Political Corruption in India: An Analysis

by R. Upadhyay "I would go to the length of giving the whole congress a decent burial, rather than put up with the corruption that is rampant." --- Mahatma Gandhi May 1939 This was the outburst of Mahatma Gandhi against rampant corruption in Congress ministries formed under 1935 Act in six states in the year 1937. The disciples of Gandhi however, ignored his concern over corruption in post-Independence India, when they came to power. Over fifty years of democratic rule has made the people so immune to corruption that they have learnt how to live with the system even though the cancerous growth of this malady may finally kill it. The recent Tehelka episode surcharged the political atmosphere of the country but it hardly exposed anything, that was unknown to the people of this biggest democratic polity. Politicians are fully aware of the corruption and nepotism as the main reasons behind the fall of Roman empire, the French Revolution, October Revolution in Russia, fall of Chiang Kai-Shek Government on the mainland of China and even the defeat of the mighty Congress party in India. But they are not ready to take any lesson from the pages of history. The history of corruption in post-Independence India starts with the Jeep scandal in 1948, when a transaction concerning purchase of jeeps for the army needed for Kashmir operation was entered into by V.K.Krishna Menon, the then High Commissioner for India in London with a foreign firm without observing normal procedure. Contrary to the demand of the opposition for judicial inquiry as suggested by the Inquiry Committee led by Ananthsayanam Ayyangar, the then Government announced on September 30, 1955 that the Jeep scandal case was closed. Union Minister G.B.Pant declared "that as far as Government was concerned it has made up its mind to close the matter. If the opposition was not satisfied they can make it an election issue.” Soon after on February 3,1956 Krishna Menon was inducted into the Nehru cabinet as minister without portfolio. In 1950, A.D.Gorwala, an eminent civil servant was asked by Government of India to recommend improvements in the system of governance. In his report submitted in 1951 he made two observations: “One, quite a few of Nehru's ministers were corrupt and this was common knowledge. Two, even a highly responsible civil servant in an official report as early as 1951 maintained that the Government went out of its way to shield its ministers” (Report on Public Administration, Planning Commission, Government of India 1951) Corruption charges in cases like Mudgal case (1951), Mundra deals (1957-58), Malaviya-Sirajuddin scandal (1963), and Pratap Singh Kairon case (1963) were

levelled against the Congress ministers and Chief Ministers but no Prime Minister resigned. The Santhanam Committee, which was appointed by the Government in 1962 to examine the issue of corruption in its report submitted in 1964 observed: “There is widespread impression that failure of integrity is not uncommon among ministers and that some ministers, who have held office during the last sixteen years have enriched themselves illegitimately, obtained good jobs for their sons and relations through nepotism and have reaped other advantages inconsistent with any notion of purity in public life.” The following comments of Nehru on the memorandum of charges against Pratap Singh Kairon submitted to the President of India by the non-Communist opposition in Punjab suggest his approach on corruption - “The question thus arises as to whether the chief minister is compelled to resign because of adverse findings on some questions of fact by Supreme Court. The ministers are collectively responsible to the legislature. Therefore, the matter was one, which concerned the assembly. As a rule therefore, the question of removing a minister would not arise unless the legislature expressed its wish by a majority vote.” (Pathology of Corruption by S.S.Gill) Thus, we find that while Nehru’s tolerance of corruption among his ministers legitimized this malady, his daughter Indira Gandhi institutionalized it by holding both the posts of the Prime Minister and party president. By doing so she was herself controlling the party funds, which gave birth to the money power in politics. The famous V.P.Malhotra (Chief Cashier of State Bank of India) case in which he got a telephone call believing from Indira Gandhi to pay Rs,60 lakhs to one Nagarwal remained a mystery. Corruption cases like Fairfax, HBJ Pipeline, and HDW Submarine deal came up since then. The famous Bofor’s deal is well known. Narsimha Rao was the first Prime Minister being prosecuted in corruption charges. Cases like Rs.2500 crore -Airbus A-320 deal with France involving kickback (1990), Harshad Mehta security scam (1992), Gold Star Steel and Alloys controversy (1992), JMM bribery case, Hawala scam of Rs. 65 crore and Urea scam (1996) also came up during the period of Narsimha Rao Government. Criminalisation of politics is another facet of corruption. N.N.Vohra, Union Home Secretary in his report (1995) on this issue observed:- “A network of mafias is virtually running a parallel Government pushing the state apparatus into irrelevance. Quoting some ‘DIB’ sources, he added, “….there has been a rapid spread and growth of criminal gangs, armed senas, drug mafias, smuggling gangs and economic lobbies in the country, which have over the years developed an intensive network of contacts with bureaucrats, government functionaries at local level, politicians, media persons and strategically located individuals in non-state sector. Some of these syndicates have also international linkages including the foreign agencies.”

Against the above-discussed historical background of corruption during last fifty years, the only contribution of Tehelka is that the exposure has forfeited the right of the BJP to claim itself to be a party with difference. So long the BJP was in opposition, it was by and large known as a party with moral integrity, but when it aligned with the political leaders with shady background for the sake of power, the malady of corruption infected this party too. Once the moral integrity is compromised it opens the door of corruption. Perhaps the BJP leadership deliberately went for ideological compromise for capturing power at centre. L.K.Advani put the responsibility on middle class when he reacted to a suggestion by an important ex-National Executive member of the party against the “dubious coalition politics”. Advani reportedly said: “ The middle class does not like compromises and tends to be idealistic. At the same time, it is unhappy if we lose power. It wants power as well as ideological integrity. This is the dilemma of the party”. ( Inside BJP by Dr. Jay Dubashi published in Times of India dated March 22,2001). Advani might have philosophised the situation but he cannot escape from the responsibility for the ideological compromise the BJP made for the sake of power. Corruption is an abstract term. According to World Bank report 1997 abuse of public power for private gains is described as corruption. But this appears to be too simplistic explanation of corruption. In fact it is a multi-faceted evil, which gradually kills a system. A basic conflict between the ethos and system has weakened the Indian polity. The feudal outlook of the ruling class polluted the people’s mindset, which judge the status of an individual on his capability to flout the law to favour them. This is the reason why corruption is no more viewed by people with abhorrence in Indian society. Leaders like Laloo, Jayalalitha, Sukhram and others, who are facing corruption charges, continue to have wide range of people’s support. Transparency, responsiveness, accountability, probity in public life and good governance are now only slogans. The legislature has failed to make the judiciary, executive and even media sensitive to the cause of the common people. The failure of the political leadership to take a principled stand against corruption has clouded the system to the extent that it is now difficult to understand whether the system is alive or dead. In the present context corruption is so much linked with power that our politicians have adopted a cynical attitude toward political morality. Maneuvering the antidefection law for electoral politics with the help of both money and muscle power and other unfair means for the sake of power have affected the political morality of all the political parties and as such none of them can claim themselves to be faithful to nation in true sense. It was pathetic to see an excellent orator of congress struggling to brush away the past of the congress in the recent “Big fight” programme of Star TV. The collapse of the Janata Party Government (1977-80), fall of V.P.Singh and Chandrashekhar Government (1990-91), turning his minority Government into majority by Narsimha Rao, split in Telugu Desam Party (1994), defection of Ajit

whose subjects are carried from his kingdom by ruffians. With Tehelka exposure. “That monarch. 2010 . which could be possible only after its thorough overhaul. Creative-Solutions published on Sept. The on going war cry against corruption. and not a living king. 7. is a dead. which is nothing but a mad fight to replace one corrupt system by another is not going to transform the beleaguered nation to a sustainable social order. while they call aloud for protection. Mahatma Gandhi believed in the need for creating a social climate against corruption. The need of the hour therefore. and he barely looks on them with his ministers. defection of S.Singh with his supporters to Congress (1993). is to wipe off the tormenting system. but as human nature more or less remains same and states either in monarchy or democracy are governed by the same human beings. License to govern does not mean license to be corrupt. he is still relevant. Manu may not be relevant to the present century. which meant creation of an atmosphere in which the corrupt could not thrive. which said. For this our national leadership is expected to devise a political mechanism to create a social atmosphere by empowering of people.Vaghela from BJP.S. maneuvering defection by Kalyan Singh to keep the BJP led Government in power in UP are some of examples to prove that a sizeable number of our politicians are not immune to corruption. The Bribery Scandal at Siemens AG Topics General Management Corporate Corruption Leadership Management Siemens AG Neil De Jour Owner. we may like to refer to our ancient law book.” (Manusmriti VII/143) Tehelka is simply an addition to thousands of past and present eruptions in the cancerous body polity of the country.

