A Feast of Vultures: The Hidden Business of Democracy in India

by Josy Joseph

The CEO of a foreign defence firm told me once that he had to spend a million US dollars just to get an appointment with a defence minister some years ago.

‘The golden rule (to protect one’s honour) is never question a written comment about the integrity of a decision.’

A few months later, Finmeccanica of Italy ended up winning a lucrative contract to supply twelve helicopters meant to fly India’s VVIPs, even though there were significant deviations from tender requirements. Allegations flew thick and fast. Later, it tumbled out that the Italian company had paid several million euros to a network of people, including a former chief of the Indian Air Force, to secure the contract. Documents filed in February 2013 in an Italian court showed that Finmeccanica’s former CEO, Giorgio Zappa, had made an interesting confession. During questioning at the prosecutor’s office in Naples on 22 May 2012, Zappa said that Choudhrie – who had been their agent for a long time in India – had been removed recently, only to be replaced by less careful, more garrulous foreigners, who inadvertently exposed the scandal. The Finmeccanica scandal is not an isolated business malpractice. It is the norm.

The CBI also indulged in some odd obfuscation. Choudhrie’s payments from Soltam were ‘received in pursuance to an agreement executed in London in June 1999 by which MITCO (Choudhrie’s firm) was appointed to represent Soltam and promote their products – electric and non-electric stainless steel kitchen utensils’. I am yet to meet anyone who is aware of Choudhrie’s deals in the kitchen utensils business. Months later, in August 2011, the judge closed the case. Almost two months later, intelligence agencies reported that Choudhrie, who had shifted base permanently to London sometime in 2006, made his first known visit to India in years.

In 1999, his grandson Sanjeev Nanda became the news. Sanjeev drove a newly imported BMW car over several people in Delhi early in the morning of 10 January 1999 while returning from a party. Six people died. In court, the young man’s high-profile lawyers argued that it was not Nanda’s car that mowed down those people. On 30 May 2007, the news channel NDTV ran a hidden-camera operation showing defence lawyer R.K. Anand and public prosecutor I.U. Khan working to win over a key witness to the accident, so that he would lie in court and save Sanjeev. This was a rare glimpse into how even the courts can be deflected for the right fee. Lawyers on both sides can collude, politicians across the spectrum can come together, as long as you have the right amount of money to fork out.

Whenever the law threatens to catch up with the Nandas, they seem to merely buy their way out of trouble. On 8 March 2008, Suresh and Sanjeev and their chartered accountant, Bipin Shah, were caught passing on a bribe to income-tax officer Ashutosh Verma in a room in Mumbai’s Marriott Hotel. A few days earlier, the CBI’s surveillance team had caught on camera the income-tax officer admitting that his lifelong earnings could not have matched even 10 per cent of what he got for helping the Nandas suppress their tax obligations. When the story broke, the memory of the Nandas’ efforts at buying off the Indian legal system in the car crash case a few months ago was still fresh. Once again, public outrage washed over them; once again, it left them untroubled.

The fact that they can operate with impunity in spite of the criminal cases lodged against them is almost surreal. Everyone has known what the Nanda family’s real business is ever since the HDW defence scandal broke in 1987 and central agencies raided Admiral S.M. Nanda and others, accusing the war hero of being an arms dealer. Officials of the German firm HDW, who were then supplying diesel submarines to the Indian Navy, had confirmed to the Indian ambassador in West Germany that they had paid a commission to the Nandas and some others to secure the submarine deal. Central investigators, including the CBI, raided Admiral Nanda’s home as well as the properties of other family members, and charged them with receiving kickbacks. When I met Admiral Nanda sometime in early 2000, in an overheated room in his mansion in Defence Colony, he told me that his rivals had taken revenge on him by sending the investigators to his house when a family celebration was under way. He spoke of the editor of my newspaper with great affection. It turned out that the London edition of the newspaper for which I worked was owned by the Nandas.

The HDW case dragged on in the courts, reached the Supreme Court of India, and was finally closed fifteen years later with the CBI saying it had no concrete evidence to prosecute the Nandas. No surprises there. In the 1980s, the HDW allegations, along with the Bofors scandal, kicked up India’s first true national outrage against corruption. It quite possibly changed the course of politics for years, wiping out the dominance of the Congress party and creating the new narrative of coalition politics comprising smaller regional parties. In 2014, when Prime Minister Narendra Modi swept to office, ending the th...

