Smear campaign by politicians not wanting to tackle corruption - Straight from the Hip by J Mulraj
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21 APRIL 2011


A dirty smear campaign by venal politicians is on, to malign two prominent members of the crusade led by Anna Hazare, both lawyers, in a bid to derail the anti corruption movement. The following conclusions are inescapable:

  • Politicians of all parties have no desire to tackle corruption; all of them are part of the smear campaign.

  • They are feeling threatened enough to pull out their bag of dirty tricks.

  • The speed with which the accusation of favour in allotment of land to the lawyers by the Government of Mayawati was made indicates that the Government uses such information not for pursuing wrongdoing but only as weapons to be pulled out whenever the need arises. When, e.g. the Congress Government in Maharashtra came under attack in the Adarsh scandal, it quickly pulled out files and leveled charges against the BJP Government in Karnataka. If all such information was available to both sides, and kept under wraps awaiting an appropriate time to attack, it only means that there is no intent to curb wrongdoing, but only to use information for self serving political ends.

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How should people respond? The purpose of such smear campaigns is the same which the British used - divide and rule. If we, as concerned citizens, are serious about tackling corruption at the topmost levels, we must reject the smear campaign and say - we don't care if the Bhushans have been allotted land cheaply and will not let that derail the move against corruption and let the pot stop calling the kettle black!

The Supreme Court is now more active in its fight against corruption and more willing to take on the people abetting it. Last week it denied bail to five corporate executives from the firms of Unitech, DB Realty and Reliance Communication, some of whom were executors rather than planners. During the hearing of Hasan Ali's case, the Supreme Court asked if the Government was sleeping. It has made no progress in pursuing accounts in Swiss banks; barring Hasan Ali it has not investigated any other.

In the 2G telecom scandal, the Government appears as if it will take action; as per news reports a chargesheet will be filed by the CBI against Kanimozhi, the daughter of the DMK supremo. This could unnerve markets if it leads to a political backlash. But will the investigation lead anywhere? Or will, as has happened countless number of times, the case be dismissed because the investigating agency, under Government control, puts up a (deliberately) shoddy case?

The Telecom Minister has opened up two cases both involving Tatas. He is questioning the basis of sale of VSNL to Tata Communication, on the ground that sale of surplus land of VSNL would benefit the group. However, the surplus land has been initially sequestered and its sale benefits minority shareholders, and the Government, but not Tatas. In fact, the Minister should be asking why it has not yet been sold.

He is now, strangely, wanting to re-open the sale of its 49% stake in Idea, by the Tata group to the Birla group. This makes little, or no, sense. One doesn't know how India will grow at 8.5% GDP, and 9% in the next 5 year plan, if decisions are continually re-opened for no good reason.

Such growth would throw up savings. India, with its 35% household savings rate, generates a large enough pool of savings to fund a lot of its investment. However, most of the savings goes into bank deposits. The mutual fund industry, which would generate superior returns, had seen some growth but this has now been stymied. As a result of a SEBI order disallowing payment of upfront brokerage to distributors, (because part of the brokerage was being kicked back to the investor), about 50,000 distributors, nearly half the total, have decided not to sell mutual funds and have not filled in the KYD (know your distributor) forms. The move to stop brokerage to distributors is myopic. At this stage of growth of the mutual fund industry it is necessary to grow assets so that investors get a better return than obtained in bank deposits (whose interest rates are less than inflation rates). At a date far in the future, when the industry had become popular enough, SEBI could have then asked investors to pay the brokerage to distributors. Not now.

The good news is that the monsoon is expected to be normal again.

In corporate news the AV Birla group bought a Swedish pulp maker for $340m, its second acquisition after it picked up the chloro chemical division from Kanoria Chemicals for $ 184m.

In corporate results, TCS came out with better than expected numbers, with Q4 profits up 23.3%. For the year ended March 2011, Indusind Bank's net profits were up a whopping 75% to Rs 171 crores and Yes Bank's, a much larger bank, were up 52% to Rs 727 crores. PFC showed an 11% rise in net profits to Rs 2618 crores and is expected to make a follow on offer soon. Interestingly, PFC was established in 1986, and its net profit is nearly 4 times that of IFCI, also a financial institution, established in 1948. This was thanks to continuous interference by the Government in IFCI's lending policies, directing them to lend to favoured companies, which nearly resulted in the demise of the institution. Fortunately, it has been revived.

Vodafone is likely to make an IPO in India, but if it wins the tax case. This is a precedent setting case. Until this case, offshore acquisition of controlling interest in a company with assets in India was not subjected to withholding tax and was covered by tax treaties. When Vodafone acquired controlling interest in the Indian company from Hutchison Whampoa in an offshore transaction, the IT Department slapped it with a charge that it ought to have deducted tax and paid it to the Government. One feels that Vodafone would be more inclined to make an IPO if it loses the cases, rather than if it wins it.

Last week the sensex rallied 215 points to end at 19602, and the Nifty gained 60 to close at 5884.