According to the state department. Duetusche Telecom AG.S. in addition to the billions of euro paid in fines. The company admitted certain company employees were engaged in fraudulent behavior and began estimating damages. has undertaken a multifaceted effort to combat bribery in international business transactions because it distorts national economies. While anti-bribery initiatives are underway in the Organization for Economic . particularly those of developing countries. Siemens former managers believed not only had they done nothing wrong because they did not do it for personal reasons it was standard practice for some companies abroad to require such bribes as a part of doing business. Duetsche Bahn AG. by diverting scarce resources. “The U. undermines the creation and legitimacy of democratically accountable institutions. and unfairly disadvantages companies which. refuse to pay bribes. The mangers admitted the bribery but defended themselves on the basis that it was not for personal gain and could be considered standard business practice in some countries where they did business. In May of 2007 two former managers at Siemens AG were convicted by German courts for “diverting the company’s money to bribe employees of Enel SpA. They were accused by IG Metall of bribing a union. back taxes and late interest. IG Metall also accused them of attempted bribery of a small union to get support for their policies in February of 2007. Bharath Krishna under Rajjiv Fernando’s direction at ICMR Center for Management Research used over 50 widely known and highly credible sources. an Italian company”. Siemens was also accused of bribery in 2006 involving foreign officials.S.Introduction The German based company Siemens AG bribery scandal rocked the business world. Siemens agreed to pay €1 billion towards settlement of corruption charges $800 million of which was a fine imposed by the U. He explains how court cases were brought against numerous people and companies involved in the different scandals and they were either convicted or admitted their guilt. and Deutche Post AG unethical business practices in Germany were exposed during the same time frame. Several of the corruption scandals involved bribing labor representatives on German companies boards so it was wondered if the German Co-determination law or Mitbestimmug was flawed. because of legal constraints or corporate practice. Volkswagen AG. Analysis In examining the scandal. A former board member was arrested. They were caught in corruption scandal for bribing employees of other companies for contracts. These two admitted their guilt but claimed they did nothing wrong because they did not take the money for themselves and it was considered standard business practice in the countries abroad where they routinely practiced these types of techniques in contract negotiation. Officials in Germany convicted two former managers of the company of bribing employees at an Italian energy firm. Several other countries accused Siemens of misconduct including Switzerland and Greece.

This co-determination concept has a long history – dating back originally to the 1920s – and is today regulated by a number of detailed laws. . have laws prohibiting its nationals and corporations from bribing foreign officials. 3) Social Development Through a better consideration of employees‘ interests when making establishment and company decisions.com/1997/Mar/6/131394. the principle is the same in every case: co-determination means co-responsibility. is a concept for employee consultation and participation (in certain cases) in company decisions at both establishment and company/group level within private sector companies in Germany. Deutsche Post AG were also being accused of bribery.Co-operation and Development (OECD). According to Rebecca Page at Hans Bockler Shifttung. Most countries have laws against bribery of their own officials.co-determination contributes to the improvement of working people’s living and working conditions.. What it actually refers to. just like the employer. “The word “co-determination”.S. or “Mitbestimmung” in German. 4) Control of Economic Power Where economic power masses together. The U.000 for bribing labor representatives with foreign trips.S.” She quotes the Federal Ministry for Employment & Social Order: listing the Objectives of Co-Determination as: 1) Equality of Capital and Work Behind this objective lies the legal claim to co-determination at establishment level (§ 2 Works Constitution Act). the Organizations of American States (OAS) and international financial institutions. This concerned analysts as they were beginning to believe that the co-determination laws were flawed. Whether participating in company decisions or contributing on company matters.” http://library. money and prostitutes. control is an important instrument in avoiding its misuse. need to keep an eye on the long term development of the company. which.html During the same time frame numerous other German companies like Deutsche Telekom AG. 2) Democracy in the Economy It is not just about transferring parliamentary forms of democracy but more importantly it’s about the principle of democracy and the resolving of conflicts not by force but through dialogue and co-decision. Deutsche Bahn AG. A senior executive at Volkswagen AG was convicted and fined €576. including the U.findlaw. In works councils and supervisory boards the employees. but only a few. This is why all of the laws on co-determination are directed towards enabling fruitful co-operation between both sides and creating a productive balance of interests. the challenge is to secure full implementation of these core initiatives and devise an action place for expanding these initiatives. is commonly heard outside of Germany but it’s actual meaning is often unclear. State Department is playing a leading role in a broad inter-agency effort to eliminate bribery in international business transactions. as opposed to the occasional obligingness of the employer. He also received a suspended jail term. is inalienable and requires companies not only to consider the interests of the shareholders but also those of the employees.

can you imagine here in the US trying to run any type of meeting with all three parties and coming to any kind of consensus. In my opinion the best solution would be to set up some kind of international governing body and require that all business operate within those basic international standards so that all parties involved know what is allowed and . I agree with the author of the case study when they claim “This led to a suspicious alliance between the management and the labor representatives. They could be unfamiliar with the culture of the new environment or unable to adapt. The firm could operate within the confines of the country they are doing business in and expect that as long as they hold to the standards of the country the are operating in there will be no violations. After all. values and laws of the country you are in or the country you are from? What if those values are significantly different and the bottom line shows that it is better for the shareholders to do business at a legal level in the country you are in? Is it then ethical to do business in that manner? Is it ethical not to? Should their be some type of overall governing agency that legislates all international business. Pages 5 – 8.” I can see not only how this could happen but why it almost had to. co-determination is an important factor in the stabilisation of our economic and social order.When seen this way. Should you operate within the confines of the ethics. values and legalities of the different countries you operate in? Do you remain with the laws you are sure about or try to operate under the more unfamiliar law of the country you are doing business in and what if it is more than one country? It be difficult to determine the best course for the company to take when dealing with a difference of culture and ethics abroad. Unternehmensmitbestimmung & Betriebsmitbestimmung”. Many companies must deal with the pressures of doing business in a legal environment unfamiliar to their representatives when they do business internationally which is what I think is at the heart of this case. It could be very difficult to make someone who has a different culture behave the way you think they should and vice versus. (Source: Federal Ministry for Employment & Social Order: “Mitbestimmung.” They state that “The presence of workers on the boards sometimes forced a situation wherein the main issues were discussed and agreed upon even before the meeting. How do you handle the differences in ethics. This is because they do not know the laws in the country they are establishing the abroad base in or slipped back into the business practices they are more familiar with and have assumed will continue to be ok. It could be best to remain on familiar ground and continue to operate within the culture and legalities that your firm is familiar with and argue that you were doing business in the manner that was legal in the country you were based in and should only be held to those standards but I don’t see that going over too well with the officials in the country whose borders you are you are operating within that expect their laws and customs be obeyed. which could never set a stage for proper discussions during the board meetings. Translation) Conclusion Given the scandals of the time it is no wonder that analysts were concerned. Jan 1995.

Anyone who was old enough in 1994 to read will remember the advertisements. 12.2-crore oil contract with a non-existent firm in Hong Kong and a kickback was given. prior to a public issue. to secure the purchase of the Bofors gun.expected and what is not thereby taking the unknowns out of the equation and equalizing the playing field for all concerned History of Scams – II 24/01/2011 11. Indian Bank Rip-off (1992) :. The Chairman of Airbus (a European consortium) at the time of the contract competition was Franz Josef Strauss (1915–1988). the promoter of MS Shoes. the German submarine maker.As food minister. at St Kitts. Kuo Oil Deal (1976):.With the exposure of this scandal concerning A.A Swedish firm was accused of paying Rs 64 crore to Indian bigwigs.000-crore deal with Airbus instead of Boeing caused a furore following the crash of an A-320. Antulay had garnered Rs 30 crore from businesses dependent on state resources like cement and kept the money in a private trust.An attempt was made to sully V. then the prime minister. with a deposit of $21 million.5 crore. New planes were grounded. which they never paid back.Harshad Mehta manipulated banks to siphon off money and invested the funds in the stock market. 13. allegedly used company funds to buy shares (of his own company) and rig prices. 699-crore public-***-rights issue. Sachdeva was later acquitted Airbus affair From Wikipedia.R.The Indian Oil Corporation signed an Rs 2. 18. was blacklisted after allegations that commissions worth Rs 20 crore had been paid. In 2005. Securities Scam (1992) :.P. Singh’s Mr Clean image by forging documents to allege that he was a beneficiary of his son Ajeya Singh’s account in the First Trust Corp. 16. Sachdeva. Kalpnath Rai presided over the import of sugar at a price higher than that of the market. Antulay Trust (1981) :. St Kitts Forgery (1989) :. The Indian Express was reborn. which lead-managed the issue. .tens of them intriguingly headlined: ‘Who is Pawan Sachdeva?’ For the record. leading to a crash. causing IA a weekly loss of Rs 2.000 crore. to dupe the public into investing in his Rs. He is alleged to have colluded with officials in the Securities Exchange Board of India (SEBI) and SBI Caps. in HDW’s favour. 17.HDW. Bofors Pay-Off (1987) :.Aided by M. then the chairman of the Indian Bank. 14. a high profile German politician in Bavaria. causing a loss of Rs 650 crore to the exchequer. borrowers-mostly small corporates and exporters from the south-were lent a total of over Rs 1. He resigned following the allegations. Antulay. Airbus Scandal (1990) :. The loss: Rs 5. the free encyclopedia The Airbus affair refers to allegations of secret commissions paid to members of the Government of Canada during the term of Prime Minister Brian Mulroney. Gopalakrishnan. Sugar Import (1994) :. including Rajiv Gandhi.Indian Airlines’s (IA) signing of the Rs 2. then the chief minister of Maharashtra. The petroleum and chemicals minister was directed to make the purchase.300 crore. 15. it was the peak of the public issued-led advertising boom and the ads were created by the Delhi branch of Rediffusion. MS SHOES SCAM (1994) :. 20. the case was finally closed. 19. HDW Commissions (1987) :. in exchange for then-crown corporation Air Canada's purchase of a large number of Airbus jets.