The trail of cash payment from mysterious entities in a tax haven for the purchase of properties in various cities around the world is hardly a singular phenomenon. If anything, it is a growing trend. An investigation in November 2012 by The Guardian and the International Consortium of Investigative Journalists showed that ‘anonymous buyers are taking over more and more blocks of luxury housing, particularly in the capital [London]’. They were all using tax havens to route money. ‘In 2011 alone, more than £7 billion of offshore money flooded into potentially tax-exempt purchases of UK houses, flats and office blocks. Most buyers snapped up property in central London, helping to explain why prices there have defied the recession,’ the investigation said.

It found that the majority of these buyers used British Virgin Islands (BVI), a major tax haven that is popular among Indians and accounted for £3.8 billion of the total deals in 2011.

Over the years, Claridges Hotels has seen several million rupees coming into it from a Mauritius-based firm, Universal Business Solutions. In 2007, Universal Business Solutions acquired shares, of face value Rs 10, at a premium of Rs 2,390. In January 2009, it acquired another lot of shares in Claridges Hotels at a premium of Rs 3,690. In a very similar pattern, Choudhrie has also brought significant amounts of money brought into India to start a very successful construction company, to fund a defence firm, to build luxury hotels and so on.

Despite the care taken by these players, details of their dealings spill over sometimes. On a tip-off from a civil servant, I spent several months tracking one of the Choudhrie family’s business deals, and what I discovered was probably a unique instance: documented evidence of transactions between a powerful military leader and an alleged arms dealer.

According to the trail that I was able to establish while working on this book, in 2005–06, the family of former army chief (1990–93) and then Punjab governor, General Sunith Francis Rodrigues, sold one of their companies to a firm promoted by Choudhrie. The deal happened when Choudhrie and his firms were under investigation by the CBI for their alleged involvement in manipulating arms deals in India. In transactions between 2005 and 2007, the value of a plot owned by a company of General Rodrigues, Zuari River Agrotech, was valued upwards almost a hundred times. Zuari was originally started by General Rodrigues in 1994 with the name Zuari Tigers Aqua. He held ten shares and another retired army officer, Captain Anil Bhalla, held a single share. Zuari had a plot of land valued at Rs 19.78 lakh. In 2005–06 Zuari claimed an addition to its assets, by revaluing the land to Rs 9.06 crore. On 17 February 2006, Zuari was amalgamated with Crystal Island Park, a company started by the former army chief’s son, Mark Rodrigues. All assets, liabilities and reserves of Zuari were taken over at their book value of Rs 10.88 crore by Crystal Island Park. Within days of the amalgamation, its own...

In 1987, allegations emerged that Bofors had paid bribes to procure an artillery contract from the Indian Army. Among the men who received kickbacks was Mr Q, according to the private diary of the managing director of Bofors, Martin Ardbo. Later, it emerged that Mr Q was Ottavio Quattrocchi, who was based in Delhi as the representative of Snamprogetti, an Italian engineering company that was part of the oil and gas giant Eni. Evidence soon emerged that in the tender floated by the Indian Army in 1984 to buy howitzer guns, it was the French Sofma gun that was probably on top of the selection list. The then army chief too favoured it. However, the contract went to Bofors, overruling the army – that is what Quattrocchi was capable of pulling off in New Delhi in the 1980s.

That is the kind of final intermediary I am talking about here. They work through proximity to the most powerful politicians of the day. These men and women are not professional middlemen; most often they are executives heading engineering companies, full-time politicians, think tank heads, and are most often the relatives of those in power, like a son-in-law maybe. When the political party is no longer in power, they go back to doing whatever they were doing earlier.

The Hindu, where Chitra Subramaniam and N. Ram led an unparalleled investigation into the scandal, reported that Quattrocchi was paid about Rs 8.4 crore through AE Services, an agent for Bofors, and probably more. That was a significant amount in those days, but it is not clear if he shared it with the Gandhi family or the Congress party. In the summer of 2003, Interpol found two accounts in the bank BSI AG containing around Rs 16 crore and Rs 4.8 crore, and the CBI got the accounts frozen. Quattrocchi’s repeated attempts to defreeze them were turned down by British courts. That the CBI acted so decisively was probably a result of Indian realpolitik: a BJP-led coalition was in power at the time. In the summer of 2004, another political change swept India and the Congress was back at the centre after years in the wilderness. Quattrocchi’s fortunes turned too. In December 2005, the Central government deputed a senior law officer to personally visit London and defreeze the accounts. Within weeks, both accounts were emptied out.

