Generally speaking, when a poor person steals or is corrupt it is understandable (not justified) but what happens when rich people game the system?
Here, I am reminded of what a former chairman of Air India told me during one of our regular informal chats. He said, generally we assume that people who are poor or are not doing well, will swindle or cheat or take speed money. But, you will be surprised that some of the rich-and-famous will beat these poor people hollow. During my stint at Air India, a minister pressed a couple of Air India flights for personal use — to carry guests for his family’s marriage function. And he also liberally used Air India’s flight kitchen service.
Now, who will question the minister? A bureaucrat? He or she will be shunted or some cases of corruption slapped against him/her. Media, yes they can help here. And to a large extent they can create an impact. This minister in question escaped but there are others who got caught in various scams – Bofors, 2G, Coal, Commonwealth Games, Delhi liquor to name a few.
Do professionals too game the system?
When ICICI Bank’s MD & CEO, Chanda Kochhar, her husband Deepak and Videocon Group’s promoter, Venugopal Dhoot landed in jail for a Rs 3,250-crore loan fraud it shocked and surprised CXOs of the ICICI Group.
One board member from the ICICI Group told me that at none of the board meetings or special meetings (which he was part of for years) did Chanda openly make any recommendations. This is why I am stunned, he confided. But, the CBI’s 11,000-page charge-sheet said that she misused her position and “misappropriated” bank’s funds for her own use and got Rs 64 crore as “illegal gratification”.
Interestingly, when you compare the salary of Chanda Kochhar those days with her public sector counterpart Arundhati Bhattacharya, chairman of the State Bank of India in 2017, it leaves you flustered. The balance sheet size of State Bank, headed by Bhattacharya, was much bigger than ICICI Bank. Yet, Bhattacharya drew a salary of Rs 28.96 lakh compared to Kochhar’s basic salary of Rs 2.66 crore, plus Rs 2.2 crore as performance bonus and Rs 2.43 crore in allowances & perquisites. All these added up to Rs 6.09 crore in FY17 excluding ESOPs.
Take the case of Dilip Pendse, who was MD of Tata Finance. He was considered to be the blue-eyed boy of Ratan Tata. But, he fell from grace when a Rs 500-crore fraud came to light during his tenure. Unable to bear the court cases and investigations, he committed suicide.
One can understand Abdul Karim Telgi’s compulsion, the brain behind the Rs 30,000-crore stamp paper scam. He was literally a rag-to-riches story. So too was the Big Bull Harshad Mehta, a middle-class Gujarati stockbroker who manipulated the stock market with illegal banker’s receipts. Incidentally, both Telgi and Mehta died in jail.
But I am wonderstruck why some ultra HNIs or HNIs who have had all the trappings of life – tony addresses, farm houses, houses in London/California/Dubai, latest cars, choppers, and private jets game the system.
Look at the names of some of the businessmen who have been jailed in the last 10 years. They are: the late Subrata Roy, Naresh Goyal, Ramalinga Raju, Rana Kapoor, Venugopal Dhoot, Sanjay Chandra, Malvinder-Shivinder brothers, Jignesh Shah, Peter Kerkar, Shahid Balwa, Wadhawan brothers, Avinash Bhosale. It is a long list. Their meteoric rise saw them being featured on the covers of business and news magazines. But, if you notice, they were already wealthy though not in the same league as Bill Gates, Warren Buffett, Mukesh Ambani or Gautam Adani. Yet they bucked the system.
Some like Lalit Modi, Vijay Mallya, Nirav Modi and Mehul Choksi fled the country though attempts are being made to get them back.
There is a herd mentality even in gaming the system. This happens in the stock market. When the market is in a bullish phase you will suddenly see a whole lot of promoters (fly-by-night operators) tapping the market to raise money. Currently, the flavor of the season is fintech, retail and FMCG companies. Earlier it was pharma, IT, mini-cement, steel, IT, textiles, granites and plantation companies. And if you revisit the companies that have raised money via IPO you will notice 90 per cent of them have vanished.
Those days when development financial institutions (DFI) like IDBI and ICICI existed before they became private sector banks, the joke was that businessmen would go to DFIs in a Maruti 800 to raise money for his projects. And a few years later would drive in a Merc or BMW to plead with the DFIs for a write-off or take a hair-cut.
So what is the compulsion of the rich and famous to game the system? Is it greed? Is it a disease? Or poor deterrence thanks to business-political nexus. Or they felt they were too big to be jailed.
Ironically, the billions of rupees at their disposal could not keep them out of jail. Many continue to languish.
Here, I am reminded of Leo Tolstoy’s famous quote, “How much land does a man need?”