HARSHAD MEHATA SCAM

Harshad Shantilal Mehta (Hindi: ) was an Indian stockbroker. He is alleged to have engineered
the rise in the BSE stock exchange in 1992. Exloiting several looholes in the banking s!ste"# $ehta
and his associates sihoned o%% %&nds %ro" inter'bank transactions and bo&ght shares heavil! at a
re"i&" across "an! seg"ents# triggering a rise in the Sensex. (hen the sche"e was exosed# banks
started de"anding their "one! back# ca&sing the collase. He was later charged with )2 cri"inal
o%%enses# and "ore than *++ civil action s&its were %iled against hi". $ehta died in 2++2 with "an!
litigations still ending against hi"
Earl! li%e
Harshad Shantilal $ehta was born on 29 ,&l! 19-. at /aneli $oti# a village o% 0a1kot 2istrict in a 3&1arati
,ain %a"il! o% "odest "eans. His earl! childhood was sent in $&"bai (4andivali)# where his %ather was
a s"all'ti"e b&siness"an. 5ater# the %a"il! "oved to 0ai&r in 6hattisgarh a%ter doctors advised his
%ather to "ove to a drier lace on acco&nt o% his health. $ehta st&died in Hol! 6ross Higher Secondar!
School# B!ron Ba7ar# 0ai&r..
He traded in the Stock $arket on the Bo"ba! Stock Exchange and had an exensive li%est!le. He lived in
a 1-#+++ s8&are %eet (1#.++ "
2
) aart"ent# which had a swi""ing ool as well as a gol% atch. B! 199+#
$ehta had risen to ro"inence in the stock "arket. He was b&!ing shares heavil!. 9he shares which
attracted attention were those o% :ssociated 6e"ent 6o"an! (:66). 9he rice o% :66 was bid & to 0s
1+#+++. (hen asked# $ehta &sed the relace"ent cost theor! as an exlanation. .
9hro&gh the second hal% o% 1991 $ehta had earned the sobri8&et o% the ;Big B&ll<# beca&se he was said to
have started the b&ll r&n. =n :ril 2># 1992# 1o&rnalist S&cheta 2alal exosed $ehta?s illegal "ethods in a
col&"n in 9he 9i"es o% India. $ehta was diing illegall! into the banking s!ste" to %inance his b&!ing.
9he a&thors exlain: @9he cr&cial "echanis" thro&gh which the sca" was e%%ected was the read! %orward
(0A) deal. 9he 0A is in essence a sec&red short'ter" (t!icall! 1-'da!) loan %ro" one bank to another.
6r&del! &t# the bank lends against govern"ent sec&rities 1&st as a awnbroker lends against 1eweller.
9he borrowing bank act&all! sells the sec&rities to the lending bank and b&!s the" back at the end o% the
eriod o% the loan# t!icall! at a slightl! higher rice.B It was this read! %orward deal that $ehta and his
acco"lices &sed with great s&ccess to channel "one! %ro" the banking s!ste".
: t!ical read! %orward deal involved two banks bro&ght together b! a broker in lie& o% a co""ission. 9he
broker handles neither the cash nor the sec&rities# tho&gh that wasn<t the case in the lead'& to the sca".
@In this settle"ent rocess# deliveries o% sec&rities and a!"ents were "ade thro&gh the broker. 9hat is#
the seller handed over the sec&rities to the broker# who assed the" to the b&!er# while the b&!er gave
the che8&e to the broker# who then "ade the a!"ent to the seller. In this settle"ent rocess# the b&!er
and the seller "ight not even know who" the! had traded with# either being known onl! to the broker.B
9his the brokers co&ld "anage ri"aril! beca&se b! now the! had beco"e "arket "akers and had
started trading on their acco&nt. 9o kee & a se"blance o% legalit!# the! retended to be &ndertaking the
transactions on behal% o% a bank.
:nother instr&"ent &sed was the bank receit (B0). In a read! %orward deal# sec&rities were not "oved
back and %orth in act&alit!. Instead# the borrower# i.e.# the seller o% sec&rities# gave the b&!er o% the
sec&rities a B0. :s the a&thors write# a B0 @con%ir"s the sale o% sec&rities. It acts as a receit %or the
"one! received b! the selling bank. Hence the na"e ' bank receit. It ro"ises to deliver the sec&rities
to the b&!er. It also states that in the "ean ti"e# the seller holds the sec&rities in tr&st o% the b&!er.B
Having %ig&red o&t his sche"e# $ehta needed banks which iss&ed %ake B0s# or B0s not backed b! an!
govern"ent sec&rities. @9wo s"all and little known banks ' the Bank o% 4arad (B=4) and the $etroolitan
6o'oerative Bank ($6B) ' ca"e in hand! %or this &rose. 9hese banks were willing to iss&e B0s as
and when re8&ired# %or a %ee#B the a&thors oint o&t. =nce these %ake B0s were iss&ed# the! were assed
on to other banks and the banks in t&rn gave "one! to $ehta# ass&"ing that the! were lending against
govern"ent sec&rities when this was not reall! the case. 9his "one! was &sed to drive & the rices o%
stocks in the stock "arket. (hen ti"e ca"e to ret&rn the "one!# the shares were sold %or a ro%it and the
B0 was retired. 9he "one! d&e to the bank was ret&rned.
9he ga"e went on as long as the stock rices ket going &# and no one had a cl&e abo&t $ehta<s
"od&s oerandi. =nce the sca" was exosed# tho&gh# a lot o% banks were le%t holding B0s which did not
have an! val&e ' the banking s!ste" had been swindled o% a whoing 0s .#+++ crore. (hen the sca"
was revealed# the 6hair"an o% the Ci1a!a Bank co""itted s&icide b! 1&"ing %ro" the o%%ice roo%. He
knew that he wo&ld be acc&sed i% eole ca"e to know abo&t his involve"ent in iss&ing che8&es to
$ehta. $ , /herwani o% D9I also died in this scandal.
$ehta "ade a brie% co"eback as a stock "arket g&r&# giving tis on his own website as well as a weekl!
newsaer col&"n. 9his ti"e aro&nd# he was working with owners o% a %ew co"anies and
reco""ended onl! the shares o% those co"anies. 9his ga"e# too# did not last long.
2eath
S9=64 broker $r Harshad $ehta died at 9hane civil hosital %ollowing a brie% heart ail"ent. $r $ehta#
who was .)# is s&rvived b! his wi%e and two sons.
$r $ehta was &nder 1&dicial c&stod! in the 9hane rison a%ter a secial co&rt re"anded hi" and his two
brothers# $r :shwin $ehta and $r S&dhir $ehta# in a %resh case o% "isaroriation. :ccording to
so&rces# $r $ehta co"lained o% chest ain late last night and was ad"itted to the civil hosital where he
died aro&nd 12..+ a.". 9he bod! was "oved to ,.,. Hosital %or ost'"orte".
$r $ehta and his brothers were arrested b! the 6BI on Eove"ber 9 %or allegedl! FF"isaroriating (in
1992) "ore than 2) lakh shares o% abo&t 9+ co"anies# incl&ding Sensex heav!weights s&ch as :66
and Hindalco# thro&gh %orged share trans%er %or"s. The total value of the shares was placed at Rs 250
crore. The two brothers have been granted temporary bail for five days following the death of Mr Harshad
Mehta.
$r Harshad $ehta started his career as an e"lo!ee o% Eew India :ss&rance 6o"an! b&t later 8&it the
1ob to la! the stock "arket. B! 1991# $r $ehta had beco"e the "ost recognisable and revered icon o%
the stock "arket. 6onsidered a %inancial geni&s b! "an!# he was nickna"ed the Big B&ll who single'
handedl! decided the co&rse the "arkets wo&ld l!.
:t the eak o% his glor!# $r. $ehta lived in a 1-#+++ s8.%t. ho&se with its rivate swi""ing ool and gol%
atch. His lavish li%est!le and %lash! cars were the st&%% known onl! o% "ovie stars.
His FFb&ll run, however, ended in pril !""2 when the stoc# mar#et scam bro#e out bringing down in its
wa#e several financial entities and causing despair to millions of investors. The man who was singularly
credited with the rise of the mar#et was also s$uarely blamed for the crash.
$r $ehta?s %all %ro" grace was as %ast as his "eteoric rise. Investigations revealed that his FF&nending
reso&rces were actually siphoned off from the ban#ing system. ccording to investigators, he had devised
an ingenious way of using ban# receipts to feed the stoc# mar#et fren%y.