Mulroney denied the allegations. Mulroney was still a member of . as well as gain access to the feederliner market where they. The allegations were made in a letter sent by the RCMP to the government of Switzerland seeking access to banking records. and Boeing went so far as to buy de Havilland Canada to further strengthen their bargaining position. Contents [hide] • • • • • • • • 1 RCMP allegations 2 Media/journalistic coverage 3 Cash payments 4 Ethics Committee testimony 5 Oliphant Commission Report 6 See also 7 References 8 External links [edit]RCMP allegations In 1995.The order in question had long been pending. as well as the sale of some of Air Canada's existing Boeing 747 fleet. with an order for 34 Airbus A320s. as well as paying the former prime minister's $2. and both Boeing and Airbus Industrie had been competing heavily for the contract. Both offered shared production in Canada. had no presence. Boeing immediately put de Havilland up for sale. and launched a $50 million defamation suit against the Canadian government. in three cash payments of $75. he acknowledged in 2003 that shortly after stepping down in 1993 that he accepted $225.1 million legal fees. the Royal Canadian Mounted Police (RCMP) accused Mulroney and Frank Moores of accepting kickbacks from Karlheinz Schreiberon the sale of Airbus planes to the government-owned airline during Mulroney's term as Prime Minister of Canada. at that time.000 over 18 months from Schreiber.000 each. Although there is no evidence that Mulroney accepted kickbacks while prime minister. thereby putting that company in jeopardy. The government settled out of court in early 1997. alleging that the newly elected Liberal government of Jean Chrétien was engaging in a smear campaign against its predecessor. and agreed to publicly apologize to Mulroney. but the blame for this was generally placed on the government. The contract was eventually won by Airbus in 1988. Schreiber had earlier raised money for Mulroney's successful 1983 bid to win the leadership of the Progressive Conservative Party.

Schreiber mocked Mulroney's claim that the money was a consulting fee for help given in a pasta business Schreiber had invested in. [edit]Media/journalistic coverage Journalist Stevie Cameron wrote about the Airbus scandal.000 from Schreiber. a secret side agreement between Airbus Industrie and a Liechtenstein shell company.000 each in $1000 bills. William Kaplan clarified his position in a further book A Secret Trial.000. by criticizing Cameron for her role as a confidential RCMP informant on the Airbus matter. The fifth estate programme revealed there had been three cash withdrawals out of the account. On October 31. Corruption and Greed in the Mulroney Years.000. On February 8. International Aircraft Leasing. for the first time. and declared it as income to Revenue Canada only years later. Mulroney had previously not admitted accepting any commissions from Schreiber during his lawsuit against the Canadian government. and Schreiber's links to the Mulroney government. and to develop international contacts for Schreiber. revealing that Brian Mulroney filed a Voluntary . in 1993 and 1994. for a total of $300. CBC's The Fifth Estate produced a documentary in March 1995 which revealed. when Schreiber had come under criminal investigation in Germany. 2006. Then. Mulroney has not yet provided evidence of any work he performed for that money. a total of $300. linked with the Airbus affair. Two years later. in October 1999. and later under oath specifically denied any business dealings with him. Mulroney claims that this money was paid to him for consulting services he rendered to help promote a fresh pasta business.the Canadian House of Commons when one of the payments was made. who told Schreiber the former prime minister was short of funds. or IAL. Stevie Cameron and fifth estate producer Harvey Cashore.000 payment came through a Swiss bank account code-named "BRITAN" from another named "Frankfurt". The fifth estate reported that IAL received millions of dollars in secret commissions after the sale of Airbus aircraft to Air Canada in 1988. In 2004. in her 1994 best-selling bookOn the Take: Crime. Karlheinz Schreiber said in an interview with the program that the money came at the request of a Mulroney aide. Schreiber ridiculed their dealings in pasta-macaroni as nothing more than being sent a single flyer. The programme also reported there was no evidence that Mulroney knew of the source of the funds. wrote a book about Karlheinz Schreiber The Last Amigo. and has stated that the three separate payments were actually $100. 2007 The Globe and Mail and The Fifth Estate reported new information about the cash transactions between Schreiber and Mulroney. The Fifth Estate reported that the $300. and Mulroney for not disclosing the fact that he had received the $300. criticizing journalists for the paucity of evidence. William Kaplan responded to Cameron and the CBC programme in his 1998 book Presumed Guilty. in 2001. CBC's the fifth estate obtained new Swiss Bank Corporation records which revealed that Karlheinz Schreiber had set up a secret bank account in Zurich with the code-name "Britan".

On November 13. Prime MinisterStephen Harper announced that a third-party independent inquiry would be launched to review the dealings between Schreiber and Mulroney. The following day. 2007. who had by his own admission received $75. Schreiber stated on November 16. Extradition proceedings against Schreiber. the RCMP had been involved in an investigation of these matters from the late 1980s onwards. 2007 that if extradited. In June 2008. including further allegations by Mr. president of the University of Waterloo. began in 1999.Disclosure with Revenue Canada several years after accepting the cash envelopes from Karlheinz Schreiber. which had a role in bringing down a government there. to allow him to take part in the inquiry. 2007 that Mulroney. if he had not already spent the money. and which damaged the legacy of former German Chancellor Helmut Kohl. The RCMP announced on November 14. which was passed through parliament during Mulroney's own prime ministership. was filed with the court. 2007. Harper announced that the probe would be headed by David Lloyd Johnston. 2008. and will report by January 11. 2007. On November 8. Minister of Justice Rob Nicholson promised to delay . [edit]Cash payments The Globe and Mail reported on November 1. an affidavit. requiring that large cash transactions be reported. and he remained confined in the Toronto area. launched by German authorities. Schreiber. and whether Mulroney did so for this transaction was an open question. Schreiber lost his appeal of extradition to Germany. Johnston will advise on the terms of reference for the inquiry. Opposition parties in the Canadian House of Commons called for Schreiber's extradition to be delayed.000 of Schreiber's stated $300. Prime Minister Harper announced that a full public inquiry would take place. Internal United States rules also require that large cash transactions be recorded. should have declared those funds when he crossed the border into Canada several days later. according to the Globe and Mail article. 2007. Schreiber is wanted in Germany to answer for several criminal charges.000 in cash in New York City on December 8. he would not cooperate with the inquiry. that they would also open a review process into these matters. 1994. The story quoted retired RCMP inspector Bruce Bowie. The next day. who had played a role in preparing the original Canadian legislation. the Government of Canada established the "Commission of Inquiry into Certain Allegations Respecting Business and Financial Dealings Between Karlheinz Schreiber and the Right Honourable Brian Mulroney"[1] On November 15. pending further developments. in the light of the additional allegations raised by this new development. and that Schreiber would have to testify. [2] Minister of Public Safety Stockwell Day said later that day that the inquiry would be structured to allow witnesses to testify regardless of their location. including fraud and bribery.

