Orissa Matters

Subhas Chandra Pattanayak

The tenth Lok Sabha in its first session was in debate over a motion moved by BJP’s Jaswant Singh on collapse of the Bank of Credit and Commerce International (BCCI), which was a Pakistani Bank of terror-funding and drug trafficking. The motion was discussed in our Lok Sabha, because, under the cover created by the Reserve Bank of India (RBI) this dirty Paki Bank besides having shattered the depositors including various institutions and nationalized Banks of India that had obviously under Finance Ministry pressure invested massive money in it, had ushered in danger to our security. Hints to this discussion were given in our posting on 4th April.
The then Finance Minister Dr. Manmohan Singh was exposed to have tried blackmailing tricks on George Fernandes to silent him on the question of who helped this dirty Paki Bank operate in India.
Starting his speech, Fernandes told the House that in order to “understand the ramifications of the issue”, which was “being debated upon in the House”, it should be the first thing to know, “why and how did this Bank made entry into the country and who gave permission for opening its branches”. Therefore, he said, he had written a letter to the Minister of Finance detailing why it was pertinent to know the facilitators of this Bank in India.
“In response to my letter”, Fernandes told the House, “The hon. Minister of Finance verbally unofficially communicated to me five minutes before the start of sitting of Lok Sabha, that if he gives reply to all the points raised in the letter then the previous Government, in which I was a Minister will come under clouds”.
Fernandes narrated in the House whatever he had told Dr. Singh. “I told him that I have always admitted that all Governments make mistakes. Some Governments make more and some make less. All Governments are bad. But some are worse than others”. In such circumstances, Fernandes told the House, he had requested the Minister of Finance “to bring all the facts to light”.
But Dr. Singh did not bring all the facts to light. Therefore, even after 26 / 11, we are groping in dark about how could the Paki terrorists organized the Mumbai attack.
The Lok Sabha debate shows us that Dr. Singh and his colleagues in Congress had tried to obstruct Fernandes from dwelling on facts germane to establishment of Pakistani terror network in Mumbai through BCCI and the role of Reserve Bank of India when Dr. Singh was its guiding spirit.
Attempts were made by senior Congress members like Digvijay Singh and Ministers like R. Kumarmangalam, Jagdish Tytler, Santosh Mohan Dev etc to obstruct Mr. Fernandes. As he protested and sought protections from the Chair, the Chairman said, “George Sahib, I know your trend of thought is broken a number of times”. But he could not control the Congress members who were determined not to allow Fernandes to proceed with his speech.
The attempt to stifle the discussion was so sharp and sinister that a member, Srikant Jena asked the Chairman, “Is this the way to conduct the House?” and riding over “interruptions”, the Chairman had to say, “Honorable gentlemen, I have been trying to regulate the debate with all the fairness at my command. I agree that Mr. Fernandes was frequently interrupted”.
Why Mr. Fernandes was “frequently interrupted”? It was because, facts quite uncomfortable to Congress were getting revealed.
Let us go to the debate.
Dr. Singh had told the House, “the intelligence agency had reported in 1988 that BCCI has made overtures for acquisition of property and is trying to enter the hotel and real estate business in Lucknow and Bombay in partnership with Amar Rizvi”. Fernandes wanted to know “the role of Shri Amar Rizvi in facilitating entry of this Bank into the country”. Dr. Singh agreed that there was such reports from the intelligence agency, but “nothing was found”. According to him, “The Reserve Bank of India scrutiny of BCCI, Bombay branch did not reveal financing/acquisition of real estate business/property.”
“Before the Reserve Bank of India came in, Mr. Finance Minister, the intelligence agency had come into the picture” and “the intelligence agency viewed this as a fraught on the security risk”, Fernandes reminded Dr. Singh citing from the Minister’s own statement.
But Singh’s version was very funny. The intelligence agency had wanted the matter “to be looked into” and hence “the Reserve Bank of India looked into this. And, they said that there was no truth in it”.
Slowly but steadily it was manifesting that the RBI was used to blur the intelligence report.
RBI was also used to bestow credibility upon BCCI.
The BCCI Bombay Branch Depositors Forum, C/o Bombay Cricket Association, in a document signed by four prominent persons such as Madman Mantri, President Bombay Cricket Association, M. R. Pai, President, All India Depositors’ Association, A. N. Parikh and A. Lobo, after holding a meeting of the forum, had noted that the RBI had been keeping a watch on the activities of the BCCI, as they do in the case of nationalized Banks and they have been issuing certificates.