He was arrested and banished %ro" the stock "arket with investigators holding hi" resonsible %or
ca&sing a loss o% "ore than 0s .#+++ crore to vario&s entities.
$r. $ehta again raised a %&rore in 199- when he "ade a &blic anno&nce"ent that he had aid 0s 1
crore to the then 6ongress /resident and /ri"e $inister# $r. /.C. Earasi"ha 0ao# as donation to the
art! %or getting hi" FFo%% the hook.
9he decade'long t&g o% war with the law that started in 1992 was contin&ing when $r. $ehta died. He had
altogether 2G cases registered against hi". 9he trial o% all excet one# are still contin&ing in vario&s co&rts
in the co&ntr!. $arket watchdog# Sec&rities and Exchange Board o% India# had recentl! banned hi" %or li%e
%ro" stock "arket'related activities.
$r. $ehta erhas had as "an! ad"irers as critics. I% he was loathed b! so"e# he was revered b! "an!.
B&t al"ost all o% the" ad"it that he ca&sed a FFchange in the &ndian stoc# mar#et, permanently.
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B! the ti"e he died# $ehta had been convicted in onl! one o% the "an! cases %iled against hi".
9he $ehta scandal was ortra!ed in a recent Hindi "ovie# 3a%la.
H
Bo%ors scandal
9he Bofors scandal was a "a1or corr&tion scandal in India in the 19G+s and 199+sJ initiated b!
6ongress oliticians and i"licating the ri"e "inister# 0a1iv 3andhi and several others who were
acc&sed o% receivingkickbacks %ro" Bo%ors :B %or winning a bid to s&l! India?s 1-- "" %ield howit7er.
9he scale o% the corr&tion was %ar worse than an! that India had seen be%ore and directl! led to the
de%eat o% 3andhi?s r&lingIndian Eational 6ongress art! in the Eove"ber 19G9 general elections. It has
been sec&lated that the scale o% the scandal was to the t&ne o% .+++ "illion r&ees.
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9he case ca"e to
light d&ring Cishwanath /rata Singh?s ten&re as de%ence "inister# and was revealed thro&gh
investigative 1o&rnalis" b! 6hitra S&bra"ania" and E. 0a" o% the newsaers the &ndian
'(press and The Hindu.
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9he "iddle"an associated with the scandal was =ttavio K&attrocchi# an Italian b&siness"an who
reresented the etroche"icals %ir" Sna"rogetti. K&attrocchi was reortedl! close to the %a"il! o%
3andhi and e"erged as a ower%&l broker in the 19G+s between big b&sinesses and the Indian
govern"ent. (hile the case was being investigated# 0a1iv 3andhi was assassinated on $a! 21# 1991 %or
an &nrelated ca&se b! the 599E. In 199)# the Swiss banks released so"e -++ doc&"ents a%ter !ears o%
legal battle and the 6entral B&rea& o% Investigation (6BI) %iled a case against K&attrocchi# (in 6hadha#
0a1iv 3andhi# the de%ence secretar! S. 4. Bhatnagar and a n&"ber o% others.
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In the "eanti"e# (in
6hadha also died.
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$eanwhile Aebr&ar! -# 2++.# the 2elhi High 6o&rt 8&ashed the charges o% briber! against 0a1iv 3andhi
and others#
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b&t the case is still being tried on charges o% cheating# ca&sing wrong%&l loss to the
govern"ent# etc. =n $a! >1# 2++-# the High 6o&rt o% 2elhi dis"issed the Bo%ors case allegations against
the British b&siness brothers# Shrichand# 3oichand and /rakash Hind&1a# b&t charges against others
re"ain.
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In 2ece"ber 2++-# $r B. 2aat# the additional solicitor general o% India# acting on behal% o% the Indian
3overn"ent and the 6BI# re8&ested the British 3overn"ent that two British bank acco&nts o% =ttavio
K&attrocchi be &n%ro7en on the gro&nds o% ins&%%icient evidence to link these acco&nts to the Bo%ors
a!o%%. 9he two acco&nts# containing L > "illion and M1 "illion# had been %ro7en. =n ,an&ar! 1*# the
Indian S&re"e 6o&rt directed the Indian govern"ent to ens&re that =ttavio K&attrocchi did not withdraw
"one! %ro" the two bank acco&nts in 5ondon. 9he 6BI# the Indian %ederal law en%orce"ent agenc!# on
,an&ar! 2># 2++* ad"itted that ro&ghl! 0s 21 crore# abo&t DS M..* "illion# in the two acco&nts have
alread! been withdrawn b! the acc&sed. 9he British govern"ent released the %&nds later.
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9he deals
cost the 3overn"ent o% India an extra 1*+ crore r&ees.
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However# on ,an&ar! 1*# 2++*# 6BI clai"ed in an a%%idavit %iled be%ore the S&re"e 6o&rt that the! were
still &rs&ing extradition orders %or K&attrocchi. 9he Interol# at the re8&est o% the 6BI# has a long'
standing red corner notice to arrest K&attrocchi.
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K&attrocchi was detained in :rgentina on * Aebr&ar!
2++)# b&t the news o% his detention was released b! the 6BI onl! on 2> Aebr&ar!. K&attrocchi was
released b! :rgentinian olice. However# his assort was i"o&nded and he was not allowed to leave
the co&ntr!.
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However# as there was no extradition treat! between India and :rgentina# the case was resented in the
:rgentine S&re"e 6o&rt. 9he govern"ent o% India lost the extradition case as the govern"ent o% India
did not rovide a ke! co&rt order which was the basis o% K&attrochi?s arrest. In the a%ter"ath# the
govern"ent did not aeal this decision beca&se o% dela!s in sec&ring an o%%icial English translation o% the
co&rt?s decision.
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: 2elhi co&rt rovided te"orar! relie% %or K&attrocchi %ro" the case# %or lack o% s&%%icient evidence
against hi"# on . $arch 2+11.
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However the case is still going on. 2esite the controvers! the Bo%ors
g&n was &sed extensivel! as the ri"ar! %ield artiller! d&ring the 4argil dis&te with /akistan and gave
India ?an edge? against /akistan according to battle%ield co""anders.
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:bd&l 4ari" 9elgi
Abdul Karim Telgi (born 19*1) is a convicted co&nter%eiter %ro" India. He earned "one! b! rinting
co&nter%eit sta" aer in India.
HeditIEarl! li%e
9elgi?s "other was Sharie%abee 5adsaab 9elgi#
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and his %ather was an e"lo!ee o% Indian 0ailwa!s.
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His
%ather died while he was !o&ng. 9elgi aid %or his own ed&cation at Sarvoda!a Cid!ala!a# an English
"edi&" school# b! selling %r&it and vegetables on trains. Event&all! he "oved to Sa&di :rabia. Seven
!ears later# he ret&rned to India# at which ti"e he began a career in co&nter%eiting# originall! %oc&sing on
%ake assorts.
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HeditI6o&nter%eiting career
9elgi "oved to "ore co"lex co&nter%eiting when he began to co&nter%eit sta" aer. He aointed >++
eole as agents who sold the %akes to b&lk &rchasers# incl&ding banks# ins&rance co"anies# and
share'broking %ir"s. 9he si7e o% the sca" was esti"ated to be "ore than 2+#+++ crore (DSM. billion).
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=ne asect o% the scandal that ca&sed "&ch concern was that it re8&ired the involve"ent o% "an! olice
o%%icers and other govern"ent e"lo!ees. Aor exa"le# one :ssistant /olice Investigator was %o&nd to
have a net worth o% over 1++ crore (DSM2+ "illion)# desite "aking a salar! o% onl! 9#+++ (DSM1G+) er
"onth.
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=n 1) ,an&ar! 2++* 9elgi and several associates were sentenced to ten !ears? rigoro&s i"rison"ent.
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=n 2G ,&ne 2++) 9elgi was sentenced to rigoro&s i"rison"ent %or 1> !ears %or another asect o% the
scandal. He was also %ined a 0s 1++ crore. 9he Inco"e 9ax 2eart"ent re8&ested that 9elgi?s roert!
be con%iscated to a! the %ine.
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HeditI$ovie
Mudran# )The *tamp+ is a %il" based on the sta" scandal. It was %inished in 2++G# b&t 9elgi %iled legal
challenges to revent its release.
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9elgi alleged that the details covered in the %il" wo&ld da"age his legal
aeals. :s o% 2+11# the %il" has not !et been released.