That was not the end of the story either. On 6 February 2007, based on an Interpol alert, Quattrocchi was detained in Argentina, but the CBI put up only a feeble fight for extradition, thus letting him get away. Under Congress rule, the very might of the state protected Quattrocchi. In April 2009, the CBI asked Interpol to withdraw the international red-corner notice against the Italian. In March 2011, a Delhi trial court discharged Quattrocchi in the Bofors case. The magistrate noted that the CBI had failed to provide any legally sustainable evidence despite twenty-one years of investigation. He added that while the total amount of bribe in the scandal was only Rs 64 crore, the CBI had spent a whopping Rs 250 crore on the case. Quattrocchi died of a heart attack on 13 July 2013 in Milan.

In the summer of 2004, when the BJP government suffered an unexpected defeat and the Sonia Gandhi-led Congress coalition swept to power, Sonia Gandhi chose Dr Manmohan Singh to be prime minister. However, it was not long before Robert Vadra – another son-in-law, this one married to Priyanka Gandhi, the daughter of Rajiv and Sonia Gandhi – and his undue influence began to be spoken of. Over the decade that the Congress-led government was in power, there was no concrete proof of Vadra’s involvement in manipulating government contracts. However, several people who had major dealings with the government continued speaking about his influence. He would occasionally make an appearance at a glamorous evening party or in a lifestyle magazine, but there was little else to show for his influence. What emerged eventually was that Vadra had amassed crores in a matter of a few years, thanks to the benevolence of DLF, one of India’s biggest construction companies, and the support of Congress-ruled state governments.

Colonel Kushal Pal Singh, a former army officer and chairman of DLF, is the face of India’s construction boom. He told senior journalist Shekhar Gupta in a television interview in November 2011: ‘In my terminology, what I call bribing is in two parts: one, where you give money to somebody to facilitate quicker disposal. Second, you give money if somebody asks you to do a wrong job. Now in my terminology, bribing is to do a wrong job, which I have never done in my life.’ The celebrated journalist sought no further clarifications. Singh has never spoken in public about what exactly Vadra did to merit the benevolence showered on him.

Kejriwal, who went into politics and stormed to power in Delhi soon after, said the deal was simple: DLF sold land and properties at very low rates to Vadra across India; in return, DLF received favours from the Congress governments at the state level.

Vadra’s fortune is simple to explain. In 2004, when the Congress party and its allies swept to power, Vadra was running a business of exporting inexpensive costume jewellery. By 2007, he had ventured into real estate and registered a firm called Sky Light Hospitality with just Rs 1 lakh as paid-up capital. The company bought 3.5 acres of agricultural land near a highway in Gurgaon for Rs 7.5 crore. The land could only be used for agricultural purposes, after all. However, a couple of months later, Vadra applied to the Congress-ruled Haryana government to permit him to convert the agricultural land for commercial use. The approval came promptly, and the price of the land shot up sharply.

As the land conversion was taking place, DLF began advancing crores of rupees as unsecured loan to Vadra’s companies. In 2012, DLF bought back the land for Rs 58 crore. The process was simple: DLF advanced Vadra the money to buy cheap agricultural land, which he converted to land f...

By 2012, Vadra was holding properties worth over Rs 300 crores, including a significant stake in a five-star hotel in the national capital. During the ten years that the Congress-led UPA alliance ruled India, Vadra’s fortunes may have soared, but there was still no conc...

