An unusual raid

Implications for both media and private banks

Indira Gandhi was a relative greenhorn in the matter of how to control the media. She used blunt instruments like limiting access to newsprint and regulating what price newspapers could charge — earning the disapproval of the Supreme Court. Later, in her dictatorial phase, she resorted to plain censorship. Subsequent rulers have realised that it is easier to control those who own the media than those who work in them. When a newspaper owned by a Mumbai businessman, Vijaypat Singhania, was proving to be a nuisance, one of Rajiv Gandhi’s flunkeys called him to Delhi and treated him to what amounted to mental third degree treatment; the newspaper was quickly sold and then shut down. Later, another Mumbai businessman who owned a news magazine was subjected to tax raids; the magazine’s editor had to intercede with the then prime minister, Atal Bihari Vajpayee. Sometimes the carrot has obviated the need for the stick; several newspaper owners (and editors too) have been happy to be nominated to the Rajya Sabha, the quid pro quo being obvious. The most recent trend has been for the media to toe the line unbid, as an outpouring of what is presented as nationalist conviction. As for what is called the “official” media, the days of holding up even a fig leaf called autonomy belong to the past. 

Against this backdrop, the raids by the Central Bureau of Investigation (CBI) on the homes and offices of the owners of NDTV, the news broadcaster, fit an established pattern. The CBI has defended the raids on the grounds that it is investigating a criminal conspiracy that involved a loss ofRs 48 crore to the country’s largest private bank, ICICI. It has underlined that no action has been taken against the broadcasting company itself; therefore, it has not attacked the freedom of the media. 

Fair enough, though we’ve heard that before; and all crimes should be investigated. But spare a thought for the bona fides of what has been called a “caged parrot”.

In a country where bad or dodgy loans (many of them involving fraud and collusion) involve trillions of rupees, owed mostly to government banks, the CBI’s priorities should raise eyebrows — as should some other aspects of the matter. It is unusual for the CBI to busy itself over the loss supposedly suffered by a private bank, just as it is unusual for the Bureau to act on a complaint by a third (private) party whose plaint in judicial forums had yielded no joy. It is even more unusual that the 

Bureau conduct raids on one party to an alleged conspiracy without any enquiries at all having been made with the other accused party, the bank in question — or rather, unnamed bankers, since the bank itself has made no complaint in the matter. For good measure, NDTV has pointed out that raids have been conducted without even a preliminary enquiry having been made.

While the media in general will take note of this episode, and stiffen their vertebrae or make them more flexible, there are implications for the banking community which has to take judgement calls on much larger loans that have to be settled on terms that must of necessity involve compromises on the original claims. Public sector bankers have already been arrested in recent months; if a private bank’s executives are now arraigned because of the manner in which the NDTV loan was settled as many as eight years ago, the government should expect the resolution of what has come to be known as the “twin-balance sheet problem” to become even more problematic.