:darsh Ho&sing Societ! Sca"
Aro" (ikiedia# the %ree enc!cloedia
6oordinates: 1G.9+9>NE )2.G1*)NE9he Adarsh Housing Society is a cooerative societ! in the cit!
o% $&"bai in India. It was reserved %or the war widows and veterans o% the4argil (ar.
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:darsh Ho&sing in ,&l!?2+11.
[edit]Corruption allegations
In 2+1+# the Indian "edia bro&ght to &blic the alleged violations o% r&les at vario&s hases o% constr&ction in
the :darsh Societ!. K&estions were raised on the "anner in which aart"ents in the b&ilding were allocated to
b&rea&crats# oliticians and ar"! ersonnel who had nothing to do with 4argil (ar and the wa! in which
clearances were obtained %or the constr&ction o% the b&ilding o% the :darsh Societ!.
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9he :darsh societ! high'
rise was constr&cted in the 6olaba localit! o%$&"bai# which is considered a sensitive coastal area b! the
Indian 2e%ence %orces and ho&ses vario&s Indian 2e%ense establish"ents.
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9he societ! is also alleged to have
violated the Indian environ"ent "inistr! r&les.
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:ctivists like $edha /atkar had been tr!ing to &ncover the
roble"s since at least 2++..
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It had led to resignation o% the then 6hie% $inister# :shok 6havan.
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Several in8&iries have been ordered b! the ar"! and the 3overn"ent to robe into the irreg&larities.
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So"e o%
the c&rrent occ&ants o% the %lats in the :darsh co'oerative societ! b&ilding have o%%ered to vacate their %lats at
the earliest# den!ing allegations that the! were alloted %lats beca&se the! in%l&enced or heled# in so"e
"anner# the constr&ction o% the societ! b! violating the r&les.
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6oncerns and controversies over the 2+1+
6o""onwealth 3a"es
Aro" (ikiedia# the %ree enc!cloedia
: n&"ber o% concerns and controversies s&r%aced be%ore the 2+1+ 6o""onwealth 3a"esin Eew
2elhi# India# which received widesread "edia coverage both in India (the host nation) and internationall!.
9he 6o""onwealth 3a"es was severel! criticised b! several ro"inent Indian oliticians and social activists
beca&se billions o% dollars have been sent on the sorting event desite the %act that India has one o% the
world?s largest concentration o% oor eole.
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:dditionall!# several other roble"s related to the 2+1+
6o""onwealth 3a"es have been highlighted b! Indian investigative agencies and "edia o&tletsJ these
incl&de O serio&s corr&tion b! o%%icials o% the 3a"es? =rganising 6o""ittee# dela!s in the constr&ction o%
"ain 3a"es? ven&es# in%rastr&ct&ral co"ro"ise# ossibilit! o% a terrorist attack# and excetionall! oor ticket
sales be%ore the event.
Child labour
6EE has broadcast evidence showing children# as !o&ng as seven# being &sed in the constr&ction o% the
ga"e ven&es. :ccording to Siddharth 4ara# who rovided 6EE with the evidence# he doc&"ented 1.
cases o% child labor within a %ew da!s. In rel! to a 8&estion whether it co&ld have been 1&st a case o% kids
being resent at the constr&ction site along with their arents# he relied: PIt?s not 1&st kids la!ing in the
dirt or &sing a ha""er as a to!.P He %&rther stated abo&t the kids: P9he!?re told to do the work and the!
1&st do the work. 9he! don?t know that the! sho&ld be in school or that the! sho&ld be la!ing.P
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Even tho&gh the Eew 2elhi chie% "inister Sheila 2ikshit clai"ed that nobod! had aroached her#
according to 6EE# the! had tried to contact her as %ar back as 2> ,&l! 2+1+. In site o% reeated atte"ts#
according to the"# no o%%icial rel! was ever "ade.
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oor tic!et sales and attendance
9he start o% the 3a"es saw extre"el! oor ticket sales# with "an! ven&es near e"t!.
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In a ress
con%erence# organising chair"anS&resh 4al"adi ad"itted that there were roble"s# and bla"ed e"t!
ven&es on ticket booths not being set & o&tside stadi&"s.
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6o""onwealth 3a"es chie% $ike Aennell
ad"itted that "an! ven&es had been nearl! e"t! on the oening da! o% the 3a"es# sa!ing P: n&"ber
o% ven&es do not have lots o% sectators H...I one area which ca&ses &s concernP.
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=n the second da! o%
co"etition# less than 1++ eole %illed the hocke! ven&eQthe 19#+++'seat $26 Stadi&". 5ess than 2+
eole watched the %irst tennis "atch o% the to&rna"ent in the -#+++'seat tennis stadi&"# and 1&st -G %ans
watched the netball oening "atch.
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=ne Indian co"etitor tried to b&! tickets %or relatives online# onl! to be in%or"ed b! the website that
tickets were sold o&t. (hen he arrived to co"ete# he %o&nd the ven&e to be e"t!.
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9he streets o% 2elhi were deserted %or the c!cling road races and walking event.
"pening ceremony
9he :&stralian 6o""onwealth contingent exressed %r&stration over the oening cere"on!# in which
there were clai"s athletes and delegation s&ort sta%% were Ptreated like cattleP and s&b1ected to
Pdisgrace%&lP and &nbearable conditions.
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:&stralia?s che% de "issionSteve $oneghetti co"lained
abo&t the athletes being traed in Pabsol&te ca&ldron conditionsP &nder the "ain stadi&" be%ore
"arching %or the oening cere"on!. 9he :&stralians were st&ck in a t&nnel# where $oneghetti described
the te"erat&re as exceeding .+ N6 (1+. NA) d&e to a lack o% airconditioning and ventilation. (hen
atte"ting to "ove o&t# the :&stralian delegation was stoed b! sta%%. (hen the contestants were %inall!
able to "ove o&t into the arena# the! were described as being e"otionall! a%%ected.
Safety and security concerns
S"all "onke!s roa" 2elhi?s streets and re%er heavil! &rbani7ed areas with lent! o% living sace a"ong
b&ildings.
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9he! cannot be killed beca&se "an! Indians see the" as sacred so instead a larger#
do"esticated "onke!# the lang&r# is bro&ght in to scare awa! the s"aller "onke!s.
=n the second da! o% the ga"es# three Dgandan o%%icials were in1&red b! a "al%&nctioning sec&rit! barrier
at the ga"es? village# and a senior o%%icial %ro" that co&ntr! raised allegations o% discri"ination b! Indian
o%%icials. Dganda?s sorts "inister lashed o&t at Indian o%%icials and de"anded an aolog! %or the
accident. 9he o%%icials had c&ts and br&ises and were hositali7ed overnight %or observation.
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9he
chair"an o% the 3a"es? =rganising 6o""ittee# S&resh 4al"adi# aologi7ed to the Dgandan High
6o""issioner to India %or the %reak car accident.
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B!rra1& 0a"alinga 0a1&
#amalinga #a$u is a %or"er Indian I9 Ind&strialist# who %o&nded Sat!a" 6o"&ters in 19G) and was a
6hair"an o% the co"an! &ntil ,an&ar! )# 2++9.
Earl! li%e
0a"alinga 0a1& was born on Sete"ber 1*# 19-. in a %a"il! o% %ar"ers. He did his B. 6o" %ro" :ndhra
5o!ola 6ollege at Ci1a!awada and s&bse8&entl! did his $B: %ro" =hio Dniversit!# DS:. He was enrolled
in the Exec&tive =wnerR/resident $anage"ent /rogra" (=/$) at Harvard B&siness School.
H1I
:%ter ret&rning to India in 19))# 0a"alinga 0a1& "oved awa! %ro" the traditional agric&lt&re b&siness and
set & a sinning and weaving "ill na"ed Sri Sat!a". . 9herea%ter he shi%ted to the real estate b&siness
and started a constr&ction co"an! called Sat!a" 6onstr&ctions. In 19G)# 0a"alinga 0a1& %o&nded
Sat!a" 6o"&ter Services along with one o% his brothers'in'law# 2CS 0a1&. 9he co"an! went &blic in
1992. (ith the la&nch o% Sat!a" In%owa! (Si%!) Sat!a" beca"e one o% the %irst to enter Indian internet
service "arket.
H2I
:cco&nting scandal
0a"alinga 0a1& resigned %ro" the Sat!a" board a%ter ad"itting to cheating six "illion shareholders.
H>I
H.I
:%ter being held in H!derabad?s 6hanchalg&da 1ail on charges incl&ding cheating# e"be77le"ent
and insider trading# 0a1& was granted bail on 1G :&g&st 2+1+.