as well as a reward for Mulroney's support for German reunification. 2008. had reiterated his refusal to reappear before the Committee. Thyssen's project. 2008. in the late 1980s and early 1990s. Schreiber explained further that the money he paid to Mulroney was not for any work Mulroney did while he was prime minister from 1984–1993. Mulroney's lawyers submitted a letter to the Ethics Committee chairman. but was a retainer for future work Mulroney would do for Schreiber after he left political office. but was never built. in 1993 and 1994. MBB. and was transported from Toronto toOttawa on November 28. did not come directly from Airbus. indicating that their client would not be willing to appear again before the committee because of the "unfair" treatment he encountered on December 13. with the Canadian government while Mulroney was prime minister. and December 6. but was drawn from 'success fees'. for airplanes and helicopters respectively. Mr. had gained initial government approval. to allow potential appeals to be filed by Schreiber's lawyer Edward Greenspan.3 million. and Thyssen.the extradition until at least December 1. This amount was originally set for $500. Schreiber obtained a stay of his extradition from the Ontario Court of Appeal on November 30.[6] Wikinews has related news:Brian Mulroney testifies before House of Commons in Canada On February 14. Schreiber explained that the $300. the committee decided the next day that it would wrap up this activity without further testimony. December 4. CTV News reported that Mr. Paul Szabo. which was achieved in 1991. He denied knowing about transactions made on that account by or for the former Prime Minister. scheduled for February 28. 2007. He testified before the House of Commons Ethics Committee on November 29.[4] On February 26. . six weeks following his appearance. who is suing Mulroney to recover that money.000. but was reduced because Mulroney did not in fact perform the work. Mulroney refused to comment in advance of his scheduled appearance before the Ethics Committee on December 13. However. 2007. Schreiber's Swiss accountant told the Ethics Committee that he did in fact set up a Swiss account for Mr Mulroney.000 he paid to Mulroney in three cash installments of $100. according to Schreiber. a prospective new factory for manufacturing light armoured vehicles. 2007[3]. Mulroney. money Schreiber earned in commissions for his lobbying work on behalf of Airbus. 2007. through his lawyer. Airbus and MBB had concluded large contracts.[5] After mulling the possibility of issuing a subpoena. and obtained bail on December 4 by posting $1. [edit]Ethics Committee testimony Schreiber was summoned from jail by a Speaker's Warrant issued by Commons Speaker Peter Milliken.000 each.

. at minimum. included the following findings:[10]  That Mulroney entered into an agreement with Schreiber while Mulroney was a Member of Parliament. Associate Chief Justice of the Court of Queen's Bench of Manitoba. Chaired by Mr. Justice Jeffrey Oliphant. . 2010.[7] The Commission completed its hearings phase in the last week of July 2009. The following weekend Mr.[8] Within three hours. Mulroney in May were essentially paraphrasings and expansions on those of the Ethics Committee proceedings."[9] The Commission's report. it was specifically mandated to focus on the dealings between Schreiber and Mulroney. thus garnering funds which would otherwise have been lost or. that three cash payments totaling at least CAD $225. he was escorted onto a Europe-bound aircraft by two RCMP officers. but not while still prime minister  That Schreiber retained Mulroney to promote the sale of military vehicles in the international market (not within Canada). and designated "surrendered to Germany. regarding civil or criminal liability" based on the Commission's mandate[11] and Oliphant wrote that he was "careful not to use language that would even hint at such a finding"[12].000 were made by Schreiber to Mulroney in person. and that no services were ever provided by Mulroney for the monies paid  That these business and financial dealings were inappropriate given Mr. released on May 31. the answers by Mr.. that was intended to encourage delinquent taxpayers to submit late declarations. This was in accordance with a Canada Revenue Agency amnesty incentive. after a last-ditch effort to find another means of avoiding extradition. Schreiber in April and Mr.[edit]Oliphant Commission Report In April and May 2009. now discontinued. to be declared only when drawn upon). Mulroney's position and that Mulroney repeatedly acted inappropriately in disclosure and reporting of the dealings and payments The report intentionally avoids "expressing any conclusions . Notable new revelations in Mulroney's testimonies included his explanation for the delay in declaring the cash payments as income (he considered them as advances on future activities. and that his accountant. While the inquisitors and their questions were different. the next episode ensued as the Oliphant Commission inquiry began. require costly legal action to be collected. had arranged to pay tax on only half the amount. was ordered to appear at the Toronto Detention Centre pending his return to Germany. without his knowledge. Schreiber.

R. Bhansali stock scam Rs 1. 2011 also Corruption in India .The Encyclopedia Total Scam Money (approx) Since 1992: Rs. 73000000000000 Cr.500 cr SNC Lavalin power project scam Rs 374 cr Bihar land scandal Rs 400 cr (Lalu Yadav) C.000 cr (PV Narsimha Rao) • • • • • • • • • • • • • • • • • • • • • 1994 -Sugar import scam Rs 650 cr1995 -Preferential allotment scam Rs 5.000 cr The Satyam scam Rs 10.978 cr 2006 -*Punjab's City Centre project scam Rs 1.200 cr 1998 -Teak plantation swindle Rs 8.250 cr 2002 -Sanjay Agarwal Home Trade scam Rs 600 cr 2003 -Telgi stamp paper scam Rs 172 cr (NCP Leader Chagan Bhubal & Sharad Pawar) 2005 -*IPO-Demat scam Rs 146 cr Bihar flood relief scam Rs 17 cr (Lalu Yadav) Scorpene submarine scam Rs 18.000 cr Yugoslav Dinar scam Rs 400 crMeghalaya Forest scam Rs 300 cr 1996: -Fertiliser import scam Rs 1.[edit]See Feb 2.800 cr Dinesh Dalmia stock scam Rs 595 cr Ketan Parekh securities scam Rs 1.300 cr +Urea scam Rs 133 cr Bihar fodder scam Rs 950 cr (लललल लललल) 1997 -Sukh Ram (Congress Telecom Minister) Telecom Scam Rs 1.000 cr 2001 -UTI scam Rs 4.500 cr. (73 Lakh Crore) Hard to digest ? Just check the below given details • 1992 -*Harshad Mehta securities scam Rs 5.000 cr (Samuel Rajshekhar Reddy) . Taj Corridor scam Rs 175 cr (Mayavati) 2008 -*Pune billionaire Hassan Ali Khan tax default Rs 50.

The UTI Scam. 430 million India's biggest scams 10. Cycle Imports (1951) :-* S. Dinesh Singhania. Uday Goyal. 320 million India's biggest scams 11. Rs.Free India's corruption graph begins. was jailed for accepting a bribe in lieu of granting a cycle import quota to a company.000 crore India's biggest scams 1. The then Prime Minister. Jawaharlal Nehru. Rs. Ramalinga Raju. Rs. 6 billion India's biggest scams 13.• • • • • • • • • • • • • • • • • • • • • • • • • • • • Army ration pilferage scam Rs 5. Abdul Karim Telgi. Virendra Rastogi. the UPA Minister) State Bank of Saurashtra scam Rs 95 cr Illegal monies in Swiss banks.000 cr The 2-G spectrum swindle Rs 60. Dinesh Dalmia. set up a one-man commission . MONEY LAUNDERING SCAM. as estimated in 2008 Rs 71.000 cr Madhu Koda mining scam Rs 4. Krishnamachari and his principal finance secretary. 10 billion India's biggest scams 4. 12 billion India's biggest scams 5. then the Indian high commissioner to Britain. Rs. Harshad Mehta. Rs. 40 billion India's biggest scams 3. V. C R Bhansali. Rs.000 cr ( D Raja.71 billion India's biggest scams 9. then the secretary.000 crores" Spectrum scam: How govt lost Rs 60. and raised a question in Parliament on the sale of 'fraudulent' shares to LIC by a Calcutta-based Marwari businessman named Haridas Mundhra. Rs. Rs. K. Feroz Gandhi sources the confidential correspondence between the then Finance Minister T.A.000 cr 2009: -*The Jharkhand medical equipment scam Rs 130 cr (Congress Allies Madhu Koda) Rice export scam Rs 2. ministry of commerce and industry. 1.T. Sanjay Agarwal. IPO Scam India's biggest scams 7. The case was closed in 1955 and soon after Menon joined the Nehru cabinet. Krishna Menon.000 cr" SC refuses to quash PIL against Mayawati in Taj corridor scam Orissa mine scam could be worth more than Rs 14k cr CORRUPTION. arrest imminent 'A Cover-Up Operation': "It's a scam involving close to Rs 60. Rs.95 billion India's biggest scams 8. Koda discharged from hospital. 1. 50.00.4 billion (Samuel Rajshekhar Reddy) India's biggest scams 2. MUNDHRA SCANDAL (1957):-* It was the media that first hinted there might be a scam involving the sale of shares to LIC. Cobbler scam India's biggest scams 6. 5. Rs.1 billion India's biggest scams 12. bypassed protocol to sign a deal worth Rs 80 lakh with a foreign firm for the purchase of army jeeps. Rs.2 billion Jeep Purchase (1948) :*. Venkataraman.500 cr Orissa mine scam Rs 7. 2. Ketan Parekh.

