SCAM !!! SCAM !!! SCAM !!!

India, according to the Hindu calendar, experiences six seasons - Vasant (spring),
Grishma (summer), Varsha (monsoon), Sharad (autumn), Hemant (pre-winter) and
Shishir (winter). 'Ghotala' (scam) deserves to be added as the seventh season as
Indians have perennially experienced it, even before the country gained
independence.

The Joint Parliamentary Committee on Stock Scam of 2001 defined scam as:-
“Individual cases of financial fraud in them may not constitute a scam, but
persistent and pervasive manipulation of public funds falling under the
purview of statutory regulators and involving issues of governance, becomes
a scam.”

Believing in Netaji Subhash Chandra Bose's grit, bravery and ability to free the
country from colonial rule, commoners donated personal ornaments and jewellery to
the Indian National Army (INA). Immediately after Bose's death in 1945, the INA war
chest went missing, thanks to the greed of some of the freedom fighters. In the
1950s, the Jawaharlal Nehru government ignored repeated recommendations for a
probe into embezzlement of INA's wealth. One prime suspect became the PM's
media adviser.

The foundation for scams was well laid with political collusion. Irrigated by many
bountiful seasons of politician bureaucrat-police-criminal nexus, scams have spread
to every field. From coal block allocations to cash-for vote in Parliament, Jain hawala
to JMM MPs bribery, Bofors payoff to fodder, Satyam Computers to Sarada chit
funds, Harshad Mehta to C R Bhansali to Ketan Parekh, Spectrum to
Commonwealth Games, PDS to rice export, Vijay Mallya to Nirav Modi - all these
scams make us remember Kabir's famous doha, "Do Paatan Ke Beech, Saabut
Bacha Na Koye (between the two stones, no one survives)".

The regulation of financial market is one of the challenge which government faces.
The government established the Securities and Exchange Board of India in 1992 to
protect the interests of investors in securities and to regulate the securities market.
The ever-changing nature of these scams have kept the SEBI on its toes and
necessitated the need for its empowerment. The government recently passed the
Securities Law (Amendment) Bill, 2014 to empower the SEBI and to protect the
interests of investors in a better way.

These scams can affect the economy of the nation as a whole and in a globalized
world where all the countries are related by trade and other means, these scams can
damage the world economy at large. For example, a systemic risk occurs when few
brokers monopolize the transaction of securities leading to a lack of liquidity in the
economy.
Why has no regime been free from scams? Why have scams become a
seasonal happening? Why has no government been able to detect even the big
fish?

The Vijay Mallya’s and Nirav Modis have confirmed to us that nothing has changed
in the quarter century. No government has been able to stop the onset of the
seventh season of scam, which with periodic regularity continues to wreak havoc on
the economy.

Regularity of scams has taken the sheen off lofty words used regularly by the SC -
"be you ever so high, the law is above you". Scamsters have seldom been
punished as the machinery takes years to gather evidence and courts take still more
years to examine the evidence.
In 2003, the Centre had set up Serious Fraud Investigation Office (SFIO). It
comprised officers from taxation, customs, central excise, information technology,
company law, capital markets, banking, investigation, police, forensic audit etc and it
started functioning from October 2003.

What a waste of such a talent pool? Has the government fastened accountability on
SFIO? How could the Mallyas and the Modis escape its lenses? We must also fasten
accountability on Intelligence Bureau, Department of Revenue Intelligence and the
Central Bureau of Investigation, the specialised agencies which were created to
keep India's economy and citizens protected against scamsters.

On Ram Jethmalani's petition against black money, an SC bench headed by Justice

B Sudershan Reddy on July 4, 2011, had summed up the situation, "Increasingly, on
account of 'greed is good' culture that has been promoted by neo-liberal ideologues,
many countries face the situation where the model of capitalism that the state is
compelled to institute, and the markets it spawns, is predatory in nature. From
mining mafias to political operators who, all too willingly, bend policies of the state to
suit particular individuals or groups in the social and economic sphere, the raison
d'etre for weakening the capacities and intent to enforce the laws is the lure of the
lucre.

"Even as the state provides violent support to those who benefit from such
predatory capitalism, often violating the human rights of its citizens,
particularly it's poor, the market begins to function like a bureaucratic machine
dominated by big business, and the state begins to function like the market,
where everything is available for sale at a price."