H-I
: botched ac8&isition atte"t involving $a!tas in 2ece"ber 2++G led to a l&nge in the share rice o%
Sat!a".
H*I
In ,an&ar! 2++9# 0a1& indicated that Sat!a"?s acco&nts had been %alsi%ied over a n&"ber o%
!ears.
H*I
He ad"itted to an acco&nting d&er! to the t&ne o% 1.+++crore r&ees or 1.- Billion DS
2ollars and resigned %ro" the Sat!a" board on ,an&ar! )# 2++9.
H)IHGI
In his letter o% resignation# 0a1&
described how an initial cover'& %or a oor 8&arterl! er%or"ance escalated: PIt was like riding a tiger# not
knowing how to get o%% witho&t being eaten.P
H9I
0a1& and his brother# B 0a"a 0a1&# were then arrested b! the 6I2 :ndhra /radesh olice headed b! $r.
C S 4 4a&"&di# I/S on charges o% breach o% tr&st# consirac!# cheating# %alsi%ication o% records. 0a1& "a!
%ace li%e i"rison"ent i% convicted o% "isleading investors.
H1+I
0a1& had also &sed d&""! acco&nts to
trade in Sat!a"?s shares# violating the insider trading nor".
H11I
It has now been alleged that these acco&nts "a! have been the "eans o% sihoning o%% the "issing
%&nds.
H12I
0a1& has ad"itted to overstating the co"an!?s cash reserves b! DS2M 1.- billion.
H12IH1>I
0a1&
was hositali7ed in Sete"ber 2++9 %ollowing a "inor heart attack and &nderwent angiolast!. 0a1& was
granted bail on condition that he sho&ld reort to the local olice station once a da! and that he sho&ldn?t
atte"t to ta"er with the c&rrent evidence. 9his bail was revoked on 2* =ctober 2+1+ b! the S&re"e
6o&rt o% India and he has been ordered to s&rrender b! G Eove"ber 2+1+.
H1.I
9he eole o% his native
village# 3aragaarr&# hail the develo"ent works &ndertaken b! the B!rra1& Ao&ndation# the charitable
ar" o% Sat!a".
H1-I
0a"alinga 0a1& was 3ranted a bail b! the s&re"e co&rt on .th nove"ber 2+11 a%ter
the 6entral B&rea& o% investigation %ailed to chargesheet 0a1& within the stat&tor! eriod.
H1*I
S&re"e co&rt verdict
9he S&re"e 6o&rt on Eove"ber .#2+11 granted bail to 0a"alinga 0a1&# %o&nder and %or"er chair"an
o% o&tso&rcing %ir" Sat!a" 6o"&ter Services 5td# in a M1.- billion %inancial %ra&d case# a%ter the 6entral
B&rea& o% Investigation (6BI) %ailed to %ile charges on ti"e.
H1)I
$r. 0a1& said that IE0 -+.. billion # or M1.+.
billion# o% the ->.* billion r&ees in cash and bank loans the co"an! listed in assets at the end o% its
second 8&arter that ended in Sete"ber 2++G were nonexistent
The Fodder Scam
If you havent heard of Bihars fodder scam of 1996, you might still be able to recognize it by the
name of Chara Ghotala , as it is !o!ularly "no#n in the vernacular language$
In this corru!tion scandal #orth %s$9&& crore, an unholy ne'us #as traced involved in fabrication of
vast herds of fictitious livestoc" for #hich fodder, medicine and animal husbandry e(ui!ment #as
su!!osedly !rocured$
The Hawala Scandal
)he *a#ala case to the tune of +1, million bribery scandal, #hich came in the o!en in 1996, involved
!ayments allegedly received by countrys leading !oliticians through ha#ala bro"ers$ -rom the list of
those accused also included .al /rishna 0dvani #ho #as then the .eader of 1!!osition$
)hus, for the first time in Indian !olitics, it gave a feeling of o!en loot all around the !ublic, involving
all the ma2or !olitical !layers being accused of having acce!ted bribes and also alleged connections
about !ayments being channelled to *izbul 3u2ahideen militants in /ashmir$
IPL Scam
4ell, I am running out of time and s!ace over here$ )he list of scandals in India is 2ust not ending and
becoming grave by every decade$ 3ost of us are a#are about the recent scam in I5. and
embezzlement #ith res!ect to bidding for various franchisees$ )he scandal already claimed the
!ortfolios of t#o big6#igs in the form of 7hashi )haroor and former I5. chief .alit 3odi$
Aodder Sca"
9he Aodder Sca" involved h&ndreds o% "illions o% dollars in alleged %ra&d&lent rei"b&rse"ents %ro" the treas&r!
o% Bihar state %or %odder# "edicines and h&sbandr! s&lies %or non'existent livestock.
9he %odder Scam (2evanagari: # ch,r, gho,l,) was a corr&tion scandal that involved
the e"be77le"ent o% abo&t 9-+ crore (DSM2+9 "illion) %ro" the govern"enttreas&r! o% the
eastern Indian state o% Bihar.
H1I
:"ong those i"licated in the the%t and arrested were then 6hie% $inister o%
Bihar# 5aloo /rasad Sadav# as well as %or"er 6hie% $inister# ,agannath $ishra.
H2IH>I
9he scandal led to the end
o% 5aloo?s reign as 6hie% $inister.
9he the%t sanned "an! !ears# and allegedl! involved n&"ero&s Bihar state?s ad"inistrative and elected
o%%icials across "&ltile ad"inistrations o% the Indian Eational 6ongress and the,anata 2al arties. 9he
corr&tion sche"e involved the %abrication o% Pvast herds o% %ictitio&s livestockP %or which %odder# "edicines
and ani"al h&sbandr! e8&i"ent was s&osedl! roc&red.
H1IH.I
:ltho&gh the scandal broke in 199*# the the%t
had been in rogress# and increased in si7e# %or over two decades.
H-I
Besides the "agnit&de and d&ration o% the
the%t# the sca" was and contin&es to be covered in Indian "edia d&e to the extensive nex&s between ten&red
b&rea&crats# elected oliticians and b&sinesseole that it revealed#
H*I
and as an exa"le o% the "a%ia ra1 that
has enetrated several state'r&n econo"ic sectors in the co&ntr!.
The scam
9he sca" had its origins in s"all'scale e"be77le"ent b! so"e govern"ent e"lo!ees s&b"itting %alse
exense reorts# which grew in "agnit&de and drew additional ele"ents# s&ch as oliticians and b&sinesses#
over ti"e# &ntil a %&ll'%ledged "a%ia had %or"ed.
H*I
,agannath $ishra# who served his %irst stint as the chie%
"inister o% Bihar in the "id'19)+s# was the earliest chie% "inister to be acc&sed o% knowing involve"ent in the
sca".
H)I
In Aebr&ar! 19G-# the then 6o"troller and :&ditor 3eneral o% India# 9.E. 6hat&rvedi# took notice o% dela!ed
"onthl! acco&nt s&b"issions b! the Bihar state treas&r! and deart"ents and wrote to the then Bihar chie%
"inister# 6handrashekhar Singh# warning hi" that this co&ld be indicative o% te"orar! e"be77le"ent.
HGI
9his
initiated a contin&o&s chain o% closer scr&tin! and warnings b! /rincial :cco&ntant 3enerals (/:3s) and
6:3s to the Bihar govern"ent across the ten&res o% "&ltile chie% "inisters (c&tting across art! a%%iliations)#
b&t the warnings were ignored in a "anner that was s&ggestive o% a attern b! extre"el! senior olitical and
b&rea&cratic o%%icials in the Bihar govern"ent.
H9I
In 1992# Bidh& Bh&shan 2vivedi# a olice insector with the
state?s anti'corr&tion vigilance &nit s&b"itted a reort o&tlining the %odder sca" and likel! involve"ent at the
chie% "inisterial level to the director general o% the sa"e vigilance &nit# 3. Eara!an.
H1+IH11I
In alleged rerisal#
2vivedi was trans%erred o&t o% the vigilance &nit to a di%%erent branch o% the ad"inistration# and then s&sended
%ro" his osition. He was later to be a witness as corr&tion cases relating to the sca" went to trial# and
reinstated b! order o% the ,harkhand High 6o&rt.
&'posure and investigation
5aloo /rasad Sadav# then chie% "inister o%Bihar# was a ri"e acc&sed in the %odder sca" investigation.