after which Teja fled the country.000-crore deal with Airbus instead of Boeing caused a furore following thecrash of an A-320. . to secure the purchase of the Bofors gun. Airbus Scandal (1990) :-* Indian Airlines's (IA) signing of the Rs 2. The Indian Express was reborn. Antulay Trust (1981) :-* With the exposure of this scandal concerning A. with a deposit of $21 million. then the chief minister of Maharashtra. Antulay. where her son Sanjay Gandhi was favoured with a license to make passenger cars. Solanki resigned when India Today broke the story. then the external affairs minister. Solanki Exposé (1992) :.25 crore.*Pratap Singh Kairon became the first Indian chief minister to be accused of abusing his power for his own benefit and that of his sons and relatives. Antulay had garnered Rs 30 crore from businesses dependent on state resources like cement and kept the money in a private trust. Bofors Pay-Off (1987) :-* A Swedish firm was accused of paying Rs 64 crore to Indian bigwigs. New planes were grounded. Kuo Oil Deal (1976):-* The Indian Oil Corporation signed an Rs 2. in HDW's favour. the German submarine maker. Chagla concluded that Mundhra had sold fictitious shares to LIC. Teja Loans (1960):-* Shipping magnate Jayant Dharma Teja took loans worth Rs 22 crore to establish the Jayanti Shipping Company. former Prime Minister Indira Gandhi's name came up in the first Maruti scandal. Madhavsinh Solanki. thereby defrauding the insurance behemoth to the tune of Rs. causing IA a weekly loss of Rs 2.R. at St Kitts. was blacklisted after allegations that commissions worth Rs 20 crore had been paid. In 1960.5 crore. HDW Commissions (1987) :-* HDW. He quit a year later. Mundhra was sentenced to 22 years in prison. including Rajiv Gandhi. The petroleum and chemicals minister was directed to make the purchase. Kairon Scam (1963):. 1. slipped a letter to his Swiss counterpart asking their government to stop the probe into the Bofors kickbacks.*At the World Economic Forum. Singh's Mr Clean image by forging documents to allege that he was a beneficiary of his son Ajeya Singh's account in the First Trust Corp. Maruti Scandal (1974) :-* Well before the company was set up. then the prime minister. Patnaik's Own Goal (1965) :-* Orissa Chief Minister Biju Patnaik was forced to resign after it was discovered that he had favoured his privately-held company Kalinga Tubes in awarding a government contract.T.headed by Justice M. In 2005. the authorities discovered that he was actually siphoning off money to his own account. The scam also forced the resignation of T.P. St Kitts Forgery (1989) :.*An attempt was made to sully V.2-crore oil contract with a non-existent firm in Hong Kong and a kickback was given. the case was finally closed.Chagla to investigate the matter when it becomes evident that there was a prima facie case.C.Krishnamachari.

Savvy entrepreneurs convinced gullible investors that given the right irrigation and fertilizer inputs. Abdul Karim Telgi. Sachdeva was later acquitted PLANTATION COMPANIES SCAM (1999) :-* It was as innovative a swindle as any effected in the world. causing a loss of Rs 650 crore to the exchequer.563 crore from investors. 37. Natwar Singh (Congress Minister of . it was the peak of the public issued-led advertising boom and the ads were created by the Delhi branch of Rediffusion.*Anyone who war old enough in 1994 to read will remember the advertisements. Oil-for-Food Scandal (2005) :. MS SHOES SCAM (1994) :. 36.*As food minister. 699-crore public-***-rights issue. which lead-managed the issue. to dupe the public into investing in his Rs. plantation companies fell under the purview of neither SEBI nor Reserve Bank of India. Disclosures of the mastermind behind it. He and Ajay Sharma were banned from playing. Stockmarket Scam (2001) :-The mayhem that wiped off over Rs 1. prior to a public issue. borrowers-mostly small corporates and exporters from the south-were lent a total of over Rs 1. teak. just another affirmation of the old saying about money not growing on trees. the promoter of MS Shoes. which they never paid back. The loss: Rs 5. Gopalakrishnan. Indeed.tens of them intriguingly headlined: 'Who is Pawan Sachdeva?' For the record. (Now Congress MP) till then India's cricket captain.*Aided by M. would grow anywhere in the country. enough investors had been gulled: 653 companies.000 crore. then the chairman of the Indian Bank.000 crore to the exchequer. leading to a crash. For. He is alleged to have colluded with officials in the Securities Exchange Board of India (SEBI) and SBI Caps. To date. He resigned following the allegations. strawberries.000 crore in the markets in March 2001 was masterminded by the Pentafour bull Ketan Parekh.15. not many investors have got their principals back. Sugar Import (1994) :. Match Fixing (2000) :-* Mohammed Azharuddin. for that matter).Securities Scam (1992) :-* Harshad Mehta manipulated banks to siphon off money and invested the funds in the stock market. implicated top police officers and bureaucrats. while Ajay Jadeja and Manoj Prabhakar were suspended for five years.The sheer magnitude of the racket was shocking-it caused a loss of Rs 30. He was arrested in December 2002 and banned from acccessing the capital market for 14 years. had raised Rs. The promoters could afford to collect money from investors and not worry about retribution (or returns. between them. Kalpnath Rai presided over the import of sugar at a price higher than that of the market. 2.300 crore. Sachdeva. Indian Bank Rip-off (1992) :. they didn't even come under the scope of the Department decided to change things in 1999.K. Stamp Paper Scam (2003) (Minister of Congress-NCP in Maharashtra involved):. was accused of match-fixing. and anything else that could be grown. allegedly used company funds to buy shares (of his own company) and rig prices.

" Greed. Announce: 121 more loan waiver schemes. Grow the GDP:* The scam money is 27% more than our GDP of Rs 53 lakh crore. Jeep Purchase (1948) Free India's corruption graph begins. bypassed protocol to sign a deal worth Rs 80 lakh with a foreign firm for the purchase of army jeeps. then the secretary. graft.82 lakh to 40 crore Indians living BPL. Launch:* 90 NREGA-style schemes. All of them worth Rs 60. Clean up:* 50 major rivers for the next 121 years. destroyed reputations and left many people poorer. ministry of commerce and industry. Cycle Imports (1951) S.A. Set up: 2. That’s at least 3 for every village.6 crore low-cost houses assuming a cost of Rs 5 lakh a unit. Supply: *12 lakh CFL bulbs. What India Could Do With Rs 73 Lakh Crore?* Build:* 2. Venkataraman.4 crore primary healthcare centres.703 coal-based power plants of 600 MW each.02 crore each. give Rs 1. at Rs 1. Just another day in the life of a nation still rated among the most corrupt in the world. Construct:* 14.8 crore Tata Nanos to 60.1 lakh Kendriya Vidyalayas at a cost of Rs 3. Scan the scams that have grabbed headlines. The case was closed in 1955 and soon after Menon joined the Nehru cabinet. That’s a road around India’s perimeter 97 times over. destroyed reputations and left many people poorer. Hand out:* 60. Scan the scams that have grabbed headlines. then the Indian high commissioner to Britain. Give: *Rs 56.200 crore a river every year. with two sections from Class VI to XII.111 crore. BHU Funds (1956) . Scandal Sheet Greed. was jailed for accepting a bribe in lieu of granting a cycle import quota to a company.000 crore. Even better. bribery. V. dirty money. That’s enough light for each of India’s 6 lakh villages Construct:* 14.000 to every Indian.6 lakh km of two-lane highways. politics. Or four times as many laptops. Just another day in the life of a nation still rated among the most corrupt in the world. each worth roughly Rs 81. Each costs Rs 2. politics.8 crore people. bribery.700 crore. at a cost of Rs 30 lakh each. Build:* 24. Krishna Menon. dirty money. K.Foreign Affairs) was unceremoniously dropped from the Cabinet when his name surfaced in the Volcker Report on the Iraq oil-for-food scam.

Patnaik's Own Goal (1965) Orissa Chief Minister Biju Patnaik was forced to resign after it was discovered that he had favoured his privately-held company Kalinga Tubes in awarding a government contract.In one of the first instances of corruption in educational institutions. Kairon Scam (1963) Pratap Singh Kairon became the first Indian chief minister to be accused of abusing his power for his own benefit and that of his sons and relatives. former prime minister Indira Gandhi's name came up in the first Maruti scandal. Antulay had garnered Rs 30 crore from businesses dependent on state resources like cement and kept the money in a private trust. Antulay Trust (1981) With the exposure of this scandal concerning A. where her son Sanjay Gandhi was favoured with a licence to make passenger cars. Teja Loans (1960) Shipping magnate Jayant Dharma Teja took loans worth Rs 22 crore to establish the Jayanti Shipping Company. HDW Commissions (1987) . Krishnamachari to resign as finance minister. Maruti Scandal (1974) Well before the company was set up. Madhavsinh Solanki.T. Kuo Oil Deal (1976) The Indian Oil Corporation signed a Rs 2.2 crore in firms owned by Haridas Mundhra to bail him out of a crunch. under the Centre's pressure. after which Teja fled the country. bought shares worth Rs 1. He quit a year later. the authorities discovered that he was actually siphoning off money to his own account. In 1960. Mundhra Mess (1958) The Life Insurance Corporation of India. then the external affairs minister. then the chief minister of Maharashtra. Solanki Exposé (1992) At the World Economic Forum. slipped a letter to his Swiss counterpart asking their government to stop the probe into the Bofors kickbacks. The case compelled T. The petroleum and chemicals minister was directed to make the purchase. Antulay. Solanki resigned when India Today broke the story. The Indian Express was reborn. Benaras Hindu University officials were accused of misappropriation of funds worth Rs 50 lakh.R.2-crore oil contract with a non-existent firm in Hong Kong and a kickback was given.