The sensex should start hitting resistance and move in a sideways range. There is no immediate reason for a sudden spurt, though the long term India story remains good. It could, of course, get much much better, with a slight improvement in public governance. That's where the anti corruption crusade comes in. That's why the common man must not get swayed by the smear campaign and continue pressing for a serious attack at corruption.

J Mulraj is a stock market columnist and observer of long standing. His weekly column on stock markets has run for over 27 years. An MBA from IIM Calcutta, he has been a member of the BSE. He is Conference Head - India, for Euromoney. A keen observer of events and trends, he writes in a lucid yet readable style and takes up issues on behalf of the individual investor. Nothing pleases him more than a reader who confesses having no interest in stock markets yet being a reader of his columns. His other interests include reading, both fiction and non-fiction, bridge, snooker and chess.

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17 Responses to "Smear campaign by politicians not wanting to tackle corruption"
Satyajit
Apr 28, 2011
If Congress member of PAC, Naveen Jindal says the Chairman of PAC had not adjourned the meeting and the remaining 11 members then appointed Saifuddin Soz as the acting Chairman to preside over the meeting, he may have a point.

However the children of a new India when they study history after Independence will know that they have grown up poor because of the systemetic looting of the wealth of the Nation by such corrupt leaders and the panel to investigate/book them were hijacked by the Mir Qasims.
Jai Bharat
Like 
vijay
Apr 26, 2011
To all my friends who feel that the Bhushan's should go out, tell me what if they are present in the panel.

The panel is not about saints - the government nominees are all corrupt idiots and no campaign is made against them.

There is a question of conflict of Interest. The bhushans could make the anti-corruption bill powerless so that their sins are not condoned. If diggy singh and their elk feel so, what the heck are their members in the panel going to do.

Cant they ensure that the bill is a powerful weapon to penalise the bhushans. Even without the lokpal bill the bhushans could be tried for any wrongdoings. who/what is stopping them?

The entire campaign is to derail the movement. Let us buy your argument and remove the bhushans out. Mind you, there was a report against Anna Haraze itself. Then there will be something against the newly elected panelist and it will never end

We shoudl not succumb to such cheap tricks and ask the question back to Diggy Singh, Kapil Sibal and Sonia what they heck they are doing in the name of governance and why they are not prosecuting Bhushans till date as they do not need any sanction to prosecute them in any of the deals.

JAI HIND
Like 
Prashant Manohar
Apr 25, 2011
Mr.Mulraj,
I do not agree with your comment of smear campaign. If The Bhushans have received allottment of land at a price less than prevailing market value at the time of allotment, they have certainly followed a corrupt practice. In that case they do not have any moral right to claim support of the people against corruption. Heavens will not fall if they are removed from the people movement against corruption. I am sure there are certainly, two equally competent lawyers to replace the Bhushans.
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KISHOR BATHIA
Apr 24, 2011
Keep it up. India needs people like you to fight corruption. Like 
V.K.VENAIK
Apr 23, 2011
We are not sure who is right.Forensic Report of GOVT. on taped conversation is in conflict with that of Private Expert obtained by the two Panel Members.
To avoid controversy,the concerned Members may opt out for some other prominent persons who inspire confidence of Genaral Public.After all there is no dearth of Honest
Persons.Why to make fuss.
Like 
Eric Pinto
Apr 22, 2011
Members of society also need to be clean in their lives when they cast aspersions on others including politicians. Every body should be under the scanner especially those who are crusaders against corruption.
It looks like you are condoning corruption by members of civil society while you target politicians ! Double standards !
Eric Pinto
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Gopalan
Apr 22, 2011
I wonder whether this comment is valid. My feeling is despite the fact that things are being brought out about the Bhushans at this time and baying for their blood,the same persons are still willing to sit on a committee that is going to draft a HISTORIC TOUGH BILL WHICH WILL INFACT COMPLETELY CHANGE THE WAY OF LIFE in the country. The same will later on even apply to them, and they can be hauled up under the same bill. Even if what is being purported to be true, it is almost like an extraordinary case where the so called culprits are giving a tough law that can be used against them itself. We must all support and celebrate this !! They are not covering up like the politicians and avoiding the matter. Like 
anish poojara
Apr 22, 2011
Nothing short of death penalty for financial crimes above Rs. 1,000/- will work.

anish poojara
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s.b.rasania
Apr 22, 2011
Agree with your views. We shuld keep Bhushan duo and
Mr. Hegde. Let Politician spread any thing. We want Intelligent persons like these people on Joint committee. Send this mail to the Prime Minister.
Like 
Wilfred DSilva
Apr 22, 2011
Dear Mr Mulraj

Very well written about the smear campaign.
Digvijay, Amar Singh and the other politicians are proclaiming the obvious "That all mankind has fallen short of the glory of God" so nobody has the right to act holier than thou.
So do these jokers want to say that parents also should not advise their children to refrain from evil deeds !!??

In support of "India against Corruption"

Sincerely
wilfred
Like 
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