This article showcases a compilation of information on various scams and scandals in India pertaining to corruption. From the Jeep scandal to the Nagarwala scam these set of excerpts present the basic cases of the scams and the severity of corrupt practices in the country.

Corruption in India
India tops the list for black money in the entire world with almost US$1456 billion in Swiss banks (USD 1.4 trillion approximately) in the form of black money. According to the data provided by the Swiss Banking Association Report (2006), India has more black money than the rest of the world combined.Indian Swiss bank account assets are worth 13 times the country’s national debt. Indian black money is sometimes physically transferred abroad. The CEO of a Mumbai-based equity firm recently told journalists that the money is flown abroad in "special flights" out of Mumbai and Delhi airports to Zurich. Indeed Indians would be the largest depositors of illegal money in Swiss banks, according to sources in the banking industry. The estimated average amount stashed away annually from India during 2002-2006 is $27.3 billion US dollars.

Independent reports have recently calculated India’s traditionally ruling family’s (Gandhi’s)financial net worth to be anywhere between $9.41 billion (Rs 42,345 crore) to $18.66 billion (Rs 83,900 crore), most of it in the form of illegal monies.

Harvard scholar Yevgenia Albats cited KGB correspondence about payments to Rajiv Gandhi and his family, which had been arranged by Viktor Chebrikov, which shows that KGB chief Viktor Chebrikov sought in writing an "authorization to make payments in US dollars to the family members of Rajiv Gandhi, namely Sonia Gandhi, Rahul Gandhi and Paola Maino, mother of Sonia Gandhi" from the CPSU in December 1985.

According to the compilation, the total amount of money involved in various scams over the years since 1992, is estimated to be over Rs 80 lakh crore (Rs 80 trillion) or $1.80 trillion! While this figure is not claimed to be a definitive calculation, it has been arrived at on the basis of material published in newspapers over the years.
Corruption has been widely prevalent since the first government in independent India was formed though an impression is being created that it is a relatively new phenomena in Indian politics.

Jeep Scandal: The history of corruption in post-Independence India starts with the Jeep scandal in 1948, when a transaction concerning purchase of jeeps for the army needed for Kashmir operation was entered into by V.K.Krishna Menon, the then High Commissioner for India in London with a foreign firm without observing normal procedure. Contrary to the demand of the opposition for judicial inquiry as suggested by the Inquiry Committee led by Ananthsayanam Ayyangar, the then Government announced on September 30, 1955 that the Jeep scandal case was closed. Union Minister G.B.Pant declared "that as far as Government was concerned it has made up its mind to close the matter. If the opposition was not satisfied they can make it an election issue.” Soon after on February 3,1956 Krishna Menon was inducted into the Nehru cabinet as minister without portfolio.

The Mundhra Scandal: Less than a year after the government nationalised life insurance in 1956—on the grounds that it was not being managed well—the Life Insurance Corporation (LIC) produced independent India’s first scam. The Mundhra scandal involved then finance minister T T Krishnamachari, who pressured the government-owned Life Insurance Corporation of India into bailing out Haridas Mundhra, a Calcutta-based industrialist, by buying shares worth Rs 1.24 crore in six mainly dud companies owned by him. LIC did so dutifully, bypassing its own investment committee. Mundhra was swindling the companies and, simultaneously, rigging up their stock prices to camouflage his fraud. Feroze Gandhi, Prime Minister Jawaharlal Nehru’s son-in-law, dramatically disclosed the deal in 1958, leading to a nationwide furore, and an investigation. Mundhra was sentenced to 22 years in prison, and TTK lost his job.

Mudgal case: H.G. Mudgal, the CONGRESS MP who was forced to resign from the Provisional Parliament on September 24, 1951, for tabling questions for a remuneration obtained from an association of business persons. Mudgal was almost expelled from Parliament after he was found guilty by a Parliament Committee.

In 1950, A.D.Gorwala, an eminent civil servant was asked by Government of India to recommend improvements in the system of governance. In his report submitted in 1951 he made two observations: “One, quite a few of Nehru’s ministers were corrupt and this was common knowledge. Two, even a highly responsible civil servant in an official report as early as 1951 maintained that the Government went out of its way to shield its ministers” (Report on Public Administration, Planning Commission, Government of India 1951)

The Santhanam Committee, which was appointed by the Government in 1962 to examine the issue of corruption in its report submitted in 1964 observed: “There is widespread impression that failure of integrity is not uncommon among ministers and that some ministers, who have held office during the last sixteen years have enriched themselves illegitimately, obtained good jobs for their sons and relations through nepotism and have reaped other advantages inconsistent with any notion of purity in public life.”