=n ,an&ar! 2)# 199*# the de&t! co""issioner o% (est Singhbh&" district# :"it 4hare# acted on in%or"ation
to cond&ct a raid on the o%%ices o% the ani"al h&sbandr! deart"ent in the town o% 6haibasa in the district
&nder his a&thorit!. 9he doc&"ents his tea" sei7ed# and went &blic with# concl&sivel! indicated large'scale
e"be77le"ent b! an organi7ed "a%ia o% o%%icials and b&sinesseole.
H9I
5aloo ordered the constit&tion o% a
co""ittee to robe the irreg&larities.
H12I
9here were %ears that state olice# which is acco&ntable to the state
ad"inistration# and the robe co""ittee wo&ld not investigate the case vigoro&sl!# and de"ands were raised
to trans%er the case to the 6entral B&rea& o% Investigation (6BI)# which is &nder %ederal rather than state
1&risdiction. :llegations were also "ade that several o% the robe co""ittee "e"bers were the"selves
co"licit in the sca".
H12I
: &blic interest litigation was %iled with the S&re"e 6o&rt o% India# which led to the
co&rt?s involve"ent#
H12I
and based on the &lti"ate directions iss&ed b! the s&re"e co&rt# on $arch 199*#
the Bihar High 6o&rt ordered that the case be handed over to the 6BI.
H1>I
:n in8&ir! b! the 6BI began and# within da!s# the 6BI %iled a s&b"ission to the High 6o&rt that Bihar o%%icials
and legislators were blocking access to doc&"ents that co&ld reveal the existence o% a olitician'o%%icial'
b&siness "a%ia nex&s at work.
H1.I
So"e legislators o% the Bihar 5egislative 6o&ncil resonded b! clai"ing the
co&rt had been "isin%or"ed b! the 6BI and initiating a rivilege "otion to disc&ss ossible action against
senior %ig&res in the regional head8&arters o% the 6BI# which co&ld roceed si"ilar to a conte"t o%
co&rt roceeding and res&lt in stalling the investigation or even rosec&tion o% the na"ed 6BI o%%icials.
H1.I
However# D E Biswas# the regional 6BI director# and the other o%%icials tendered an &n8&ali%ied aolog! to
the 5egislative 6o&ncil# the rivilege "otion was droed# and the 6BI robe contin&ed.
H1.I
:s the investigation
roceeded# the 6BI &nearthed linkages to the serving chie% "inister o% Bihar#5aloo /rasad Sadav and# on $a!
1+# 199)# "ade a %or"al re8&est to the %ederall!'aointed governor o% Bihar to rosec&te 5aloo (who is o%ten
re%erred b! his %irst na"e in Indian "edia).
H1-I
=n the sa"e da!# a b&siness"an# Harish 4handelwal# who was
one o% the acc&sed was %o&nd dead on train tracks with a note that stated that he was being coerced b! the
6BI to t&rn witness %or the rosec&tion.
H1-I
9he 6BI re1ected the charge and its local director# D E Biswas# ket
the aeal to the governor in lace.
H11IH1-I
ath to prosecution
: %ew da!s o% &ncertaint! %ollowed the 6BI?s re8&est to the state governor to rosec&te the chie% "inister. 9he
governor# :. 0. 4idwai# was acco&ntable to the %ederal govern"ent# and had alread! stated that he wo&ld need
to be satis%ied that strong evidence against 5aloo existed be%ore he wo&ld er"it a %or"al indict"ent to
roceed.
H1*I
9he %ederal govern"ent# led b! newl! aointed ri"e "inister Inder 4&"ar 3&1ralwho had 1&st
s&cceeded the short'lived govern"ent o% the revio&s ri"e "inister H2 2eve 3owda# consisted o%
a coalition that deended on s&ort %ro" %ederal legislators a%%iliated with 5aloo %or its s&rvival.
H11IH1)I
It was also
&nclear wh! the 6BI had so&ght the governor?s consent in the %irst lace and# when the High 6o&rt de"anded
to know wh! it was being so&ght# the 6BI stated that it was a Preca&tionar! "eas&re.P
H1GI
9he High 6o&rt#
8&estioning the tactic# warned that it wo&ld allow so"e ti"e %or the er"ission to transire# b&t i% it sensed a
dela!# it wo&ld %orce a rosec&tion on its own a&thorit!.
H1GI
=n ,&ne 1)# the governor gave er"ission %or 5aloo and others to be rosec&ted.
H19I
Aive senior Bihar
govern"ent o%%icials ($ahesh /rasad# science and technolog! secretar!J 4. :r&"&ga"# labo&r secretar!J Beck
,&li&s# ani"al h&sbandr! deart"ent secretar!J /hoolchand Singh# %or"er %inance secretar!J 0a"ra1 0a"#
%or"er :H2 director)# the %irst . o% who" were I:S o%%icers# were taken into 1&dicial c&stod! on the sa"e da!.
H2+I
H21I
9he 6BI also began rearing a chargesheet against 5aloo to be %iled in a secial co&rt. Execting to be
acc&sed and i"risoned# 5aloo %iled an anticiator! bail etition# which the 6BI oosed in a deosition to the
co&rt# listing the evidence against 5aloo.
H22I
:lso# on ,&ne 21# %earing that evidence and doc&"entation that
"ight rove essential in %&rther exosing the sca" were being destro!ed# the 6BI cond&cted raids on 5aloo?s
residence and those o% so"e relatives s&sected o% co"licit!.
H2>I
=n ,&ne 2># the 6BI %iled chargesheets against 5aloo and -- other co'acc&sed
H2.I
# incl&ding 6handradeo
/rasad Cer"a (a %or"er &nion "inister)# ,agannath $ishra (%or"er Bihar chie% "inister)# two "e"bers o%
5aloo?s cabinet (Bhola 0a" 9oo%ani and Cid!a Sagar Eishad)# three Bihar state asse"bl! legislators (04 0ana
o% the ,anata 2al# ,agdish Shar"a o% the 6ongress art!# and 2hr&v Bhagat o% the Bharati!a ,anata /art!) and
so"e c&rrent and %or"er I:S o%%icers (incl&ding the . who were alread! in c&stod!).
H21I
$ishra was granted
anticiator! bail b! the Bihar state High 6o&rt.
H2-I
5aloo?s anticiator! bail etition# however# was re1ected b! the
sa"e co&rt# and he aealed to the S&re"e 6o&rt# which res&lted in a %inal denial o% bail on ,&l! 29.
H2.I
=n the
sa"e da!# Bihar state olice were ordered to arrest hi".
H2*I
9he next da!# he was 1ailed.
H2)I
5ater# the
Bihar 2irector 3eneral o% /olice# S4 Saxena# 1&sti%ied the one'dela! dela! in arresting 5aloo b! stating in co&rt
that Pan! reciitate action wo&ld have led to olice %iring and killing o% a large n&"ber o% eole.P
H2GI
&nd of (aloo)s chief ministership
:s it beca"e evident that 5aloo wo&ld be eng&l%ed in the scandal and its rosec&tion# de"ands %or hi" to be
re"oved %ro" the chie% "inistershi had gained "o"ent&" both %ro" other arties#
H29IH>+I
as well as within
5aloo?s own art!# the ,anata 2al.
H>1I
=n ,&l! -# 5aloo %or"all! arted wa!s with the ,anata 2al and %or"ed his
own art!# the 0ashtri!a ,anata 2al (or 0,2)# taking with hi" virt&all! all the ,anata 2al legislators in the Bihar
state asse"bl!#
H>2I
and winning a vote o% con%idence in the state asse"bl! a %ew da!s later.
H>>I
9he 0,2
contin&ed to s&ort the coalition %ederal govern"ent# however.
H>2I
(ith de"ands %or his resignation contin&ing
to "o&nt# on ,&l! 2-# 5aloo resigned %ro" his osition# b&t was able to install his wi%e# 0abri 2evi as the new
chie% "inister on the sa"e da!. =n ,&l! 2G# 0abri?s new govern"ent s&ccess%&ll! won another tr&st vote in the
Bihar legislat&re b! a 19.'11+ vote# thanks to the 6ongress and ,harkhand $&kti $orcha arties voting in
align"ent with the 0,2.
H>.I
5aloo clai"ed he had been instr&"ental in heling H2 2eve 3owda beco"e the ri"e "inister.
H>-I
However#
there was ress sec&lation that 3owda held a gr&dge against 5aloo %or insisting that 3owda ste down when
3owda?s %ledgling govern"ent ran into internal coalition s8&abbles# and this "otivated hi" to &sh 6BI
2irector ,oginder Singh %or 5aloo?s rosec&tion.