The assailants ran back to their van and drove away. After the initial shock, Barkatalai regained his senses and rammed the Mercedes into their van, but the assailants got away. As they drove off, he saw in the rear-view mirror that his boss was bleeding profusely. He turned the car around as quickly as he could and drove back to the office, crying out for help as he pulled in. At the office, an East West employee got in the car with them and Barkatalai turned around again, rushing to the nearby Bhabha General Hospital. By the time Thakiyuddin was wheeled into the emergency ward at around 9.55 p.m., he was dead. The murder threw the improbable rise of East West Airlines into a tailspin. It was also further proof of the criminal underworld’s deep tentacles in Bombay. Many in the Bombay Police and Indian intelligence agencies were not entirely surprised by the murder. They had long suspected that the airline was involved financially with Dawood Ibrahim. The underworld don was by then hiding in Pakistan after accusations of masterminding thirteen blasts in Bombay in 1993, killing 257 people. One senior police officer involved in investigating the murder told me that they had several pieces of evidence to show that Dawood partially financed East West Airlines. Thakiyuddin also figured among the top targets of Dawood’s rivals – Hindu members of Dawood’s gang who had split from the Muslim don in the wake of the serial blasts. The Bombay Police had warned Thakiyuddin only a few d...

Heart-warming stories of first-generation entrepreneurs succeeding in the information technology industry and news of philanthropic initiatives by business honchos cannot erase the big picture, which is that a significant portion of Indian business still thrives on criminal links and activities.

The many ways in which the government can throttle an entrepreneur are mind-boggling: denying security from local police, not repairing a public road outside the factory complex, licences, electricity, imposing draconian labour laws and complex duties – the list is long. The government’s abundant help is needed not just to start and run a business but also to keep its Kafkaesque tentacles off the enterprise’s back.

It was a hot and humid day, 21 May 1991, and Tamil Nadu was gripped by election fever. Gandhi was campaigning in the state. The indications were that he was riding back to power after being in the wilderness for almost three years. He was wading into the crowd late in the evening in Sriperumbudur, 40 kilometres from Madras (now called Chennai), when a bespectacled young girl, Thenmozhi Rajaratnam alias Dhanu alias Gayatri, dressed in a yellow salwar suit and a green shawl, stepped forward to touch his feet reverently. As she bent down, Dhanu pressed the trigger of a bomb fitted in her belt filled with about a kilogram of RDX and pellets. The woman assassin from the LTTE instantly killed herself, the Gandhi family scion and fourteen others.

As the news of Rajiv Gandhi’s assassination spread, Faisal Wahid, who was studying in Bombay then, called Thakiyuddin to break the news. It was late in the evening. A heartbroken Thakiyuddin locked himself up in a room for days, grieving. He was mourning an idol, but not only him; he was also grieving the loss of the Wahid family’s most important patron in India’s complex and corrupt power structure.

Ministers and government officials would oblige the Wahids because they had access to Gandhi; this privilege saved them precious time and money. Licences that could take months or even years to obtain could be had in a matter of days. Back then, access to the Gandhi family guaranteed success. R...

In contrast to the optimism running through the East West office, and India’s airline sector generally, the global aviation industry was in turmoil in 1991 because of the Gulf War and a hike in oil prices. The iconic Pan Am succumbed to mismanagement and folded dramatically on 4 December 1991, leaving hundreds of passengers stranded in aircraft and terminals. Earlier that year, both Eastern Airlines and Midway Airlines had shut shop in the United States.

During the interrogation of the hit man belonging to the Chhota Rajan gang, Maria and his team obtained a long list of people that the gang would be targeting in the coming days because they were either business proxies or close associates of Dawood. In one of their worn-out files, you can still find the detailed list that the police team made of businesses and high-profile people who were aligned with the two dons, based on the interrogations of the shooter as well as other underworld operatives arrested over several weeks in 1995. During a meeting in Mumbai, one of the officers in the interrogation team shared his diary with me, now worn and bound in leather covers. Many of those in the list are today among India’s leading entrepreneurs. Some are worth many crores, own TV channels, produce Bollywood films and are construction magnates. Most continue to be celebrated faces in new India. Some, like Thakiyuddin and film producer Mukesh Duggal, who was close to Rajan, have met with a bloody end.

Encounters are a favourite professional tool for the Indian police. They arrest an alleged criminal, or a terrorist, and fake a shootout between the two sides to carry out a cold-blooded murder. The police has been using this tactic for a number of reasons – to terrorize and warn other criminals, to build the profiles of political leaders by showing that they were being targeted by terrorists, and occasionally to cook up stories behind bomb blasts and avoid painstaking investigations. Encounters are the easiest way to solve a case and create a sensation. Occasionally, to overcome the complex demands of India’s colonial criminal laws and slow-moving judiciary, police officers also use encounters to end a real threat from deadly criminals. This is the usual excuse in most cases where policemen own up to staging the encounter.