Partap Singh Kairon– CONGRESS Chief Minister of Punjab from 1956 to 1964. While he is credited for much of the developments the state achieved, the controversy about his corrupt actions in promoting the economic interests of his sons, relatives and cohorts forced him to resign after being indicted by the S.R Das Commission.

Orissa CONGRESS Chief Minister Biju Patnaik [1965] was forced to resign after the charges of corruption against him were investigated by HR Khanna Commission. He was indicted for awarding government contract to his privately held companies Kalinga Tube.

Nagarwala scam
The case, straight out of a political thriller, captured public imagination and continues to raise unanswered questions. On May 24, 1971, former intelligence agent R.S. Nagarwala, posing as a "man from Bangladesh", withdrew Rs 60 lakh from the Parliament Street branch of New Delhi’s State Bank of India, following a purported call from then prime minister of India, Indira Gandhi, to the chief cashier. Nagarwala had apparently "mimicked" Indira Gandhi’s voice. In the course of the probe that followed, investigating officer D.K. Kashyap was killed in a mysterious car accident and Nagarwala died in prison. The Janata Party, alleging that the money belonged to Indira Gandhi, set up the Jaganmohan Reddy commission in 1977, but found insufficient evidence to indict her.

Maruti Scandal, 1974 : Well before the company was set up, former prime minister Indira Gandhi’s name came up in the first Maruti scandal, where her son Sanjay Gandhi was favoured with a licence to make passenger cars.

Kuo Oil deal scam, 1976 : The Indian Oil Corporation signed a Rs 2.2-crore oil contract with a non-existent firm in Hong Kong and a kickback was given. The petroleum and chemicals minister was directed to make the purchase.

In early 80s, Congress CM Maharashtra, A.R. Antulay, was collecting bribe for granting licensed cement and industrial alcohol. He resigned following adverse court verdict.. Antulay had garnered Rs 30 crore from businesses dependent on state resources like cement and kept the money in a private trust.

Westland helicopter scam, 1986: The Prime Minister Rajiv gandhi forced the public sector Pawan Hans Corporation to buy 21 helicopters from a British company that was shutting down. A series of technical faults and crashes followed. The helicopters were eventually discarded as junk and lined up at an unused airport in Mumbai.

HDW Submarine, 1987: The German submarine maker was blacklisted after allegations that commissions worth Rs 420 crore had been paid .

Bofors Scandal (1987): The Bofors Scandal was a major corruption scandal in India in the 1980s; the then Prime Minister Rajiv Gandhi and several others were accused of receiving kickbacks from Bofors AB for winning a bid to supply India’s 155 mm field howitzer. The scale of the corruption was far worse than any that India had seen before, and directly led to the defeat of Gandhi’s ruling Indian National Congress party in the November 1989 general elections.

The case came to light during Vishwanath Pratap Singh’s tenure as defence minister. The name of the middleman associated with the scandal was Ottavio Quattrocchi, an Italian businessman. Quattrocchi was close to the family of Prime Minister Rajiv Gandhi and emerged as a powerful broker in the ’80s between big business and the Indian government.

Even while the case was being investigated, Rajiv Gandhi was assassinated on May 21, 1991 for an unrelated cause.
In 1997, the Swiss banks released some 500 documents after years of legal wrangling and the Central Bureau of Investigation filed a case against Quattrocchi, Win Chadha, also naming Rajiv Gandhi, the defence secretary and a number of others.

Meanwhile February 5, 2004 the Delhi High Court quashed the charges of bribery against Rajiv Gandhi and others, but the case is still being tried on charges of cheating, causing wrongful loss to the Government, etc. Win Chadha also died.

On May 31, 2005, the High court of Delhi dismissed the Bofors case allegations against the British business brothers, Shrichand, Gopichand and Prakash Hinduja.

Rs.2500 crore -Airbus A-320 deal with France involving kickback: In the 1984 Airbus A-320 deal congress collected money. The CBI filed FIR charging senior officials of Civil aviation Ministry and IA with corruption in hasty negotiation to purchases amounting to Rs.2,500 crore. The case not yet solved.

Harshad Mehta security scam, 1992: Harshad Mehta allegedly gave Narasimha Rao Rs 1 crore as bribe filled in a suitcase.

JMM bribery case, 1993: In July 1993, when Narasimha Rao’s government was facing a no-confidence motion, it was alleged that his representative offered big money to Jharkhand Mukti Morcha (JMM) members, and possibly a breakaway faction of the Janata Dal, to vote for him. In 2000, a special court convicted Rao and colleague, Buta Singh. The same Buta singh was made Bihar governor by MMS & Sonia Gandhi.