H2+IH>*I
$&ch later# in 2++G# 5aloo also clai"ed that 2eve 3owda
con%essed# and Pwet and %ainted#P when 5aloo con%ronted hi" on inciting the 6BI to &rs&e the rosec&tion.
H>-I
5ooking retrosectivel!# 5aloo has said that the sca" had a lasting negative i"act on his olitical career#
and "a! have ended his rosects to one da! be ri"e "inister o% India.
H>)I
9here were reorts that ,oginder Singh had violated nor"s in keeing the new ri"e "inister# I4 3&1ral# in the
dark as he &rs&ed the rosec&tion.
H>*I
3&1ral?s own new govern"ent also deended on 5aloo %or s&ort in
arlia"ent#
H>GI
and ,oginder Singh later alleged that 3&1ral had atte"ted to block the sca" investigation %ro"
roceeding.
H>9IH.+I
=n ,&ne >+# the %ederal govern"ent iss&ed orders to trans%er Singh o&t o% the 6BI and into the
Ho"e $inistr! as a Secial Secretar!#
H>GI
which was technicall! a ro"otion b&t also had the e%%ect o% re"oving
hi" %ro" the investigation.
H.1I
9here was also an alleged %ollow'on "ove to trans%er DE Biswas# the regional
6BI director# which led to the High 6o&rt warning that it wo&ld act to disallow an! s&ch trans%er.
H.2I
rosecution
:s the 6BI discovered %&rther evidence over the %ollowing !ears# it %iled additional cases related to %ra&d and
cri"inal consirac! based on seci%ic cri"inal acts o% illegal withdrawals %ro" the Bihar treas&r!. $ost new
cases %iled a%ter the division o% Bihar state (into the new Bihar and ,harkhand states) in Eove"ber 2+++ were
%iled in the new ,harkhand High 6o&rt located in 0anchi# and several cases revio&sl! %iled in the Bihar High
6o&rt in /atna were also trans%erred to 0anchi. =% the *> cases that the agenc! had %iled b! $a! 2++)# the
"a1orit! were being litigated in the 0anchi High 6o&rt.
H.>IH2I
5aloo?s initial chargesheet# %iled b! the 6BI on 2) :ril 199*# was against case 06 2+':R9*# relating to
%ra&d&lent withdrawals o% >) crore (DSMG.1. "illion) %ro" the 6haibasa treas&r! o% the (then) Bihar
govern"ent#
H21I
and was based on stat&tes incl&ding Indian /enal 6ode sections .2+ (cheating) and 12+(B)
(cri"inal consirac!)# as well as section 1>(2) o% the /revention o% 6orr&tion :ct# 19GG.
H..I
Even tho&gh he had
been 1ailed# he was ket in relative co"%ort at the Bihar $ilitar! /olice g&est ho&se.
H.-I
:%ter 1>- da!s in 1&dicial
c&stod!# 5aloo was released on bail on 2ece"ber 12# 199).
H.*I
9he next !ear# on 2G =ctober 199G# he was
rearrested on a di%%erent consirac! case relating to the %odder sca"# at %irst being ket in the sa"e g&est
ho&se# b&t then being "oved to /atna?s Be&r 1ail when the S&re"e 6o&rt ob1ected.
H.-IH.)I
:%ter being granted
bail# he was rearrested !et again in a disroortionate assets case on - :ril 2+++. His wi%e and then 6hie%
$inister 0abri 2evi was also asked to s&rrender on that date# b&t then i""ediatel! granted bail.
H.-I
9his stint in
rison lasted 11 da!s %or 5aloo# %ollowed b! a one'da! i"rison"ent in another %odder sca" case on 2G
Eove"ber 2+++.
H.-I
,agannath $ishra had been er"itted bail in ,&ne 199)# and avoided 1&dicial re"and when 5aloo was %irst
detained in ,&l! 199). However# he was taken into c&stod! on 1* Sete"ber o% the sa"e !ear. He was %reed
on bail on 1> =ctober b&t then re"anded again# at the sa"e ti"e as 5aloo# on =ctober 2G# 199G# when he was
ket at the sa"e g&est ho&se as 5aloo# and later shi%ted to Be&r 1ail along with hi".
H.)IH.GI
$ishra was %reed on
bail on 2ece"ber 1G#
H.)I
b&t then rearrested in a di%%erent %odder sca" case on ) ,&ne 2+++.
H>I
2&e to the "&ltilicit! o% cases# 5aloo Sadav# ,agannath $ishra# and the other acc&sed have been re"anded
several ti"es in the !ears since 2+++. In 2++)# -G %or"er o%%icials and s&liers were convicted# and given
ter"s o% - to * !ears each.
H.)I
:s o% $a! 2++)# abo&t 2++ eole had been &nished with 1ail ter"s o% between
2 and ) !ears.
H.>I
: 2++- litigation o% one o% the cases (06 *G':R9*) in the 0anchi High 6o&rt involved over 2+
tr&ckloads o% doc&"ents.
H.9I
*mpact
Since it broke into &blic light# the %odder sca" has beco"e s!"bolic o% b&rea&cratic corr&tion and the
cri"inali7ation o% olitics in India generall!# and in Bihar in artic&lar. It has been called a s!"to" o% the Pdee
and chronic "alad! a%%licting the Bihar govern"ent and 8&ite a %ew other state govern"ents as well.P
H-+I
In
the Indian arlia"ent# it was cited as an i"ortant indicator o% the dee inroads "ade b! "a%ia ra1in the olitics
and econo"ics o% the co&ntr!.
H-1I
0e%erence has also been "ade to the anarchic nat&re o% governance (the
Pwithering awa! o% the stateP) that occ&rs when a "a%ia develos in a state'controlled sector o% the econo"!.
H-2I
5aloo /rasad Sadav is the onl! erson on who" the 5ok Sabha debated %or a co"lete session as the o%%icial
agenda.
------------------ ********** --------------
I5. scam
)he Indian 5remier .eague 8often abbreviated as I5.9 is a !rofessional league for )#enty:&
cric"et com!etition in India$ It #as initiated by the Board of Control for Cric"et in India 8BCCI9$
)he scam is com!licated to an e'tent that ma"es us doubt if I5. itself #as created for money
laundering$
BCCI officials involved
.alit 3odi, I5. Commissioner
Politicians involved
Sharad Pawar family
7harad 5a#ar and his immediate family held over 16; e(uity in one of the bidders for an I5.
cric"et team$ )he 5a#ars o#n <<$6 la"h shares 8out of :$&= crore shares9 in City Cor!oration, a
5une6based construction com!any #hich bid %s 1,1=6 crore for a franchise in 3arch$ )he 5a#ar
family>s shares are held through t#o com!anies, .a! -inance and Consultancy 5vt .td and
?amratta -ilm @nter!rises 5vt .td, #hich are 1&&; o#ned by the ?C5 su!remo and Anion
agriculture minister, his #ife 5ratibha and daughter 7u!riya 7ule$
Interestingly before the details emerged, 5a#ars claimed as miles a#ay from I5. and bidding$
Shashi Tharoor
I5. Commissioner .alit 3odi revealed that )haroor>s friend 8later his #ife9 7unanda 5ush"ar had
e(uity sta"es in %endezvous 7!orts 4orld 8%749, heading the consortium that o#ns the /ochi
team$ It #as later disclosed that 5ush"ar got s#eat e(uity of the value of %s =& crore$ 7hashi
)haroor maintained that the amount had nothing to do #ith his active cam!aigning and
mentoring for the /ochi team$ )his #as less convincing as he had s!ecifically mentioned that he
had no s!ecific gains from %74 #inning /ochi -ranchisee$
)he 5rime minister 3anmohan 7ingh later demanded his resignation$
Praful Patel
5raful 5atel #as accused of meddling in the auctioning of the franchisees$
Corporates and celebrities involved
3ulti 7creen 3edia or 7ony @ntertainment )elevision
4orld 7!orts Grou!
International 3anagement Grou!