However, in India’s inefficient, corrupt system, there are islands of excellence. You just need to know how to access them, and that often requires dubious means.

India has not been able to live down the humiliation it suffered at the hands of China in the border skirmishes of October–November 1962. That humiliation effectively finished the unblemished reign of its first prime minister Jawaharlal Nehru, forced Defence Minister V.K. Krishna Menon out of office and led to several systemic changes. To date, minor transgressions by Chinese troops along the unmarked Line of Actual Control (LOAC) between the two countries are treated almost like invasions – not just by a hyperactive media but even large sections of academics and politicians. One of the major fallouts of the 1962 defeat was the realization that India’s Intelligence Bureau (IB) was not capable of gathering intelligence from deep inside enemy territories. From discussions about the failure of the Bureau, the Research and Analysis Wing (R&AW), a dedicated foreign intelligence agency along the lines of the United States’ Central Intelligence Agency (CIA), took shape in 1968.

Those in the know rate R&AW’s technical intelligence above all other capabilities, and at par with most of their counterparts around the world. Given its lack of parliamentary accountability and the secretive nature of its budget, R&AW has been able to acquire some of the finest equipment, as well as build a trained cadre of outstanding technical intelligence operatives.

Even all these years later, one of the transcripts of this technical intelligence division – of a conversation intercepted in 2003 – is vivid in the mind of an R&AW officer I spoke to. ‘It was a conversation between Chhota Shakeel and one of his men in Mumbai. He was abusing [an airline big shot] and asked the aide to go and meet him, to tell him that he has not, after so many years, paid up the promised amount for killing Thakiyuddin,’ the officer recalled. He said there were a few other conversations over the years along similar lines. ‘It fell into a pattern. We had reliable evidence that Thakiyuddin was killed by a rival who had colluded with and commissioned the underworld,’ he said.

At one of the review meetings, officials handling the underworld told them about the strong evidence that pointed to Thakiyuddin’s murder being the fallout of a business rivalry, and that he was killed by members of Dawood Ibrahim’s gang, the very same criminal syndicate to which East West had alleged financial links.

When the BJP came back to power for five years in 1999, several irrefutable links between Naresh Goyal and Dawood Ibrahim’s gang emerged. This time, the government did not react.

That the Tata group, India’s foremost business house with a legacy of over a century and a half, and one that played a pioneering role in industrializing India, struggled is testimony to the overwhelming corruption and manipulation that has crept into Indian decision-making. Ratan Tata has politely referred to the matter in public, but in private he has complained bitterly about the obstacles created by rivals to prevent his group from entering the sector.

A couple of weeks after Faisal’s last visit to Singapore, his eldest brother Nasiruddin called one morning asking if he had seen the newspapers of the day. ‘Singapore Airlines Over My Dead Body’, the headlines screamed, quoting Ibrahim. This was the very opposite of what Ibrahim had been telling Faisal, or even what he had told the Singapore Airlines leadership over the phone.

On 11 July 2005, a joint team of Mumbai and Delhi Police intercepted a car in the national capital and arrested Vicky Malhotra, a key aide of Dawood’s rival Chhota Rajan, who was wanted in numerous criminal cases, including murder and extortion. Surprisingly, accompanying Malhotra was Ajit Doval, a former chief of the IB and one of India’s most celebrated spies, who went on to become the national security advisor (NSA) to Prime Minister Narendra Modi in 2014. Some intelligence sources said Doval, despite his retirement, was part of an ongoing IB operation to use the Chhota Rajan gang to target Dawood. Some said Doval was acting on his own. Investigations revealed that Dawood had contacts within the Mumbai Police and that they had created an alert about Malhotra and thwarted Doval’s operation.

Speculation was that Doval was planning to target Dawood and his gang if they attended the Dubai reception. But Dawood turned the tables on him and one of India’s most celebrated spymasters was caught on a Delhi road with a criminal.