“Since the RBI has a reputation for adequately safeguarding through maintenance of substantial statutory reserves and through tight controls, the interest of the depositors of all Banks operating in India, none of us had an idea that we would be devastated by double blockage of our moneys” they had noted in the document.
Stressing on this document Fernandes had told the House, “In fact, it was the Reserve bank of India, which granted BCCI the license to operate in India and which audited its accounts”.
When the BCCI cheated innumerable Indian depositors by sudden closure of its operations, the employees earning wrath of the public, in a way to seek protection, had raised a case in the Bombay High Court vide Ordinary Original Civil Jurisdiction, Company petition No. 389 of 1991, wherein they had wanted to say that they cannot be held responsible for collapse of the Bank as that was functioning under strict scrutiny of the RBI, which was continuing to certify in its favor.
“We will rely upon the statement made by the Finance Minister of India on 7.8.91 that nothing illegal or irregular is found in the working of the Bombay Branch of the BCCI”. This is what they had told the Court.
Fernandes had told the House that the employees were the “poor Indians who had been employed by the Bank. They are no way at fault; they were merely working in the Bank for their livelihood. Today, they are jobless; yet they are not worried for their future. Rather, they have expressed their concern over the fate of the depositors, those who have taken loans from the Bank, those who wanted to take loans and those people, whose business has come to a grinding halt, as a result of the collapse of the Bank”.
Fernandes had further mentioned about the BCCI’s “advertisement blitzkrieg” offering huge interests. “Many innocent people and institutions got lured by these advertisements and deposited their money in the bank, in the belief that their money was in safe custody as the R.B.I. was issuing them certificates”, he pointed out.
To the embarrassment of the ruling Congress, Fernandes had hinted on a letter from the British Organization of Peoples of Indian Origin signed by a member of the Government of India’s Consultative Committee for N. R.I.’s investments, Sri Prafulla Patel, wherein it was also mentioned that Indian Citizens “had deposited about Rs. 10,000 crores in India and the U. K.” in this Bank making it clear thereby that Dr. Manmohan Singh’s assertion that the “Reserve Bank of India scrutiny of BCCI, Bombay branch did not reveal financing / acquisition of real estate business / property” was contrary to actual and was absolutely misleading.
The massiveness of misleading ingredients in Singh’s statement got exposed when it transpired that the State Bank of India in UK had given loan of 50 million dollars to BCCI. Fernandes wanted to know as to why this loan was given to the bank that was ill-famed as Pakistan’s terror-funding bank. He further alleged that the Syndicate Bank, once most successful amongst Indian Banks, had to suffer “a loss of about 200 million dollars due to the BCCI.”
In 1986 it had come to notice that some Indian companies operating from Isle of Man purchased shares of Reliance Company of the BCCI. worth Rupees two crores on the basis of share capital of 200 Pounds. The BCCI-Reliance company link was earlier revealed by Fernandes when he had told the House that in response to a letter he had addressed to Minister of Finance, “the reply was given by an official of the company and in response to that letter, M/s. Reliance Industries also wrote a letter”.
Let us take a break and look at how apolitical eyes had looked at BCCI.
SUNDAY magazine (25-31 August, 1991 issue) had noted that according to sources, “the Research and Analyses Wing (RAW) had at least from 1975 onwards consistently opposed the idea of allowing the BCCI to operate in India. Time and again, the Agency had advised the Cabinet Secretary and high-ranking politicians not to let the bank in. The intelligence agency’s advice was based on evidence that the then Pakistani owned BCCI was engaged in secretly funding the country’s nuclear programme”.
TIME magazine of April 1, 1991 had noted, “Nothing in the history of modern financial scandals rivals the unfolding saga of the Bank of Credit and Commerce International. The twenty billion dollar rogue empire, the regulators in 62 countries shut down early this month in a stunning global sweep. Never has a single scandal involved so much money, so many nations or so many prominent people.”
According to journalist Lucy Komisar , it was “a dirty offshore bank that the then President Ronald Reagan’s Central Intelligence Agency used to run guns to Hussein, finance Osama bin Laden, move money in the illegal Iran-Contra operation and carry out other “agency” black ups. ……. Its corporate strategy was money laundering. It became the banker for drug and arms traffickers; corrupt officials, financial fraudsters, dictators and terrorists…..The money BCCI stole before it was shut down in 1991 — somewhere between 9.5 billion and 15 billion dollars — made its 20-year heist the biggest bank fraud in history. Most of it was never recovered. International Banks’ complicity in the offshore secrecy system effectively covered up the money trail”.