%a2 /undra
7hahru"h /han
5reity Binta
Broadcast deal
In :&&,, 47G bagged I5. television rights for 1& years #ith a A7C 91, million bid and a !romise
to s!end A7C 1&, million on the event$ It also signed a deal #ith 373 ma"ing 7ony the official
broadcaster$ *o#ever, t#o months before I5.6:, the deal #as scra!!ed$ It #as recast #ith 373
agreeing to !ay A7C 1$6< billion for nine years$
0ccording to I6) sources, 373 agreed to !ay 47G>s offshore com!any in 3auritius a Dfacilitation
feeD of =$E !er cent of the I5. contract, #hich is around A7C ,& million$ 1n 0!ril 1F, :&&9, 373
remitted, from the Cevelo!ment Ban" of 7inga!ore to 47G A7C 1E$< million and on Gune :6,
:&&9, A7C 1&$:=6 million in t#o se!arate installments$
Match fixing
Income )a' investigation re!ort into match6fi'ing angle in the I5. revealed .alit 3odi has
interests in three teams$ )he re!ort goes on to name 7amir )ha"ral as front for .alit 3odi #hose
!hone records sho# conversations #ith boo"ies$ 7erious investigations #ere on into !ossible
match6fi'ing and betting in I5. 7eason : #hich too" !lace in 7outh 0frica$ )he entire
investigation no# seems to be honing in on I5. :$ Income )a' investigation #ing has filed a
confidential re!ort to the finance ministry$
7everal I5. !layers could have been involved$ )here #ere indications that !hone conversations
have also been recorded and that !ossible (uestioning of I5. !layers could ha!!en in this regard$
Money laundering
I5. is a ma2or source for some individuals or !arties to bring that money from 7#iss ban"s to
India for utilize it in investing in various business firms$ ?%I, ?on resident Indian !lay an
im!ortant role in this conversion$ If #e analyze the o#ners of I5. teams , then #e can see huge
?%I !resence in shareholders$ 0s !er la#s in India, an ?%I can bring tons of money through his
account to invest in India #ithout any barrier or using some sim!le formalities$ 3auritius is to!
among these because an investing ?%I in 3auritius can bring huge amount of money from any
7#iss Ban" account to their o!erating account in 3auritius$ )hen the ?%I transfer the money to
India through hisHher ?%I ban" account in India and invest in Indian business firms$ Cue to this
I5. became an easy #ay to turn B.0C/ 31?@I to 4*I)@$
)he Income )a' de!artment had received financial details of more than %s 1E& crore in overseas
accounts from some ta' haven countries of Dnon6 residentsD #ho invested in the I5.$ )he
information regarding investments and remittances to the tune of about %s 1E& crore in I5.
media rights has been received from British Jirgin Islands and 3auritius$
Raasthan Royals
.alit 3odi #as accussed as having silent sta"e in %a2asthan %oyals$
)he @nforcement Cirectorate had started en(uiry about the -@30 violations$ 7uresh Chellaram
from ?igeria, mentioned as Dco6brother6in6la# of .alit 3odiD #ho controls :E !er cent of the
team, allegedly fronting for 3odi$ Chellaram is said to o#n FF$1E; sta"e in @3 7!orting *olding,
3auritius, through )resco Internatonal .td based in British Jirgin Islands$ A/6based 3ano2 Badale
#ho is alleged to be a 3odi6aide, o#ns <:$F; through @merging 3edia$
.achlan 3urdoch, son of media baron %u!ert 3urdoch, o#ned *ong6/ong based Blue 4ater
@state, holds 11$=;$ Bahamas6based /u"i Investments #hich is o#ned by /undra family 87hil!a
7hetty>s in la#s9 holds another 11$=; sta"e in @3 7!orting *olding, 3auritius$ %a2asthan %oyals
is o#ned by Gai!ur I5. 5vt .td, #hich is a #holly o#ned by @3 7!orting *olding, 3auritius$
%a2asthan %oyals is a!!arently o#ned by @merging 3edia 5vt .td, !artly controlled by one
Cayman Island Com!any and controlled by three different grou!s$3ano2 Bedale, #ho has a A/
entity called 0gylsis, 3umbai @ducation )rust in 3umbai and %an2it )ha"re e'6I)C em!loyee$
%a2asthan %oyals #ere terminated by BCCI for alleged mal!ractices and o#nershi! issues, but
they could get a stay on the termination$
!ol"ata !night Riders
7hahru"h /han #as (uestioned by @nforcement Cirectorate for his involvement in money
laundering and blac" money deals in his franchisee$ It has turned out that there are many !ro'y
o#ners to his franchisees, and lin"s to 3uaritius based com!anies have also came to light$ )he
share transactions by 7hahru"h allegedly #as done flouting 7@BI guidelines and -oreign
@'change %egulations 0ct$
0t the time of incor!oration in -ebruary :&&,, %ed Chillies @ntertainment 5vt .td K the
entertainment com!any run by /han K held 9,9&& shares of /%75. and his #ife 8the nominee of
%ed Chillies @ntertainment9 held 1&& shares, during the financial year :&&,6&9, the shareholding
in the franchise changed$ 1n 3arch <1, :&&9, a 3auritius6based com!any, )he 7ea Island
Investment .td, #as listed as having E& la"h shares and film star Guhi Cha#la 3ehta as getting
F& la"h shares of the total : crore shares$ )he remaining 1$1 crore shares remained #ith %ed
Chillies @ntertainment$
-inancial transactions details gathered by the @C K6 #hich is robing several other I5. teams as
#ell K6 sho# that /%75. received an amount of +1<$1, la"h 8%s 6$&6 crore9 from 7ea Island
Investments, #hich is o#ned by Guhis husband, Gay 3ehta, in its Citiban" 3umbai account$ 1f
this, %s 1$&6 crore #as remitted bac" to the com!any on 3arch 1F, :&&9$ )he allotment of
shares to 7ea Island Investments #as made on 3arch =, :&&9 at the rate of %s 1& !er share$
)he @C has evidence to sho# that the shareholding of the franchise changed yet again on 3arch
1&, :&1&, as Guhi Cha#la 3ehta sold her entire sta"e of F& la"h shares to 7ea Island
Investments thus s!litting the o#nershi! of /%75. bet#een the 3auritius com!any and /han
along #ith his #ife, Gauri /han$
Cheergirls
0ccording to a highly confidential income ta' source, several high6class "no#n 8#ithin Bolly#ood
circles9 call girls #ho call themselves actresses or models and C6grade actresses and models
#ere allegedly hired or enlisted by a certain !ersonality and his cronies L no# under
investigation by a myriad of agencies L #ithin the I5. to !rovide se'ual gratification to clients,
s!onsors, benefactors and !atrons$
C?? IB?, *eadlines )oday and )imes ?o# re!orted that the I) de!artment is investigating and
loo"ing into the monies !aid to cheer leaders and others #ho added the glam com!onent$ )he I)
sleuths #ant to "no# #ho hired them, #ho !aid them and ho# much #as !aid to them and for
#hat "ind of services$ It has also come out that many of them #ere !aid huge amounts in cash L
something that a body li"e the I5. should have never done$
0ccording to -lynn %emedios, author of the yet6to6be !ublished I5.gate L the mother of all
Indian cric"et scams, 0!!arently, it trans!ires that certain cheer leaders and glam dolls or se'
dolls #ere !aid far more than #hat any one #ould have !aid a cheer leader$
Investigation
0 multitude of agencies started investigation at the start of the scam$ ?othing more to be heard$
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,ee scandal case
Aro" (ikiedia# the %ree enc!cloedia
9he $eep scandal in 19.G was %irst "a1or corr&tion case in indeendent India.
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C.4. 4rishna $enon# the then
Indian high co""issioner toBritain# ignored rotocols and signed a 0s G+ lakh contract %or the &rchase o%
ar"! 1ees with a %oreign %ir".
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Corruption allegations
C. 4. 4rishna $enon# then the Indian high co""issioner to Britain# b!assed rotocol to sign a deal worth 0s
G+ lakh with a %oreign %ir" %or the &rchase o% ar"! 1ees.
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Even then the 1ees were &n&sable# b&t Eehr&
%orced the govern"ent to accet the".
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3ovind Ballabh /antthe then Ho"e $inister and the then 3overn"ent
o% Indian Eational 6ongress anno&nced on Sete"ber >+# 19-- that the ,ee scandal case was closed %or
1&dicial in8&ir! ignoring s&ggestion b! the In8&ir! 6o""ittee led b! :nanthsa!ana" :!!angar.
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He declared
that Pas %ar as 3overn"ent was concerned it has "ade & its "ind to close the "atter. I% the oosition was
not satis%ied the! can "ake it an election iss&eP. Soon a%ter on Aebr&ar! >#19-* 4rishna $enon was ind&cted
into the Eehr& cabinet as "inister witho&t ort%olio.
