Satyam Computer Services Limited was nationalized in January 2009 after its executive Chairman, Ramalinga Raju, confessed to overstating profits. It later emerged that more than $1.5 billion was illegally transferred from Satyam to Raju’s personally owned firms; these included a property firm, Maytas Infra Ltd as per copyright, that owned a $3 billion contract to build the Hyderabad Metro Rail system.

It appears clear that Satyam Computer Services Limited’s independent directors did not fulfill their duties. For instance, at a board meeting on December 16, 2008, to vote on a resolution to approve the acquisition of the Rajus’ property firm by Satyam Computer Services Limited at short notice, none of the independent directors questioned why only that firm was being considered for acquisition rather than any of the other property firms in the market (given the depressed state of the property market at the time, this should have been an obvious question). All the directors voted for the resolution.

The collapse of Satyam Computer Services Limited, India’s fourth-largest IT firm, shocked its clients (whose list included 185 of the Fortune 500 companies) and industry generally. It also challenged the usefulness of two pillars of Indian corporate governance laws – that listed firms employ an independent auditor and that the board should have a majority of independent directors.¹ It also raised questions about corporate governance and corruption generally in India, the scope and effectiveness of the laws on corporate governance, the scope and endemism of corporate corruption, the causes, and underlying trends.

Corruption in India is neither new nor limited in scope. India ranks 85th among the 180 countries in a recent study by Transparency International on political corruption.² The World Bank ranks India in the 25th to 50th percentile on the ability to control corruption.³

Economic corruption in India arose due to state controls of production through licenses and quotas. To gain access to licenses, corporations paid bribes. To gain access to goods and services in short supply, the public paid bribes. Thus, in the public mind, corruption, slow growth, inefficiency, and poor quality became inextricably linked.

A second source of corruption was the misuse of state power. The state has misused power in various ways. These include overstaffing public departments with favored voting groups, reallocating property rights to favored business groups and dispensing privileges in return for campaign contributions. The third source of corruption was inadequate disclosure and enforcement of corporate actions. With a few exceptions, listed companies were run as family firms that viewed their firms as hereditary fiefdoms.

India began reforming its laws from 1991. Licensing for production was eliminated in the 1991 reforms, thus solving the problem of inefficient production and short supply of goods and services.

The state has also shifted from governance by quota to independent regulation. Regulators in finance, insurance, and telecommunications, among others, have been empowered with the right to enforce global best practices and given independence from other organs of the state.

However, corruption in state patronage remains, particularly in land and civic infrastructure allocation, patronage recruitment, and election finance, despite reforms in these areas.

In summary, it appears that while Indian laws are better than in most developing countries, corruption is rampant due to the forces of patronage and lax enforcement. It is widespread enough to be considered endemic. The Satyam Computer Services Limited episode is symptomatic of a wider problem rather than a one-off.

Service providers using Internet search engines in big way; cops can do little as website hosts are usually based abroad. Just as some call it the ‘crime city,’ there is another label that Pune is beginning to be known by — ‘sin city’. With its large floating population of students and youngsters, who form the bulk of staff in call centres, BPOs and other backroom operation hubs, a high profile sex trade business (under the euphemism “escort services”) is booming in the city.

And it is not difficult to find — one merely needs to click “sex service in Pune” on internet search engines and all sorts of links, complete with cell phone numbers of several such service providers pop up. Some escort services also advertise through newspaper classifieds. The demand is not just for females but for male “escorts” as well.

Police sources say that safe lodging facilities and a good climate in the hinterlands has made Pune a prime spot for such activity. Even the youth from rich families in Kolhapur, Sangli, Satara and other upcoming cities flock to Pune to avail of these services.

Adding another dimension to the racket is the sudden proliferation of girls from Uzbekistan in Pune. According to intelligence agencies, given that Pune is home to a number of defence establishments, there is a danger of espionage rackets building around these girls and posing a security threat to the nation.

Police Inspector Rajendra Bhamre of Pune police’s Social Security Cell said that escorts service providers are aware of the huge population of youngsters in the city, who are staying away from their families for jobs or education and are willing to pay high sums for pleasure. “The police can certainly crack down on these websites. But there are limitations because foreign countries host these website,” he pointed out.

Last November, the Pune police arrested three female models and their agents on charges of promoting the prostitution business through an Internet website called chamadi.com. But the accused were soon released on bail and the website is now back in business — offering escort services in Pune at even higher costs.

When they were contacted by posing as a customer, a woman who runs the website said, “We would provide attractive college girls for two hours. Charges vary between Rs 8,000 and Rs 15,000. Customers should first book a hotel and then inform us. The money should be paid in cash at the hotel.”