Now let us go back to the debate.
Fernandes had quoted from the report of Enforcement Branch (EB) of the Ministry under Manmohan Singh that had said, “Another point that needs to be carefully examined in details is the source of funds provided by BCCI, London and EAB Hamburg, through the Colombo branch for purchase of shares of Reliance, on behalf of overseas firms. ….If detailed enquiries are made with the BCCI, London it may throw light as to how funds were received by BCCI, London for remittance to India for the above purpose and whom the interest/dividend and sale proceeds of debentures received from India on account of the overseas companies were actually disbursed. Such an enquiry may indicate the real persons, behind the transactions”.
That necessary inquiry was not done.
However, the EB had suspected some persons involved in India and abroad in purchase of Reliance share by NRI companies in Isle of Man and had insisted that they should be immediately interrogated and subjected to action under the Foreign Exchange Regulation Act. Fernandes had brought to Lok Sabha records their names as the government had failed to act upon the EB report. They were (1) Dhirubhai Ambani, Chairman and Managing Director of Reliance Industries Ltd. (2) Vinod Ambani, Company Secretary of Reliance Industries Ltd. (3) C.H. Chowksi, one of the Directors of Prabhat Fabrics Private Ltd. Stallion Private Ltd. (4) Pankaj Ishwarlal Kapadia, Share Broker (5) D. Chaturvedi, Chartered Accountant and Share holders of Companies of Isle of Man, namely (I) Krishnakant Shah and his family members of UK (II) U.C. Khamani of Djbouti (III) Praful Shah of USA and Mr. P.S.W. Henwood, Constituted Attorney of Overseas Companies of Isle of Man.
Ambani and the pack thus exposed in the Lok Sabha, Dr. Manmohan Singh’s ministry was also exposed.
Fernandes dived into the background of EB report. “The money was taken out of the country by Reliance and brought by Padiyar through BCCI into the country”. Stumbling upon this nefarious network of black banking, convinced of stupendous illegality involved, the EB has suggested for immediate interrogation and inquiry under the FER Act.
“Has the inquiry been conducted? If so, the facts thereof? What action has taken or proposed to be taken by the Government in this regard?” Fernandes had asked. But Dr. Singh had preferred not to answer.
Fernandes had raised the issue of corporate take-over to show how BCCI was “acting as a conduit for shell companies to bring into the country unaccounted money for investment in selected Indian companies, and indulging in various sub rosa activities including financing the smuggling of arms and other contraband material”. He had questioned the taking-over of Larson and Turbo by Ambani Company. The credibility of this company was so low that, he said, “The financial Institutions run by the Government of India, Life Insurance Corporation, rusticated the elected member of Ambani family by convening the very first and special meeting of the company”.
L & T was working for the defense department of India and in other fields particularly in the field of atomic power. Its former chairman under an affidavit filed in Bombay High Court had complained that his and his family members’ signatures were being forged to take over the company. Disclosing this, Fernandes had asked, “Would you like to hand over this company in the hands of the Reliance, and to its owner, Shri Padiyar, who was directly linked with smuggling out the money from foreign countries and who was transacting the business of B.C.C.I. from London?”
Dr. Singh did not react to this. But the Congress members did not desist from stifling the discussion.
Sri Somnath Chatterjee of CPI(M), who as Speaker would be ill-remembered by history as the man that betrayed his party in the matter of Manmohan Singh’s nuke deal with USA, had at that time contributed a well-documented discussion on the motion. “The main charges against BCCI includes defrauding depositors, giving out dubious loans to select customers, acting as conduit for terrorist activities and CIA operations and having played convenient bank for corrupt rulers of Third world to salt away their illegal wealth. There is a long list of accusations of bribery of the central banks of different countries, political authorities in various countries and acting as brokers in various shady deals” he had thundered, citing various documents including the News week that said, “The CIA had intimate knowledge of BCCI’s alleged dealings with terrorists, drug dealers and corrupt Government officials all over the world.”