In December 2012, as Tata stepped down as the chairman of the group, he indicated that it was unlikely to re-enter civil aviation because of ‘destructive competition’. He was diplomatic: ‘I would hesitate to go into the sector today in the sense that the chances are that you would have a great deal of competition which would be unhealthy competition … Cut-throat competition which is done to keep you out is destructive competition. Overseas, people go bankrupt or companies go bankrupt. Here they never do, they continue to be sick and still operate. Then they are operating to kill you.’ Yet, in recent years, the Tata group has finally succeeded in entering the airline business. In 2013, Singapore Airlines and the Tatas announced the launch of their airline, named Vistara. The Tatas are also the Indian partner of Air Asia, the Malaysian low-cost carrier, which began operations in India in 2014.

Mallya, of course, is not alone. Industrialists brazenly occupy posts on committees that have the power to influence the sectors they work in. On 15 December 2008, Rahul Bajaj, a scion of India’s leading automobile manufacturer, the Bajaj group, got up in parliament to ask the finance ministry what steps it had taken to ameliorate the problems faced by the automobile industry.

Parimal Nathwani, a group president of India’s largest private sector firm, Reliance Industries Limited (RIL), has been a member of the Upper House since March 2008.

On 6 August 2009, when the Upper House was discussing the availability of natural gas at competitive prices for power generation and other national priorities, Nathwani got up to defend the Reliance group, India’s top natural gas producer. The irregularities surrounding RIL’s conduct in gas extraction from the Krishna–Godavari basin in the eastern coast of India were already the subject of much controversy, and many accused it of trying to push up the price of natural gas and earn undue profits.

Over the years, various parliamentary committees have been the playground of businessmen. Kalpataru Das, an MP from Orissa whose family has vast business interests in mines, sat on the select committee that scrutinized the new mining bill in 2015; Vijay Darda, whose family owned the Marathi newspaper Lokmat, the Hindi newspaper Lokmat Samachar and the English newspaper Lokmat Times, was a member of a committee that dealt with media regulations through the first decade of the new millenium; Chandrapal Singh Yadav from Uttar Pradesh sat on the standing committee on chemicals and fertilizers when he was the chairman of a fertilizer company in 2015; many MPs such as D.R. Meghe, P.B. Kore and M.A.M. Ramaswamy, who run private medical colleges, sat on parliamentary committees in the health sector over the years; Rajeev Chandrasekhar, who has major interests in the financial sector, was a member of the consultative committee for the Ministry of Finance starting 2009.

According to a 2010 study by National Social Watch Coalition, 128 out of the 543 members of the then Lok Sabha were businessmen with known or potential conflicts of interest with respect to the parliamentary proceedings they were participating in.

There is the peculiar case of Anurag Thakur, a member of parliament and son of a senior BJP leader, who was elected secretary of the all-powerful Board of Control for Cricket in India (BCCI) in March 2015. When asked if his victory and other developments signalled a takeover of cricket administration by the BJP, he told The Mint newspaper: ‘Not really, you can’t say that. It’s very interesting … I don’t belong to any group. Both the factions wanted me to become president. That clearly shows it’s not about the group. And similarly, if the BJP has lopsided with one [sic], then how are they contesting from different groups? There’s nothing like the BJP and Congress within the BCCI.’ Now, in May 2016, the same Anurag Thakur becomes the president of BCCI upon Shashank Manohar, the incumbent president, vacating the post. Thakur’s statement simplifies the political realities that shape power and influence in modern India. When it comes to sharing the pie or claiming a piece of it, there are no political divisions.

In 2000, Thakur, just twenty-five but already an emerging politician, was elected as president of the cricket association of his home state Himachal Pradesh. His father Prem Kumar Dhumal was then the state’s chief minister. In November that year, during a Himachal Pradesh vs Jammu & Kashmir game in the domestic first-class tournament, the Ranji Trophy, Thakur made a dramatic entry as captain of his team. It was historic, ridiculous and a story for our times. It was probably the first – and last – time that the president of a state cricket association got himself elected as the captain without undergoing selection trials or playing any significant cricket. With that otherwise insignificant appearance, Thakur became qualified to become a member of the national junior selection committee, satisfying the criterion that only first-class cricketers could be a part of national selection panels. Since then, he has been steadily climbing the ladder of power. Today, he is probably the most powerful sports administrator in India.