Businessmen are close to politicians, especially in business-dominated countries like the United States, but not if they turn criminals. They are then taken to the cleaners, in more senses than one, and left hanging to dry. This doesn't happen in India where businessmen are not only close to politicians, they are often themselves politicians. The dividing line is a thin one. In fact, everyone is a politician in India, though he or she may have started out as a film actor or actress, wrestler, liquor salesman or even bandit. And how can a politician go to jail even when he has committed a murder?
In USA, you are yanked off to jail even if you may have spent the previous night in the Abraham Lincoln suite in the White House. Take the case of Kenneth Lay, the erstwhile chairman of a notorious organisation called Enron Corporation. Last month, he was arrested and taken to jail in handcuffs. His corporation, which is now bankrupt, was at one time among the top ten companies in the US, on par with Pfizer and Heinz.
Enron was basically a criminal joint, full of men and women on the make, including men like Kenneth Lay, a great pal of George W. Bush, who once described him as "our Ken." Our Ken was marched off to jail by a clutch of burly cops where he is now singing for his supper.
Enron is supposed to have contributed millions of dollars to finance the 2000 election of George W. Bush. Lay was friendly with all the Republican big shots, but in the end, when his company went bust and thousands of employees, including quite a few in India lost their jobs, his fate came to rest in the calloused hands of two black cops from Texas.
Last month, another hi-fi US businessman was sentenced to 18 months in jail for serious capital market offences during the IT boom of 1999-2000. Frank Quattrone, a star of Credit Suisse First Boston, was the toast of Wall Street for years and made millions manipulating IPOs. He received a stiff sentence for perjury.
It is not only stray individuals who are sent packing. Whole companies are punished for criminal acts. Japan's financial regulators have just suspended private banking business of world's largest financial group, Citicorp, for major offences relating to banking practices. The group has to wind up its entire private banking business in Japan and leave the country within three months.
All the three companies mentioned above are active in India. Enron was not just active, it was super-active and made a big fuss of its record private foreign investment in India. Its power station at Dabhol has been closed for the last two years and the company is bankrupt. What has the government done? Nothing so far, apart from holding meetings in Singapore and London every other month.
How many corporates have been punished in India in the last fifty years? Maybe a Ketan Parikh here and a Bharat Shah there. But by and large, they have been left untouched, though some small fry may have been shown the insides of jails for a few weeks.
As I write, a woman CEO called Martha Stewart is preparing to go to jail in New York for indulging in insider trading on the Wall Street. Martha is not an ordinary businesswoman. She used to run a popular programme on TV on lifestyle and interior decoration, the kind retired film stars do here. But here they become MPs.
This article was originally published on November 02, 2004.
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