Explaining why sex rackets were being run so openly, a senior police officer said that the girls and agents who are arrested for promoting prostitution through websites easily get bail in court. “Sex between consenting adults is not an offence. The modus operandi of escort services is fashioned in such a manner that the arrangement between the customers and escort girl looks like that between two consenting adults. Thus, it becomes difficult to book the suspects under sections of the Prevention of Immoral Trafficking Act (PITA), which is non-bailable,” he pointed out.

Pune Police Cyber Committee Chief Coordinator Sudam Choure said that a major joint awareness campaign by social activists and the police is needed to control such escort services. The Pune police have also received complaints from some men, who were lured through newspaper advertisements like “make female friends” published in the classified sections.

In March 2008, the Bund Garden police arrested two men in Mumbai for cheating a Major from the Armed Force Medical College, who had solicited a “good looking female friend” after reading an advertisement carried in a city newspaper in November 2007.

And invariably, there are bogus ayurvedic massage centres. Just a couple of months ago, residents of Pimpri busted a sex racket operated in a bungalow in the guise of a massage parlour. However, with escort services taking over big time — where the services of young, educated men and women are on offer to visiting executives and those from the city who want a night (or maybe a day) out in Pune — clearly the days of old style massage parlours may be numbered.

Corruption hurts everyone, and it harms the poor the most. Sometimes its devastating impact is obvious:

• · A father who must do without shoes because his meagre wages are used to pay a bribe to get his child into a supposedly free school.
• · The unsuspecting sick person who buys useless counterfeit drugs, putting their health in grave danger.
• · A small shop owner whose weekly bribe to the local inspector cuts severely into his modest earnings.
• · The family trapped for generations in poverty because a corrupt and autocratic leadership has systematically siphoned off a nation’s riches.

Other times corruption’s impact is less visible:

• · The prosperous multinational corporation that secured a contract by buying an unfair advantage in a competitive market through illegal kickbacks to corrupt government officials, at the expense of the honest companies who didn’t.
• · Post-disaster donations provided by compassionate people, directly or through their governments, that never reach the victims, callously diverted instead into the bank accounts of criminals.
• · The faulty buildings, built to lower safety standards because a bribe passed under the table in the construction process that collapse in an earthquake or hurricane.

Corruption has dire global consequences, trapping millions in poverty and misery and breeding social, economic and political unrest.

Corruption is both a cause of poverty, and a barrier to overcoming it. It is one of the most serious obstacles to reducing poverty.

Corruption denies poor people the basic means of survival, forcing them to spend more of their income on bribes. Human rights are denied where corruption is rife, because a fair trial comes with a hefty price tag where courts are corrupted.

Corruption undermines democracy and the rule of law.

Corruption distorts national and international trade.

Corruption jeopardises sound governance and ethics in the private sector.

Corruption threatens domestic and international security and the sustainability of natural resources.

Those with less power are particularly disadvantaged in corrupt systems, which typically reinforce gender discrimination.

Corruption compounds political exclusion: if votes can be bought, there is little incentive to change the system that sustains poverty.

The conclusion – Corruption hurts everyone.

It’s usually lonely at the top but not for the chief executive — and his predecessors — of the now critically ill Air India-Indian

Airlines combine. As the airline fights for survival, an RTI application filed by activist Subhash Chandra Agrawal has revealed how over the years the definition of family has been expanded generously — and it’s now a big Hindu undivided family — for the purpose of getting free tickets.

While employees make do with two free tickets a year, CMDs get an unlimited number of tickets for their families even in this time of avowed austerity.

The airline, which is now trying to cut costs, says the freebies would soon be plugged. “There’s a proposal to prune this policy drastically. How can children, grandchildren, daughters-in-law and sons-in-law be allowed to fly at the cost of the exchequer when we are asking for money from government to keep the airline afloat?” said a top government official.

What was essentially to be a policy of free journeys for the CMD and his or her spouse, has over the years come to include whoever the chief wants to be considered as his family for the purpose.

Ironically in 1995 — when private airlines had started threatening its monoply — IA decided to free air travel “on an ‘as required’ basis to CMD and their families while they are in service”. This basically meant unlimited free flights. Then, even as it kept losing market share to new players, IA decided two years later to expand the definition of family.

The memorandum of an Indian Airlines meeting in January 1997 says that the definition of family for an employee includes — “spouse, children, parents, brothers, sisters, dependent relatives and dependent in the household.”

Since the last terms led to confusion, the memo sought to replace this definition with “spouse, children, parents, brothers, sisters, son-in-law/daughter-in-law” ostensibly to include the last two categories. AI on the other hand is magnanimous enough to allow CMD’s discretion in including any relative of an employee as eligible for free travel on “compassionate grounds.”