Sugar Import, 1994: As Congress food minister, Kalpnath Rai presided over the import of sugar at a price higher than that of the market, causing a loss of Rs 650 crore to the exchequer. He resigned following the allegations.

Urea scam, 1996: Advance payment of Rs.133 crore to a little known Turkish firm, Korsan Ltd., for import of urea which was never delivered. Full advance payment of $ 37.62 million was made to Karsan in complete violation of accepted business norms and without any bank guarantee/s. The CBI found that a part of the payment amounting to $ 200,000 found its way back into India via an ANZ Grindlays Bank account in Hyderabad. Also, it would be naive to assume that the NFL M.D. could authorize payment of $ 38 million to the Turkish firm without the consent of scores of officials, going right upto the then Minister of Fertilizer.

Fodder Scam: Fodder Scam is a scam related to Animal Husbandry Department of Government of Bihar in which irregularities of nearly Rs 950 crores (US $ 210 million) were detected. The scam was unearthed in 1996 during the regime of chief minister Lalu Prasad Yadav, but it goes back to 1980s and is believed to have started during tenure of Jagannath Mishra. Charges were filed against Yadav too and later on Mishra was also framed. There are a total of 76 accused, of whom three have died and three turned state witnesses. Yadav and members of his party had to loose their ministerial berths both at centre and state facing corruption charges.

Telecom Scandal: Congress minister Sukhram in 1996 – Rs. 3.6 crores in cash concealed in bags and suitcases from his official residence. The cash was allegedly collected by him committing irregularities in awarding a telecom contract. He was convicted and sentenced to three years’ rigorous imprisonment by a Delhi court in 2002.

The Hawala Scandal
The Hawala case, which came in the open in 1996 exploded in the face of Indian politics, unsettling all the major political players. For the first time in Indian politics, so many politicians were accused of having accepted bribes and misused their power. The amount involved in the scam totaled Rs 65 crores. The lynchpin of S. K. Jain’s hawala network, ‘Amir Bhai’ had four a/cs in Geneva, Dubai, London and Antwerp from where he provided S. K. Jain, the prime accused, among others, with the required amount. He further distributed it to 32 bureaucrats, 30 politicians and NTPC officials. Among the top politicians implicated in the case were M/s L. K. Advani, V.C. Shukla, Madhavrao Scindia, Arjun Singh, Sharad Yadav, Yashwant Sinha and Balram Jakhad. However, excepting Sharad Yadav, all of them were later acquitted of all charges due to the lack of sustainable evidence, for which the CBI has attracted some amount of flak.
When the Hawala scandal surfaced 55 initials mentioned in the diary fill in the political category. Of these 6 have died and of the held 115 names and initials which appear at various places in the dairy only 20 have been linked up. Way back in 1996 when it was disclosed it provided a severe blow to the politicians and all most every political party namely also congress and BJP.

Petrol Pump Scam: Shortly after the NDA came to power in ’98, the BJP was quick to prove it was not "a party with a difference". By ’02, it was evident that most petrol pump, LPG and kerosene allotments during the NDA regime had favoured BJP functionaries, Sangh activists and selected governors and bureaucrats. Then prime minister A.B. Vajpayee was forced to cancel all 3,158 allotments, with effect from January 2000. However, the SC quashed the order. In 2005, an apex court-appointed panel recommended that 296 of the 409 allotments be cancelled.

Barak Missile Scandal: The Barak Missile Scandal is a case of defence corruption relating to the purchase of Barak Missile Systems by India from Israel. In 2001 a sting operation conducted by Tehelka, alleged that 15 defence deals made by the government had involved some sort of kickback and the Barak deal was one of them.

The NDA government set up a commission to investigate the matter. The UPA government, currently in power, has rejected the part-report by the commission and the whole matter is now being investigated by the Central Bureau of Investigation (CBI).

The CBI lodged an First Information Report (FIR) on October 9, 2006 and claims that George Fernandes the Indian defence minister at that time, and the Former Chief of the Indian Navy, Admiral Sushil Kumar were involved. The FIR notes that the Indian Defence Research & Development Organization had sought to block the import of the Barak system right until the end.

The FIR restates R.K. Jain’s admission to Tehelka.com that 3 per cent of this cost went to Fernandes and Jaya Jaitley as commission, while he himself was given 0.5 per cent. These commissions were paid to them by Suresh Nanda, the middleman in the deal, according to the Tehelka tapes. Due to the scandal which emanated when the allegations first surfaced, George Fernandes had to resign his post as the defence minister, although he was later reinstated. In early 2006, R.K. Jain was arrested in the case.

