Scams aplenty, but few get the in-depth treatment.
Have you heard of Haridas Mundhra? Or Dharma Teja? If you followed the newspapers in the 1950s and 1960s, there is a good chance that you may have come across the names very frequently on page 1.
Mundhra had started out as a salesman of electrical bulbs, and soon built a business of sizeable scale. State-owned Life Insurance Corporation had bought shares in six companies owned by this Kolkata businessman, allegedly in violation of the recommendations of an expert committee. Mundhra, it came to light, was neck-deep in debt and wanted funds desperately. The matter rocked Parliament, where it was raised by none other than Prime Minister Jawaharlal Nehru’s estranged son-in-law, Feroze Gandhi. It also transpired that LIC had declared that it will buy the shares at the price of a particular day well in advance — an open invitation to ramp up the share prices. Such was the outcry that Finance Minister T T Krishnamachari had no option but to resign in 1958. That also ended Mundhra’s career in business, though some of his relatives have done well.
Teja was a flamboyant non-resident Indian who charmed his way through every social circle in town to set up Jayanti Shipping with funds from the government. He had done well for himself, Teja claimed, and now wanted to do something for the country. But Teja’s fortunes began to crumble soon thereafter and he had to take refuge in Costa Rica. His company was taken over by the government.
Unfortunately, there exist no books on these scandals of financial impropriety. There have been several financial scams since Independence, and journalists have done a good job of uncovering these; sadly not many got down to putting it all together in a book.
That began to change for the better in the early 1990s when the Harshad Mehta-led securities scam happened. Journalist Sucheta Dalal, who got suspicious after she found Mehta’s Lexus on more occasions than one outside the State Bank of India office in Mumbai, wrote The Scam: Who Won, Who Lost, Who Got Away along with Debashis Basu in 1993 (UBSPD). The book, which went into reprint in the very first year, gives a good ringside view of how Mehta and his men perpetrated the scam. Two years later, in 1995, R C Murthy wrote The Fall of Angels (HarperCollins). It was touted as “the layman’s definitive guide to India’s Rs 40 billion bank and securities scam”. The book was rich in detail, though it could have been edited better.
So, when the Satyam scandal broke in early 2009, two noteworthy books from journalists came out. First off the block was The Satyam Saga, a joint effort of six Business Standard journalists. It was followed by The Double Life of Ramalinga Raju: The Story of India’s Biggest Corporate Fraud by Kingshuk Nag (HarperCollins). The first chronicled how Raju went about his misdemeanors, what motivated him, how the government swung into action and how the company was saved. Nag’s book was a take on Raju’s persona.
The question everybody wanted to know was what motivated Raju to carry out the monumental fraud? His friends, even though he was behind bars in the Chanchalguda prison, built the case that he did it out of love for Satyam. The company was smaller than TCS, Infosys and Wipro. Raju cooked the books to show the world that he was in the same league as these venerated names. He took the blame on himself, they argued, or else Satyam would have imploded. Not once did he sell shares in the company while the counts were being inflated; so, the stock market angle can be ruled out, they said.
Raju may not have sold shares, but he pledged those shares for loans. Had the reality been known, these shares would have fetched him much smaller sums of money. So, the fraud was not totally impersonal.