Securities Scam (1992) Harshad Mehta manipulated banks to siphon off money and invested the funds in the stockmarket. with a deposit of $21 million.based private firm in the purchase of telecom equipment. Airbus Scandal (1990) Indian Airlines's (ia) signing of the Rs 2. causing a loss of Rs 650 crore to the exchequer.V.6 crore to the exchequer by favouring a Hyderabad. In a Pickle (1996) Pickle baron Lakhubhai Pathak raised a stink when he accused former prime minister P. causing IA a weekly loss of Rs 2. He resigned following the allegations. Gopalakrishnan. Narasimha Rao and godman Chandraswami of accepting a bribe of Rs 10 lakh from him for securing a paper pulp contract. to secure the purchase of the Bofors gun. in HDW's favour. was . Singh's Mr Clean image by forging documents to allege that he was a beneficiary of his son Ajeya Singh's account in the First Trust Corp. along with two others.5 crore. St Kitts Forgery (1989) An attempt was made to sully V. He. Kalpnath Rai presided over the import of sugar at a price higher than that of the market.V. In 2005. at St Kitts. borrowersmostly small corporates and exporters from the south-were lent a total of over Rs 1. Telecom Scam (1996) Former minister of state for communication Sukh Ram was accused of causing a loss of Rs 1.HDW. JMM Bribes (1995) Jharkhand Mukti Morcha leader Shailendra Mahato testified that he and three party members received bribes of Rs 30 lakh to bail out the P. Indian Bank Rip-off (1992) Aided by M.300 crore. Bofors Pay-Off (1987) A Swedish firm was accused of paying Rs 64 crore to Indian bigwigs.000 crore. leading to a crash. Sugar Import (1994) As food minister. the case was finally closed. then the prime minister. the German submarine maker.000-crore deal with Airbus instead of Boeing caused a furore following the crash of an A-320. which they never paid back. New planes were grounded. including Rajiv Gandhi. then the chairman of the Indian Bank. was blacklisted after allegations that commissions worth Rs 20 crore had been paid.P. The loss: Rs 5. Narasimha Rao government in the 1993 no-confidence motion.

000 crore in the markets in March 2001 was masterminded by the Pentafour bull Ketan Parekh. He resigned a year later. But it was S. Home Trade Scam (2002) Under the pretext of gilt trading. Stamp Paper Scam (2003) The sheer magnitude of the racket was shocking-it caused a loss of Rs 30. Ramakrishnan. Jain's diaries that had heads rolling. then the state chief minister.S. Natwar Singh was unceremoniously dropped from the Cabinet when his name . Rs 600 crore was swindled from over 25 cooperative banks in Maharashtra and Gujarat by a Navi Mumbai-based brokerage firm Home Trade. and a group of businessmen close to the P.convicted in 2002.15. CEO of the firm. Tehelka Sting (2001) Tehelka. till then India's cricket captain. Sanjay Agarwal. in their sting operation called Operation Westend. while Ajay Jadeja and Manoj Prabhakar were suspended for five years. an online news portal. which was never delivered. implicated top police officers and bureaucrats. MD. was accused of matchfixing. Narasimha Rao regime fleeced the government and took Rs 133 crore from the import of two lakh tonne of urea. Fodder Scam (1996) The accountant general's concerns about the withdrawal of excess funds by Bihar's animal husbandry department unveiled a Rs 950-crore scam involving Lalu Prasad Yadav.V. Hawala Diaries (1996) The scandal surfaced following CBI raids on hawala operators in Delhi in 1991.000 crore to the exchequer. Stockmarket Scam (2001) The mayhem that wiped off over Rs 1. Oil-for-Food Scandal (2005) K. Urea Deal (1996) C. Match Fixing (2000) Mohammed Azharuddin. used spycams to catch army officers and politicians accepting bribes. Abdul Karim Telgi. Investigative journalism turned another corner in the country.K. He was arrested in December 2002 and banned from acccessing the capital market for 14 years. Disclosures of the mastermind behind it. National Fertiliser. was arrested in May 2002. He and Ajay Sharma were banned from playing.

Feroz Gandhi sources the confidential correspondence between the then Finance Minister T. The then Prime . politics. 4. then the secretary. then the Indian high commissioner to Britain. ministry of commerce and industry. bribery. Krishna Menon.It was the media that first hinted there might be a scam involving the sale of shares to LIC.In one of the first instances of corruption in educational institutions. Scan the scams that have grabbed headlines. was jailed for accepting a bribe in lieu of granting a cycle import quota to a company. Just another day in the life of a nation still rated among the most corrupt in the world. Krishnamachari and his principal finance secretary.2005) . MUNDHRA SCANDAL (1957):.Free India's corruption graph begins. (1948 .T.surfaced in the Volcker Report on the Iraq oil-for-food scam. destroyed reputations and left many people poorer. V. Venkataraman. 2. Scandal Sheet. dirty money. The case was closed in 1955 and soon after Menon joined the Nehru cabinet. Jeep Purchase (1948) :. Cycle Imports (1951) :. BHU Funds (1956) :. and raised a question in Parliament on the sale of 'fraudulent' shares to LIC by a Calcutta-based Marwari businessman named Haridas Mundhra. graft.Kya fursat hai logo ke paas Scandal Sheet Greed. 1. K. 3. bypassed protocol to sign a deal worth Rs 80 lakh with a foreign firm for the purchase of army jeeps.S. Scams in India through history.A. Benaras Hindu University officials were accused of misappropriation of funds worth Rs 50 lakh.

where her son Sanjay Gandhi was favoured with a license to make passenger cars.Well before the company was set up.Pratap Singh Kairon became the first Indian chief minister to be accused of abusing his power for his own benefit and that of his sons and relatives.Krishnamachari. 1. slipped a letter to his Swiss counterpart asking their government to stop the probe into the Bofors kickbacks. the authorities discovered that he was actually siphoning off money to his own account. Mundhra was sentenced to 22 years in prison.C. 6. 9. Kuo Oil Deal (1976):.2-crore oil contract with a non-existent firm in Hong Kong and a kickback was given.At the World Economic Forum. The petroleum and chemicals minister was directed to make the purchase. Jawaharlal Nehru. 11. Madhavsinh Solanki. Teja Loans (1960):.With the exposure of this scandal concerning A. 7.Shipping magnate Jayant Dharma Teja took loans worth Rs 22 crore to establish the Jayanti Shipping Company.The Indian Oil Corporation signed an Rs 2. Antulay. 12. Solanki resigned when India Today broke the story. 8. Maruti Scandal (1974) :.25 crore. Solanki Exposé (1992) :. In 1960. set up a one-man commission headed by Justice M. The scam also forced the resignation of T. former Prime Minister Indira Gandhi's name came up in the first Maruti scandal. thereby defrauding the insurance behemoth to the tune of Rs. 10. He quit a year later.Chagla to investigate the matter when it becomes evident that there was a prima facie case. Chagla concluded that Mundhra had sold fictitious shares to LIC. Kairon Scam (1963):.Minister. then the external affairs minister.R. then the chief minister . Antulay Trust (1981) :.T.Orissa Chief Minister Biju Patnaik was forced to resign after it was discovered that he had favoured his privately-held company Kalinga Tubes in awarding a government contract. Patnaik's Own Goal (1965) :. after which Teja fled the country.

16. MS SHOES SCAM (1994) :. the case was finally closed. The Indian Express was reborn. Singh's Mr Clean image by forging documents to allege that he was a beneficiary of his son Ajeya Singh's account in the First Trust Corp. 20. then the prime minister. with a deposit of $21 million.of Maharashtra.000 crore.300 crore. 13.A Swedish firm was accused of paying Rs 64 crore to Indian bigwigs. causing a loss of Rs 650 crore to the exchequer. He resigned following the allegations. Kalpnath Rai presided over the import of sugar at a price higher than that of the market. Sugar Import (1994) :. 17. the German submarine maker. it was the . leading to a crash.5 crore. St Kitts Forgery (1989) :. including Rajiv Gandhi. The loss: Rs 5. to secure the purchase of the Bofors gun.An attempt was made to sully V. Gopalakrishnan. 19.tens of them intriguingly headlined: 'Who is Pawan Sachdeva?' For the record. 15. causing IA a weekly loss of Rs 2. Antulay had garnered Rs 30 crore from businesses dependent on state resources like cement and kept the money in a private trust. then the chairman of the Indian Bank.Aided by M.P. 18. at St Kitts. in HDW's favour. In 2005. Bofors Pay-Off (1987) :.As food minister. was blacklisted after allegations that commissions worth Rs 20 crore had been paid.000-crore deal with Airbus instead of Boeing caused a furore following the crash of an A-320.Indian Airlines's (IA) signing of the Rs 2. New planes were grounded. which they never paid back. 14. HDW Commissions (1987) :.Harshad Mehta manipulated banks to siphon off money and invested the funds in the stock market. Securities Scam (1992) :.Anyone who war old enough in 1994 to read will remember the advertisements. Indian Bank Rip-off (1992) :. borrowers-mostly small corporates and exporters from the south-were lent a total of over Rs 1. Airbus Scandal (1990) :.HDW.

