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| A K Bhattacharya: The other Satyam question | | The company was sold in 100 days - will Ramalinga Raju be brought to justice as quickly? |
| A K Bhattacharya / New Delhi Apr 14, 2009, 00:50 IST |
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The company was sold in 100 days - will Ramalinga Raju be brought to justice as quickly?
Harshad Mehta was the man behind the biggest stock-market swindle in India. He manipulated stock prices by exploiting loopholes in the banking system. Mehta and his associates used funds available from inter-bank transactions to buy shares at a premium that contributed to a sharp rise in the Sensex, the Bombay Stock Exchange’s benchmark index.
That was in 1992. Once his style of operation came to light, banks began demanding back the money they gave to him. That led to Mehta’s collapse and that of the stock market. Manmohan Singh was the finance minister at that time. A joint parliamentary committee (JPC) was set up to find out who all were guilty of not taking the necessary steps to prevent the scam.
Many financial sector players were indicted by the JPC report. Manmohan Singh narrowly escaped with a relatively mild comment on the quality of his vigil of the financial sector in his capacity as the finance minister. Accepting moral responsibility, Singh resigned. But his prime minister, PV Narasimha Rao, came to his defence and persuaded Singh to stay on in the Cabinet in the same job.
Harshad Mehta was charged with as many as 72 criminal offences. Over 600 civil action suits were filed against him. His assets were seized. But by 1996-97, Mehta came out of police custody and even began operating in the stock market through friends and other brokers. The legal process to declare him guilty of having committed the country’s biggest stock-market swindle was painfully slow.
Nobody seemed to be really bothered by this gross miscarriage of justice. Justice delayed, after all, is justice denied. In 2002, Harshad Mehta died with several legal cases pending against him in the courts.
What happened to CR Bhansali? He was the chairman of CRB Capital Markets Limited. In 1997, he was accused in the Rs 1,200-crore CRB scam. The CBI had registered a case against Bhansali, alleging that his company and some officials of the State Bank of India had cheated the bank of Rs 57 crore. His company was also alleged to have used SBI accounts to siphon off bank funds. Ordinary investors in Bhansali’s financial outfit also lost their deposits. But was he punished for his alleged misdeeds?
As the country celebrates the speedy conclusion of the process to hand over the reins of the scandal-hit Satyam Computer Services to Tech Mahindra, it is equally important to pause and wonder if similar speed and efficiency will mark the judicial process to decide what punishment should be meted out to Ramalinga Raju for having driven the country’s fourth-largest information technology company to this mess.
There is no doubt that the government acted swiftly in appointing a new board with a clear mandate to find a new buyer for the beleaguered company. It was also an indication of how the government’s outlook on such issues had changed for the better. Instead of opting for the easy path of nationalising the company, the Manmohan Singh government decided that the financial mess created by a private sector company should be cleaned up only by another private sector entity. The same market principles, which led to the rise of Satyam Computer, were used to determine its new buyer after it fell on bad days.
Can the judicial trial for Ramalinga Raju and his associates be also placed on the fast track? Going by the pace at which the trial is taking place, it appears that a final verdict on Raju’s misdeeds will take a long time. That is a pity. Economic offences of such magnitude certainly deserve the creation of a special court, which could expedite the trial process and deliver its judgement on Raju. If the government could complete the process of finding a buyer for Satyam in less than 100 days of Raju’s confession of having inflated his company’s profits, its next step should be to set up a special court with a mandate that the trial would be completed and a judgement delivered in another 100 days.
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