports consigned to the backburner and market intelligence treated with disdain”. This statement could well be cut and pasted in the JPC report on Scam-2001. But the Deputy governor, named in the JPC report and other officials were not touched. The Department of Supervision initially envisaged as a powerful and independent supervisory agency dwindled into just the DBOD in another avatar. It is headed by a deputy governor curiously on his second extension and unknown for stringent supervisory action.

The JPC had identified foreign banks as the main culprits of Scam 1992 and ordered “stringent penalties including suspension of licenses” and legal action to be pursued in India and abroad. No licenses were cancelled, the stringent penalties were less than a slap on the wrist and only repatriation of profits were disallowed for a few years. A few heads at the top rolled, but none have been called for evidence during the scam trial in the Special Court at Mumbai.

The most serious issues were relegated to a slew of notes attached to the report. These included Harshad Mehta’s charge of having bribed Narasimha Rao, his confession that he had bribed other politicians as well (but had no proof), the Andhra Bank-Goldstar case involving Narasimha Rao’s sons and stock broker Hiten Dalal. In connection with the bribery charge, a note by 13 opposition MPs, including Jaipal Reddy and several members of the present government had called for a detailed investigation under the Commission of Enquiry Act to be held and submitted to parliament within six months. The MPs themselves failed to follow up their demand. Allegations against Romesh Bhandari, then Governor of Tripura were also allowed to vanish even after the JPC noted his “attempts to influence witnesses and tamper with evidence” and had called his conduct “highly incriminating”. Also, despite a detailed recording of references to specific  “hawala” payoffs to various scamsters and bankers, these investigations were never pursued. An investigation into hawala dealings is clearly one can of worms which politicians don’t want to touch. 

Another aspect that was relegated to the notes and subsequently dropped was collusion of industrialists with Harshad Mehta. Reliance Industries, Apollo Tyres and United Breweries were specifically named but this trail too was dropped. After all, industrialists are as important to politicians for greasing the wheels of government and their own careers.

The previous JPC, had pulled up the CBI for failing to investigate the connection between brokers and “politically important persons”. The next JPC too will voice similar sentences and which are written and quickly forgotten. Maybe Jaipal Reddy and those demanding a JPC should first outline to the people how they will make this one different from the previous one. Preferably, they will do so on the floor of the parliament, rather than on television shows or at mob meetings. But preferably also, they will learn from the past, and realise that only a public inquiry of the sort conducted by Justice M. C. Chagla into the Haridas Mundhra episode of the late sixties really works. This time, they should get someone like G. V. Ramakrishna, who has an unimpeachable track record and the requisite experience to head such a commission.
-- Sucheta Dalal



 



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