Former minister of state for communication Sukh Ram was accused of causing a loss of Rs 1. 26. which was never delivered. and a group of businessmen close to the P. Hawala Diaries (1996) :. Narasimha Rao government in the 1993 noconfidence motion. Ramakrishnan.V. National Fertiliser. He is alleged to have colluded with officials in the Securities Exchange Board of India (SEBI) and SBI Caps. the promoter of MS Shoes.C. was convicted in 2002. Telecom Scam (1996) :.The accountant general's concerns about the withdrawal of excess funds by Bihar's animal husbandry department unveiled a Rs 950-crore scam involving Lalu Prasad Yadav. which lead-managed the issue.S. 22.Jharkhand Mukti Morcha leader Shailendra Mahato testified that he and three party members received bribes of Rs 30 lakh to bail out the P. Sachdeva.V. then the state chief minister.6 crore to the exchequer by favouring a Hyderabad. Narasimha Rao regime fleeced the government and took Rs 133 crore from the import of two lakh tonne of urea.peak of the public issued-led advertising boom and the ads were created by the Delhi branch of Rediffusion.Pickle baron Lakhubhai Pathak raised a stink when he accused former Prime Minister P. He resigned a year later. allegedly used company funds to buy shares (of his own company) and rig prices. He. JMM Bribes (1995) :. prior to a public issue. 25. 699crore public-***-rights issue. Urea Deal (1996) :. Narasimha Rao and godman Chandraswami of accepting a bribe of Rs 10 lakh from him for securing a paper pulp contract.based private firm in the purchase of telecom equipment. In a Pickle (1996) :. 23. Sachdeva was later acquitted 21. Fodder Scam (1996) :. along with two others. to dupe the public into investing in his Rs. 24. MD.V.The scandal surfaced following CBI raids on hawala operators in Delhi in .

and Sterile Industries to rig the share prices of these companies.The Big Bull returned to the bourses. created a pyramid financial empire based on high-cost financing. The inevitable collapse happened sooner than planned. Jain's diaries that had heads rolling. 1.A passing remark heard by then Finance Minister Palaniappan . Bhansali was arrested for a few weeks and released later on bail. but by that time investors had lost over Rs. The bubble finally burst in May 1997. This was among the first retail scams in India and it was played out. in smaller avatars. 28. a smart-talking entrepreneur.1991. 27. MEHTA'S SECOND COMING (1998) :. CRB SCAM (1997) :.K. 1. Videocon International. and a merchant bank. but the damage had been done. At its peak. But it was S. for two years.000 crore. That Bhansali knew how to work the system became evident when he also managed to secure a provisional banking license. SEBI finally passed its ruling on the scam in 2001.000-crore financial conglomerate had in its ranks a mutual fund. across the country-especially in the South where financial services companies promised returns in excess of 20 per cent and decamped with the principal. he allegedly colluded with the promoters of BPL. his Rs. banning the three companies concerned from tapping the market-BPL.Another scam forged by greed and discovered through accident. This time. VANISHING COMPANIES SCAM (1998) :. a financial services company into fixed deposits. Chain Roop Bhansali. An executive in the State Bank of India Inadvertently discovered that some interest warrants issued by Bhansali were not backed by cash. Then his luck ran out. Harshad Mehta orchestrated a cover-up operation that included a high=jinks effort by officials of Bombay Stock Exchange to (illegally ) open the trading system in the middle of the night to set things right. Mehta was debarred for life form dealing in Securities Appellate Tribunal (SAT) in October 2001 29.

was accused of matchfixing. 2.Ketan Parekh's modus operandi wasn't very different from Harshad Mehta's. He and Ajay Sharma were banned from playing. had raised Rs. Savvy entrepreneurs convinced gullible investors that given the right irrigation and fertilizer inputs. would grow anywhere in the country.330. between them. KETAN PAREKH SCAM (2001) :. just another affirmation of the old saying about money not growing on trees. Later that year. till then India's cricket captain.78 crore were simply missing. not many investors have got their principals back. for that matter). The SEBI probe conducted in May 1998 revealed that while many companies are not traded on the bourses at least 80 companies that had rises Rs.Chidambaram resulted in a furore over what was badlykept secret on Dalal street. Chidambaram was told that hundreds of companies had disappeared after raising moneys form the public. Investigations continue to this day. and anything else that could be grown. DCA still investigating. Indeed.Mohammed Azharuddin. PLANTATION COMPANIES SCAM (1999) :. while Ajay Jadeja and Manoj Prabhakar were suspended for five years. the Department of Company Affairs (DCA) was asked to probe and penalize these companies. 32.563 crore from investors. plantation companies fell under the purview of neither SEBI nor Reserve Bank of India. Chidambaram ordered a probe by SEBI. they didn't even come under the scope of the Department decided to change things in 1999. strawberries. If Mehta used banker's receipts. enough investors had been gulled: 653 companies. To date. An informal scrutiny revealed that perhaps over 600 companies were missing. For. 31. 30. teak. The promoters could afford to collect money from investors and not worry about retribution (or returns. Match Fixing (2000) :.It was as innovative a swindle as any effected in the world. then Parekh used pay orders to ramp up the prices of his favourite .

Tehelka. the impact was far greater. Tehelka Sting (2001) :. the Trust had mirrored the actions of the bull cartel.The mayhem that wiped off over Rs 1. Disclosures of the mastermind behind it.The sheer magnitude of the racket was shocking-it caused a loss of Rs 30. was arrested in May 2002. CSFB. The result? When the market tanked. the Chairman of UTL Evidently. Although the total amount involved in the scam was just Rs.Under the pretext of gilt trading. 35. for the 18 months that PSS was Chairman of UTI. and Zee (Rs. Abdul Karim Telgi. First Global. CEO of the firm. Rs 600 crore was swindled from over 25 cooperative banks in Maharashtra and Gujarat by a Navi Mumbai-based brokerage firm Home Trade.000 crore to the exchequer. Investigative journalism turned another corner in the country. and. in their sting operation called Operation Westend. Home Trade Scam (2002) :. Apart from money form the banking system Parekh also rerouted money from corporated like HFCL (Rs. . P. used spycams to catch army officers and politicians accepting bribes. Under pressure from the government. 33.Subramanyam. He was caught when pay-orders issued by Madhavpura Mercantile Cooperative Bank bounced. implicated top police officers and bureaucrats. SEBI investigated the scam and heads began to roll. Among them: the entire management team of BSE.S. the US-64. 340 crore) to good effect. 137 crore. in an indirect connection. Apparently. Stamp Paper Scam (2003) :.15. it stepped in and leveraged a dip in the NASDAQ to bear down stock prices. Sanjay Agarwal.scrips (the K-10). including its president Anand Rathi. when a bear cartel sensed Parekh was in trouble. so did the NAV of its holy cow. Stockmarket Scam (2001) :. 425 crore).000 crore in the markets in March 2001 was masterminded by the Pentafour bull Ketan Parekh. 34. He was arrested in December 2002 and banned from acccessing the capital market for 14 years. 36. an online news portal. The resultant slump in the markets happened soon after Finance Minister Yashwant Sinha presented what he considered his best budget ever.