On October 23, 2000, contracts had been signed by the Indian government to procure seven Barak systems at a total cost $199.50 millions and 200 missiles at a cost of $69.13 millions. This was done despite objections raised by several groups, including members of the team that had originally visited Israel to observe the missile performance, and APJ Abdul Kalam, then heading the Defence Research Development Organization. Though some of the objections are of a procedural nature, the Navy Chief of Staff Sushil Kumar is currently under investigation as to why these objections were not considered.

Oil for Food United Nations scam, 2005: Both former Foreign Minister Mr Natwar Singh and Sonia Gandhi led Congress party were named as beneficiaries in Iraqi Oil-For-Food programme corruption in Volker report . Volcker had reported on October 27, 2005 that he and his son Jagat Singh were non-contractual beneficiaries of the Oil for food programme. Allegedly, they along with Jagat Singh’s childhood friend and distant relation Andaleeb Sehgal were associated with a company called Hamdan Exports, which acted as an intermediary for illegal sales of oil to a Swiss firm named Masefield AG. Allegedly, in return, Masefield had to pay kickbacks, (termed "surcharges") partly to Saddam Hussain’s regime and partly to Natwar Singh and others. Pending investigation Mr Natwar Singh has resigned. But who was responsible for money being paid to Congress? Obviously its president – Sonia Gandhi.

Has the corruption been confined to Congress party and its ministers? No.

  • Tehelka.com sent shockwaves throughout the country when it released secret video footage of senior politicians, including then BJP president Bangaru Laxman and Samata Party national president Jaya Jaitly, bureaucrats and army officers accepting bribes for defence deals. This was the first major sting operation in Indian journalism. From then on, getting ‘Bangarued’ came to mean being caught with your hand in the till. The scandal forced Bangaru and then defence minister George Fernandes to resign. The CBI filed charges against Bangaru and two of his aides in July ’06 and against Jaitly in December ’06. Chargesheets were also filed in 2006 against some of the other accused in the Union ministry of defence and the army. R.K. Jain, former treasurer of the Samata Party, was finally arrested in 2006 on charges of receiving huge payoffs in defence deals.
  • During Janata Rule, Morarji Desai and Charan Singh came in for a lot of criticism due to the former’s son and latter’ wife besides other relatives dabbling in Government’s affairs for a consideration.
     

Some of the major corruption cases related to the chief ministers:

  • Madhu Koda Scam: On October 10, 2009, the Enforcement Directorate (ED) charged former Jharkhand chief minister Madhu Koda with money laundering to the tune of over Rs 4,000 crore. In 2005, when he became chief minister at 35, his declared assets totalled Rs 12 lakh. The ED raided his hotels, property and three companies in Mumbai and Kolkata, and also discovered he owned assets in Thailand, Indonesia, Singapore and Dubai. He had allegedly also bought a coal mine in Liberia for Rs 8.5 crore. The one-time labourer has 1,800 bank accounts all over the globe. Investigators said that most of Koda’s assets were held in the name of his main associates: Vinod Sinha of Chaibasa (Jharkhand) and Sanjay Chaudhary of Jamshedpur.
  • Arjun Singh was sacked as MP chief Minister for his involvement in Churhat lottery scam .Later he became congress Vice President, Governor and finally a Cabinet Minister.
  • The DMK chief Karunanidhi was indicted by the Sarkaria commission for corruption in allotting tenders for the Veeranam project. The AIADMK supremo Jayalalitha was convicted for criminal breach of trust and for illegally acquiring government property belonging to TANSI, a state-run agency, and sentenced her to five years’ imprisonment. The conviction disqualified her from contesting the 2001 elections. She appealed agaisnt the snetence in SC. While the appeal was pending in SC her party romped theelections and she became the CM. But the SC ruled a person who is convicted of a criminal offence and sentenced to imprisonment for a period of not less than two years cannot be appointed the Chief Minister of a State .Her appointment as CM was held null and invalid and she had to step down. But SC acquitted her finally for lack of evidence
  • The SNC-Lavelin was another scam that rocked the communist government in Kerala. The CAG report charged the CPM led government of the mid-1990s for a Rs 374.50 crore loss to the exchequer. Former CPM Minister Pinaray Vijayan was allegedly involved in this scam. The CAG found that Lavalin was only a consultant intermediary and not the original equipment manufacturer.
  • The UP chief Minister Mayawati was charged with corruption in the Taj Heritage Corridor scam. This project was meant to upgrade the tourist facilities near Taj Mahal at a cost of Rs 175 crores in 2002-03.It is alleged Mayawati has embezzled the money allotted for this project. CBI is investigating the case. It is alleged her bank account has swelled to 2.5 crores during her tenure at that time. Also her total assets was estimated at 15 crores then. The project is now defunct.