The reply also contains a copy of a letter written by the ministry of civil aviation last January to the Central Vigilance Commission which admits that “the definition of family in case of ‘as required basis’, perhaps, needs to be pruned.” This admission came following reports how an incumbent IA CMD had taken 161 free passages for self and family. Interestingly, in his reply to the government on this issue, the CMD listed how this had been a common practice with previous CMDs as well! He cited three predecessors who had taken between 173 and 15 tickets for their family’s use in their tenures.

India has a population of more than One Billion. India is the
biggest democratic Country in the world. India’s economy is seems to be
sound. India’s GDP is also improving. Share Market is also booming day
by day.Foreign Direct Investments are increasing too. But we should
also see the other side of the Coin also.

The Credentials of some of the Heads of these Nationalized Banks are as
follows.

Punjab National Bank

Mr. S S Kohli, the Chairman Cum Managing Director of Punjab National
Bank sanctioned and disbursed more than Rs. 30 Crores to an absconder,
a Member of Parliament of Bhartiya Janta Party, Mr. Kanak Sinh
Mangrola, MP of BJP could get loan on fictitious bills. During Police
interrogation, he confessed of paying bribe to the Chairman Cum
Managing Director of Punjab National Bank. Crores of Rupees have been
sanctioned and disbursed to such cheaters and all accounts are either
become NPA or will be soon.

Andhra Bank

Mr. Naraysami, the Chairman Cum Managing Director of Andhra Bank,
sanctioned and disbursed crores of Rupees to fictitious Exporters. The
case was registered by the Prime Investigative Agency, Central Bureau
of Investigation, India and some of the officials have been arrested
and suspended. During interrogation, they had confessed of involvement
of Mr. Naryansami, the Chairman Cum Managing Director of Andhra Bank.
Mr. Narayansami had paid crores of Rupees to officers of Finance
Ministry and BJP leaders and hence is scot free, busy in more
corruption and threatening this new channel every day. Mr. Naraynsami
had sanctioned crores of Rupees to the cheaters, the money of which
will never be returned back.

Bank of Baroda

Bank of Baroda tried to finance Terrorist Groups involving India,
Pakistan, UK, Pakistan, USA and Kuwait. Bank of Baroda’s officers
counter confirmed the Bank Guarantees of more than U.S. $ 80 millions
on forge bills. Mr. P S Shinoy as Chairman cum Managing Director
shielded the corrupt officers.

Bank of Baroda sanctioned Crores of Rupees to more than 100 numbers of
fictitious, 100% Export Oriented Units. Central Excise and Customs
Department of Government of India have arrested most of the owners of
these units. Customs department have already issued crores of Rupees
show cause notices to these units. The efficient finance minister of
India had already suspended 46 officials of Central Excise and Customs.
But Mr. P S Shinoy, as The Chairman Cum Managing Director of Bank is
promoting these corrupt officials. On the top of them are Mr.
Vaidanathan and Mr. Prabhu, their most trusted lieutenants in this
corrupt scandal.

Unit Trust of India

Mr. M Damodaran, as Chief of Unit Trust of India and all its
subsidiaries sold State Emblem of India for mere Rs. One Lac. (U.S. $
2000.00), Unit Trust of India had made losses of more than Rs. 10,000
Crores at a time when BJP was in power. There was a large scale
corruption in Corruption in UTI and thus UTI had to made losses of more
than Rs. 10,000.00. This Unit Trust of India made corruption in
printing of PAN cards. Mr. R Damodaran promoted the officials
responsible for such large scale corruption. Congress Government could
show power and now UTI is relieved from M Damodaran. But no corrupt
official have been punished till date. Mr. Damaodarn is still the chief
of IDBI and any body can guess the fate of IDBI, another prime Bank of
India having multiple objects in Indian economy.

Vijaya Bank

In day Light robbery, Mr. M S Kapoor, the Chairman Cum Managing
Director of Vijaya Bank could manage to steal his file from Banking
Vigilance Department. There were serious corruptions allegations
against him and the enquiry was in the last stages. Only one or two
officials were transferred from Banking Vigilance Department and the
enquiry have been kept under abeyance with the orders of some higher
authorities.

Central Bank of India

During Office Hours, from the office of Under Secretary, Mr. Dalbir
Singh , Chairman Cum Managing Director of Central Bank took away his
secret Vigilance file. This file was of highly confidential nature and
enquiries were in the last stage about serious corruption charges
against him. Indian Government has taken no action. Mr. Dalbir Singh
was also the Chairman of Indian Bank Association. Under the umbrella of
Indian Bank Association, all Indian banks work.

All what is written above is based on documentation available in Indian
Government Files.