Spain. and 20 percent by British international market dominated by socio cultural politics. Germany)aerospace firms. Mkt 5708 Ethics — Presentation Transcript • 1. Bombardier and Embraer may benefit in short term due to . Airbus is an unwieldy confederation market. Response of Public Relations Staff of Airbus4. Spain. Conclusion & Thoughts to ponder! 2 • 3.Aerospace. Liew Kok Hong MKT 5708 1 • 2. Table of Contents1. Ali & Ralph Yew 17 July 2010 MKT 5708 – International Marketing Facilitator: Mr. market. Who Benefits and Who Suffers from Ethical Lapses of Airbus?3. Airbus is 80 percent owned by the The challenges of business topublicly traded European Aeronautic Defence and sustain in a competitive unethicalSpace Company. would the outcome b e different?7. The International unethical The International unethical leadership management issues leadership management issues due to the impacts of socio-culture due to the impacts of socio-culture•Airbus and politics in International and politics in InternationalStarted in 1970.Douglas-activities. Germany. for the Airbus A400 and China for the A320 series. What steps from Boeing to counter such competition 5. The final assembly lines used by Airbus “TRADE WAR”are in France. Douglas.of four European (France. Who benefits from Airbus lapses in ethics •Competitor like Boeing. How Boeing and Airbus behaves in marketing their aircraft around the world?6. Ng Wun Shi. Lockheed. Airbus and McDonnellBusiness ethics is the study of business situations. Suggestions 8. Introduction & Business Issues 2. Introduction Business Issues•Casestudy Intense Competition – Boeing. and decisions where issues are right orwrong are addressed. Natwar Singh was unceremoniously dropped from the Cabinet when his name surfaced in the Volcker Report on the Iraq oil-forfood scam 37.Oil-for-Food Scandal (2005) :.K. Airbus and McDonnell Lockheed. UK. Intense Competition – Boeing. Group 2 : Ethics And AirbusGroup Member : Shakeela. How do you differentiate Airbus accused of giving bribe to Airbus accused of giving bribe tobetween "Doing what is right" and "Doing the right get business orders get business ordersthing the right way"? International politics and sosio-cultural play a big role in the International business. If France adopted OECD convention on bribery. 3 • 4.

Airbus Senior-Why? – Because Airbus denied paying off the VP in France. This flight and the companyslong term efforts are considered big strides . associates and of course Airbus Ind.. former transport minister and the investigation took place. because it involved the Canadian prime Minster. . unwillingness of Airbus and the French government to cooperate to answer the CBI (Central Bureau Investigation) questions.Because they received a large sum of unaccountedorders when Mallah provided the watchdog’s and kickbacks from Airbus for the purchases made inMinistry of Finance full details of ALAFCO’s orders 1985. 5 • 6.•Third the middleman (s) .•Second the Canadian government because the people loosedtheir trust to them . This is mainlyyears.failed and when the Ministry of Finance knew he full . Airbus suffered when it lost a. Gandhi’s file on this order vanished.for the cargo planes.Suffered by Airbus because they lost the deal / .Why? Because for a long time no has come frontfine of $268 million and sentenced to prison for 10 to expose the corruption they found. Response from Public Relation on Airbus lapsesThe Public Relation staffs should make. 4 • 5. subsidiary International Aircraft Leasing (IAL) and.Benefitted ALAFCO’s El Fekih and KAC’s Al . Providing Damage Control assistance.Benefitted Karlheinz Schreiber.Benefitted Airbus because the purchase were Mounties and Banksmade for $240 million. The three men (former minister of .Suffered by Air Canada as it took a long time forforeign affair.proper researches on the truth of the criticism and make correctivestatement in the same articles to protect save the image of Airbus.-provide press releases including comments clear and enforceableguidelines for the way in to defend itself from this sort of competition withBoeing.Suffered by Syrian Air as it has incurred big the Canadian PM Brian Mulroney and Airbus Ind. .Why? This is mainly due to the noncompliance anddetails they cancelled the orders. and also it made badreputation in international marketing for itself. Who suffers from Airbus lapses in ethics•First airbus suffers because after this scandal customers willmake deals very carefully with airbus .Syrian Scandal.develop biofuel that could be used by 2030. some people in Shell companySyrian officials.Why? Because Mishari’s plans to bypass formal deal when the Indian Government has declined thegovernment approval by forming ALAFCO has purchase of 43 Airbus planes worth $2 billion.middlemen Munir Abu Khaddur) also had to pay a . .financial lost.Benefitted Rajiv Gandhi and his Indian AirlinesMishari & Airbus for the first few planes purchased.Airbus lapsesKuwaiti Kickbacks India Ink.-Promote Airbus CSR activities to create a better image of Airbus. after that they couldnt easily work ininternational marketing•Other airlines and state government for purchases and largepayments made to Airbus ie lost of Sabena Air.Later in year 2000.

Each Party shall take such measures as may be necessary to establish that it is a criminaloffence under its law for any person intentionally to offer. Difference between Boeing and Airbus MarketingBoeing- Competitive price and quality & Influence power of US GovernmentReason-Long history in the market-Big customer based. How would that be different for Airbus if France adopted OECD convention on anti-bribery•Airbus will have to toe the line in all its international business dealing if Franceadopted OECD convention on anti-bribery. achieve Cost efficiency-A lot of country relied on US Government on the economy and securityAirbus-Offer high “commission” to middleman & politiciansReason-Middleman able to influence or even make decision for thestate politicians 8 • 9. or authorisation of an act of bribery of a foreign public official shallbe a criminal offence.•Transparent in all the business deal and prevent unfair dealing. Each Party shall take any measures necessary to establish that complicity in. in order that theofficial act or refrain from acting in relation to the performance of official duties. How Boeing Deal with Competition•Building Boeing reputation as Bribery Free Company. aiding and abetting.towards environmentallyfriendly aero planes. would HAVE AGREED AS FOLLOWS:Article 1 . whether directly or through intermediaries. The OECD convention on briberyThe OECD convention on combating bribery.-Other CSR activities such as Airbus should have build new Aerospace &aeronautical design Engineering schools and provide free tuition fees toboost its image.3.The Offence of Bribery of Foreign Public Officials1. for that official or for a third party. 6 • 7. The offences set out in paragraphs 1 and 2 above are hereinafter referred to as “bribery offoreign public official” ECU MKT 5708 9 • 10.•Airbus’s reputation and scandal in the . promise or giveany undue pecuniary or other advantage.•Boeing used GATT to come up with the OECD convention on anti-bribery 7 • 8. includingincitement.•Boeing use US Government to coercive influence decision making ofbuyers (purchases of aircraft for exchange of US services)•Uses spy intelligence methods to obtain information of Airbus lapses anduse the info to threaten the purchaser of disclosing the unethical deals. in order to obtainor retain business or other improper advantage in the conduct of intl busines2. to a foreignpublic official. Attempt and conspiracy to bribe a foreign public official shall be criminaloffences to the same extent as attempt and conspiracy to bribe a public official of that Party. Students of this school can be bonded for some yearswith Airbus and given jobs in Airbus later. fasterand reliable.•Develop more advance aircraft which is more efficient.•Ensure All the Aircraft is build with quality and value for price.

As well as allowing organised crime to flourish.•Airbus would not have produced its latest ’s A380. Most of thecountries would have purchased Boeing in order to get US Government favors. SuggestionsA good leadership in Airbus Industrie will make the company morestronger. corruption is one of the primary obstacles to the economic development of a country. Conclusion Bribery and corruption have a very detrimental effect on an economy and the World Bank has estimated that 0.•Airbus will always be the number two successful airlines after Boeing. 12 • 13. Thoughts To Ponder! The Boeing and Airbus quests for dominance have been quite a roller-coaster ride for both with no end in sight.5% Companies need to of GDP is lost through corruption each continuously maintain integrity year. Although businesses must compete fairly and honestly but again it is a question of doing the right thing the right way.•The competition would have no reason to attack Airbus’s business practices ofusing middlemen and lobbyist to secure new overseas Government’s contract•Airbus sales would have dropped badly and lost millions of dollars.•Due to the lost in business Airbus would have to retrench its workers. The history of their competition provides a good case study for best-practices in strategic planning. • 12.Air Canada could have been avoided.•Airbus would have to report to their ethnic committee in all international dealing andthe move result in good corporate governance. Agents who will abide with standardagents and suppliers manufactures’ rules.Promote Go green environment clean air and less carbon emission bio-fuels. Create a good image and brand building. advantage and anti-competitive practices.Improve the technology quality and performance in order to cut downon turn-around time will bring more profits to Airbus. and transparency when expanding their international Engaging in corrupt practices also business to new geographic creates a very unfavourable business market if they want their environment by encouraging unfair business to sustain for a long term. So are we to follow their socio-culture? Some country men want business to be as “If you go to Rome do as the . it undermines the rule of law.Elimination of middleman is a must to cut down on unnecessary payingof kickbacks and bribes to the polititions and top level managementpeople. although the involvement of sociocultural to politics isprominent to obtain big orders. 10 • 11. There will be no more seaside villas in Mexico or big shoppingplaza’s in Kuwait for corrupted men. so what is the right thing and the right way? Bribing and receiving kickback are a norm life style & culture in many countries. weakens trust in public institutions and challenges democratic principles.Instead establish agents with standardized minimal commissionpayments to the appointed agents.

Follow the ride and their political socio-culture???. So if you want to do Business and survive the roller coaster ride.Romans do”. . there are times you have to do what the Roman do in their country.

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