Recent Scams:

  1. 2G
  2. Commonwealth Games
  3. Adarsh Housing Society

Financial Scams

TELGI SCAM: 1991 l Rs 43,000 crore
Counterfeiter Abdul Karim Telgi printed fake stamp paper and appointed 300 agents to sell them in bulk to banks, foreign investors, insurance companies and stock market players, earning around Rs 200 crore a month. The swindle exceeded Rs 43,000 crore and covered 12 states. The Telgi scandal had political implications; a narco test allegedly revealed the involvement of Maharashtra political leaders like Sharad Pawar and Chhagan Bhujbal. On June 28, 2007, Telgi was awarded 13 years of rigorous imprisonment and fined Rs 202 crore. Forty-two of Telgi’s accomplices were also sentenced to six years rigorous imprisonment.

Securities Scam by Harshad Mehta: 1992 l Rs 4,000 crore
In April 1992, a shortfall in the government securities held by the SBI caused panic on Dalal Street. Investigations revealed that Rs 4,000 crore was swindled in a scam involving top officers of many nationalised and foreign banks, as well as stockbrokers, bureaucrats and politicians. Stock markets shut down in panic and share prices plummeted by over 40 per cent, causing a loss of market value to the tune of Rs 100,000 crore. Big Bull Harshad Mehta used ready forward (RF) deals between banks to secure short-term loans against government securities, earning commissions worth crores of rupees. He bribed officials of the Bank of Karad and the Metropolitan Cooperative Bank to issue fake bank receipts (BRs) which were then sold to other banks who lent Mehta money, erroneously assuming that they were lending against government securities. Stocks soared, with crores flooding the market which were later sold for a profit when the BR was retired. Once the scam broke, many banks were left holding worthless BRs.

Bhansali Scam: 1995 l Rs 1,200 crore
Businessman Chain Roop Bhansali invited investments in his financial outfits CRB Capital Markets, CRB Mutual Fund and CRB Share Custodial Services between 1992 and 1996, later transferring the money to fictitious companies. CRB Capital Markets raised Rs 176 crore, CRB Mutual Funds Rs 230 crore and fixed deposits earned him Rs 180 crore. He also raised around Rs 900 crore from markets. Bhansali would pay the interest on investments by borrowing from the market, but he went bust in the 1995 stock market crash and was busted in turn.

UTI Scam: 2000 l Rs 32 crore
Former United Trust of India (UTI) chairman P.S. Subramanyam and two executive directors M.M. Kapur and S.K. Basu connived with stockbroker Rakesh Mehta to buy 40,000 shares of Cyberspace Infosys for around Rs 3.33 crore, when there were no buyers for the scrip. According to the CBI, "the conspiracy" resulted in a loss of Rs 32 crore. The promoter of Cyberspace, Arvind Johari, allegedly paid the UTI officials Rs 50 lakh to promote its shares.

Mutual fund Scam: 2001 l Rs 1,350 crore
After the UTI was bailed out by the government with Rs 4,800 crore of taxpayers’ money, it purchased huge bulks of manipulated shares from ‘Pentafour bull’ Ketan Parekh. The 2001 stock market crash prompted the sebi to inspect the books of several brokers, including Parekh. The CBI arrested him on charges of defrauding the Bank of India of about $30 million. As hundreds went bankrupt and eight investors committed suicide, the markets lost Rs 1,15,000 crore to the scam.

IPO Scam: 2006 l Rs 61 crore
Benami and fake demat accounts were used by financiers and stock market players led by Roopalben Panchal of IndiaBulls to illegally get reserved IPO shares worth Rs 61 crore. Small investors became victims when these shares were sold on the first day of listing itself, making a huge profit from the difference in issue price and listing price.

Satyam Scam: 2009 l Rs 24,000 crore
The Satyam Computer swindle is reportedly the largest corporate scam in India, exceeding Rs 24,000 crore. Company chairman Ramalinga Raju quit after confessing to the board and SEBI that he cooked the books. In Satyams balance sheet of 2008, Rs 5,040 crore as cash assets were inflated to Rs 5,361 crore, earning a non-existent interest of Rs 376 crore. Company debt was stated Rs 490 crore as against Rs 2,651 crore. Based on a high market valuation, Raju and his confederates offloaded their shares, making crores of rupees to buy land using the money to set up 374 infrastructure firms and eight investment companies.

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