PANIC IN THE BOARDROOM
FEAR STALKS CORPORATE INDIA AS LEADING INDUSTRIALISTS COME UNDER CBI FIRE
In Charles Dickens’ A Tale of Two Cities, the bloodthirsty Madame Defarge sits in the corner of a wine shop, secretly knitting the names of her rivals to be sent to the guillotine. A Delhi- based corporate executive, still reeling from the shock of CBI’s actions against some of India’s biggest business houses, says that India’s premier investigating agency is behaving like the character from the pages of the Victorian novelist, much to the horror of Corporate India. “The fear is so intense that no one wants to start any new projects, lest their children face repercussions in future,” he says.
His nervousness is not misplaced. On October 17, a Supreme Court ( SC) bench comprising Justices G. S. Singhvi and V. Gopala Gowda ordered to investigate eight conversations of the 17 flagged by an sc- appointed cbi team, that corporate lobbyist Niira Radia had with Government officials and private executives. These conversations, according to the bench, suggest “deep- rooted malice and corrupt means being adopted by private parties to extract gains”. Recorded by the Income Tax Department in 2008- 09, the conversations were part of the 5,851 recordings of exchanges Radia had with influential people, about 5 per cent of which were leaked to the media in 2010. The SC order came two days after CBI named Kumar Mangalam Birla, 45, chairman of the $ 40- billion Aditya Birla Group, in its 14th FIR in the coal allocation scam, along with former coal secretary P. C. Parakh, alleging Birla- owned Hindalco got the Talabira- II coal block in Odisha as part of a criminal conspiracy. The group owns a minority stake in the company that publishes this magazine. Was it a case of making it difficult for honest business houses? The PMO, already scalded by Coalgate, was rendered speechless by the targeted Parakh. The former coal secretary said in the wake of CBI’s FIR: “I am not sure why the CBI thought that this was a conspiracy,” adding that if the CBI believed that Birla and “myself are conspirators, then why did they not think of the Prime Minister as a co- conspirator, then everyone is part of the conspiracy”.
CBI A shaken India Inc saw it as an attack on itself. In the last three years, several industrial houses, their combined worth almost $ 300 billion, 16 per cent of India’s GDP, have been put on trial by CBI. This comes at a time when the economy is in shambles. A recent CII survey said GDP growth will not exceed 5 per cent in 2013- 14. In the past 18 months, India has lost at least Rs 1 lakh crore in potential investment, including two steel projects from ArcelorMittal and Posco, scrapped due to a multitude of issues. FDI inflows into the country fell 38 per cent to $ 22.42 billion in 2012- 13 compared to $ 35.12 billion in 2011- 12.
As it is, points out Adi Godrej, chairman of the Godrej Group, doing business in India was never easy. Now, he says, “an FIR without a particular reason against a respected businessman will invariably create a very difficult environment for business”. Naina Lal Kidwai, President of FICCI, says, “Highly regarded business leaders cannot be made scapegoats.” Minister for Corporate Affairs Sachin Pilot told INDIA TODAY that industry associations have met him with their concerns. “The country can grow only when both Government and the private sector work as partners,” he says. But the latest edition of the Business Today- C fore Business Confidence Survey for the July- September quarter, 2013, found that sentiment among corporate leaders is