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9a1 corridor case
9he Ta$ Heritage Corridor case is an alleged sca" wherein 2++2Q2++># the then 6hie% $inister o% Dttar
/radesh $a!awati and a "inister in her govern"ent# Easi"&ddin Siddi8&i# were charged with corr&tion. 9he
9a1 6orridor ro1ect was intended to &grade to&rist %acilities near the 9a1 $ahal and was to be i"le"ented
d&ring her ten&re as 6hie% $inister. 9he then B,/ govern"ent at the 6entre gave the Environ"ental 6learance
re8&ired %or the ro1ect near 9a1 $ahal. However# later on the B,/ backed o&t and then started sa!ing that the
ro1ect was not cleared b! the Environ"ent $inistr! and bla"ed $a!awati %or starting constr&ction work near
the 9a1 $ahal.
Hcitation neededI
Cost and funding
9he total esti"ated cost o% the ro1ect was 0s. 1)- crore (DSM .. "illion).
olitical support
9he ro1ect was started with the s&ort o% the B,/ and interr&ted when $a!awati Bah&1an Sa"a1
/art! disaligned itsel% with that art! on 2- :&g&st 2++>. 6o""entators said that this change in align"ent was
d&e to $a!awati?s 8&ickl!'changing te"era"ent and beca&se o% the B,/?s hostilit! toward the 9a1 Heritage
6orridor ro1ect.
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: olitical co""entator said that the s&ort %or the 6orridor ro1ect ca"e when $a!awati
rotected B,/ leaders 5.4. :dvani# $&rli $anohar ,oshi and D"a Bharti %ro" rosec&tion in the case o%
the de"olition o% the Babri $as1id b! "oving the trial o% all charges excet the consirac! charge to a co&rt
in 0ae Bareill!.
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*nvestigation of scam
It has been alleged that $a!awati e"be77led the "one! dedicated %or this ro1ect. 9he case is c&rrentl! &nder
investigation b! the 6entral B&rea& o% Investigation. Initiall!# the case saw so"e raid rogress# when 6BI
cond&cted extensive searches on her vario&s addresses# and clai"ed that tho&gh she had clai"ed inco"e o%
onl! 0s. 1.1 crores d&ring her ten&re as 6$# her bank balance in a single bank went & to 2.- crore and total
assets held b! her were esti"ated at 0s.1- crore. :t one oint a warrant was exected %or her arrest# b&t she
was granted a sta!.
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In Sete"ber 2++> :1a! :grawal# the %or"er govern"ent co&nsel in the ro1ect# began acc&sing $a!awati o%
enriching hersel% %ro" the 6orridor ro1ect and also stated that $a!awati had recentl! ac8&ired roert! both in
her na"e and in the care o% her relatives.
However# since late 2++># investigations aear to have slowed downJ there are sec&lations in the "edia
abo&t olitical inter%erence# and theS&re"e 6o&rt o% India has several ti"es &lled & the 6BI %or its tard!
rogress in the case. $edia so&rces reorted that vario&s o%%icials who had been investigating the case were
trans%erred to other d&ties.
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ro$ect status
9he ro1ect is now de%&nct# and lans are being "ade to re"ove the artial constr&ction near the 9a1 $ahal site
and relace it with a low tech %orested greenbelt. 9he High 6o&rt o% :llahabad has r&led in %avor o% a .-Q-+
crore ro1ect b&t exactl! who will %oot the :SI bill re"ains to be clear.
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S&kh 0a"
Aro" (ikiedia# the %ree enc!cloedia
Su!h #am is a %or"er &nion co""&nications "inister in Indian Eational 6ongress 3overn"ent. He was a
"e"ber o% 5ok Sabha %ro" $andiconstit&enc! o% Hi"achal /radesh. He won the Cidhan Sabha election %ive
ti"es and the 5ok sabha election three ti"es.
Controversies
9he 6entral B&rea& o% Investigation in 199* sei7ed 0s. >.* crores
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in cash concealed in bags and s&itcases
%ro" his o%%icial residence. 9he cash was allegedl! collected b! hi" co""itting irreg&larities in awarding a
teleco" contract. He was convicted and sentenced to three !ears< rigoro&s i"rison"ent b! a 2elhi co&rt in
2++2.
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=n 1G Eove"ber 2+11 he was %o&nd g&ilt! in a 199* 9eleco" Sca"
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and was sentenced to %ive !ears in 1ail
b! a 2elhi co&rt. He was teleco" "inister in / C Earasi"ha 0ao?s cabinet.
S&kh 0a"?s conviction and his -'!ear rigoro&s i"rison"ent sentence# rono&nced on 19 Eove"ber 2+11#
ca"e at a ti"e when the co&ntr! had witnessed co&ntr!'wide agitations and inde%inite %ast b! the anti'
corr&tion cr&sader :nna Ha7are. S&kh 0a" escaed a %ailed atte"t to assa&lt hi" b! a >-'!ear old !o&ng
"an who clai"ed to have been insired b! the ideals o% Bhagat Singh and :nna Ha7are.
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:s a coincidence# S&kh 0a"# the %or"er &nion "inister o% teleco""&nications# will be lodged in the 9ihar
/risons ,ail Eo. 1# the sa"e as the one in which another %or"er "inister o% teleco""&nications# :. 0a1a# is
being lodged as an &ndertrial in what is widel! knwon as the "&lti'core r&ees 23 Sectr&" sca".
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9he
Eove"ber 2+11 sentencing o% S&kh 0a" is not related to 23 Sectr&" 6ase b&t is related to the %ra&d&lent
roced&res %ollowed in the &rchase o% ol!thene'ins&lated 1ell!'%illed cables
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%or the deart"ent o%
teleco""&nication o% which he was "inister. S&kh 0a" has earlier been sentenced %or a"assing assets
disroortionate to his known so&rces o% inco"e.
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:ltho&gh convicted and sentenced b! di%%erent co&rts in three di%%erent b&t related cases# S&kh 0a" has
avowed to %ight his case in higher co&rts.
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4argil co%%in sca"
Aro" (ikiedia# the %ree enc!cloedia
:%ter the ar"ed con%lict that too lace in 1999 between India and /akistan in the 4argil sector o% India# a "a1or
sca" had occ&rred in the &rchase o% co%%ins b! the then led 3overn"ent =% India. 9he govern"ent had
inc&rred a heav! loss o% 1#G)#+++ dollars in the entire transaction. 6o"troller and :&ditor 3eneral o% India?s
reort had %o&nd several %ra&d in the transaction o% co%%ins. 9he caskets were &rchased %ro" B&itron and
Bai7a# a co"an! based in Dnited States =% :"erica rendering %&neral services. 9he then r&ling
govern"entEational 2e"ocratic :lliance had &rchased -++ caskets worth 2-++ dollars each
H1IH2I
which was
res&"ed to be thirteen ti"es the original a"o&nt. However the a"bassador %ro" both the
co&ntries India and Dnited States =% :"erica had declared in writing that those caskets had a cost worth 2#)*G
dollars each.
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Contents
[hide]
1 CAG
Report
2 CBI
Investigation
3 See also
4 Referene
s
[edit]CA+ #eport
2&e to the dist&rbance in the national sec&rit! o% the co&ntr!#Eational 2e"ocratic :lliance had "ade an
e"ergenc! transaction as "ore than -++ ar"!'"en had died in the battle. 9he reort b! the 6o"troller and
:&ditor 3eneral o% India had ortra!ed that so"e "iddle"en in the transaction had "ade l&" s&" ro%its.
9he reort showed that the %ra&d co&ldn?t have taken lace witho&t the resence o% willing insiders who co&ld
have even been bribed to co""it it.
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[edit]CB* *nvestigation
9he investigation was %&rther been carried %orward to 6entral B&rea& o% Investigation who %illed a charge sheet
in 2++2.
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9he three "a1or Indian :r"! "en who were listed &nder the charge sheet were $a1or 3eneral :r&n
0o!e# 6olonel S4 $alik and 6olonel A B Singh.
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A&rther Cictor Bai7a# a DS Eational who s&lied the
al&"ini&" casket and bod! bags to the Indian :r"! was also &nder the charge sheet.
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However# the then
de%ense "inister 3eorge Arenandis was not incl&ded in the reort and was later given a clean chit %ro" the
sca". 9he6entral B&rea& o% Investigation o%%icials had later declared that de%ense "inistr! had i"orted in%erior
caskets and bod! bags at a heav! rice o% 0s 12-#+++ er casket and 0s .#2-+ er bod! bag d&e to which the
Indian 3overn"ent had a reven&e loss o% 0s G9.)* lakh. A&rther in ,&ne 2++* 6entral B&rea& o%
Investigation registered a case &nder sections .2+(signi%ies cheating)#12+ B(cri"inal consirac!) and the
/revention o% 6orr&tion :ct.
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