Dwelling on BCCI’s connection with CIA and other networks of terror worldwide, Somanath had cited a Time magazine report that divulged, “The soviet invasion of Afghanistan in 1979 and the resulting strategic importance of neighboring Pakistan accelerated the growth of BCCI’s geopolitical power and its unbridled use of the black network. Because the U.S. wanted to supply the mujahedin rebels in Afghanistan with Stinger missiles and other military hardware; it needed the full cooperation of Pakistan. By the mid-1980s, the CIA’s Islamabad operation was one of the largest U.S. intelligence stations in the world.” But the inquiry instituted in U.S. against such backdrop was limping. The Times magazine, attributing the information to a U.S. intelligence officer, had reported, “If BCCI is such an embarrassment to the U.S. that forthright investigations are not being pursued, it has a lot to do with the blind eye the U.S. turned to the heroin trafficking in Pakistan”. Similarly, in England also, because of the involvement of secret Service the investigations were being delayed by the Bank of England, Somanath had shown. It has been described as a ‘Cocaine Bank’ because of its large scale dealing in drugs and one of the biggest criminal enterprises in the world, Somanath had told the House quoting the Times magazine.
“BCCI has a definite role vis a vis funding the terrorist who have been smuggling arms into Pakistan which are being used in Punjab, Kashmir and other places”, he had stated.
“We are fighting with so much concern rightly in this country about terrorism; the whole country is now concerned about terrorism. Secessionism and terrorism, they are eating into the vitals of our country. Innocent people are being murdered. Innocent people are being kidnapped. What is happening in the country? I need not remind the hon. Members here. Everyone is highly concerned. I have no doubt about it. In such activities BCCI’s hands are seen. Therefore, should we not be extremely cautious, extremely careful and should we not revamp cur intelligence activities, particularly our economic intelligence activities, to find out what has really been happening?” He had asked.
“In that context”, Somanath had cried, “when we find that a new Branch was permitted to come up in 1983, certainly certain questions arise which I request the hon. Finance Minister to answer, because, the files are not with us. What prompted the Government to do it?” Had Dr. Singh honestly answered, the country might have been saved from terror attacks.
But he had stated, “As regards the points raised in this House in respect of reports alleging payments to Indian politicians and bureaucrats and financing of terrorist organizations by the BCCI (Overseas) Ltd., Bombay Branch, from the information available from the intelligence agencies and the Reserve Bank of India, there is no indication of specific instances or any definite information of that nature.”
What a cover up!
“Who has done this investigation, MR. Finance Minister? Has this investigation been done by your officers in the Reserve Bank? Will it be to their interest to disclose the facts?” Asked Somanath. “At what level the inquiry has been made by the Intelligence agencies? I would like to know who has made this inquiry. Where are the reports? Will you share them with the House if they are in favor of the BCCI?
Manmohan did not answer.
“If nothing against the country’s interest has been found out, then share it with us and let us see those things”, he demanded.
It was never shared.
On the other hand, the Congress had coined a secret pact with BJP to save its skin as in course of the debate the role of its leaders from Indira Gandhi to Rajiv Gandhi in helping this dirty Bank entering into India and spreading its nefarious activities had been exposed over and above unveiling of the patronization it was getting from the Ministry of Finance of the day. To the greatest relief of Dr. Singh, the mover of the motion, Jaswant Singh had withdrawn the motion. “In the chamber of the Speaker, …… the Minister of State for Parliamentary Affairs and others and indeed the hon. Speaker said: why do you not concede to the fact that you would withdraw your motion at the end of the debate? So, I am bound by my word, and I seek the leave of the House to withdraw my motion” was the withdrawal statement of Jaswant.
Safe being aware of the fate of the motion, Manmohan had told the House that he would look into the matter afresh. “Whatever has been said on the floor of this House I would transmit to the Reserve Bank, to our intelligence agencies. I may also inform the House that I have appointed, rather the Reserve Bank have appointed M/s. Billimoria and Company to do a comprehensive audit of the activities of the Bombay branch (of BCCI) right from the date of its inception.
What had happened to that comprehensive audit? Who were the men behind the spread of the loot and terror network of that dirty Bank of Pakistan-CIA-Taliban combine in India?
When the Finance Minister of those days became the Prime Minister of these days, did he ever look at the report, if any, of audit that he had pronounced then in the Parliament? Had the BCCI not acted as facilitator of Pakistani terrorism in India? Should Dr. Singh not come up with the truth even today to save India from the pernicious grip of cross-border terrorism? Should our peoples not know who of the politicians and officials have betrayed them?