Indian politicians and Gulf money....

apr 30th, 2010

not to mention this is where pakistani counterfeit indian rupees come from. in containerloads.

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From:

The Telegraph, April 28, 2010

THE EDGE OF A PRECIPICE

Everything that is rotten in India has a Dubai angle

K.P. NAYAR

The sleaze from the Indian Premier League's gutter, which has significantly diminished the country's political class and others in authority — such as the chairman and managing director of Air India, Arvind Jadhav, who willingly converted the airline into a private carrier for the IPL — is a warning that for the Indian State, Dubai continues to be a curse.

My first direct exposure as a young journalist to the depth and range of corruption and wrong-doing in the Indian government was in Dubai, where I lived in the 1980s. I used to frequent the office of the owner of a big bank in Dubai. His chief hatchet man, his CEO of sorts — although such fancy corporate designations were unknown in Dubai then — was an Indian from Kerala, who constituted my access to the bank owner, a multi-billionaire businessman whose sprawling global business empire included everything from hotels and car dealerships to newspapers and real estate.

It is only an incidental aside to the main narrative of this column that at that time, the bank owner, whose family had huge business and personal stakes in Pakistan, was providing refuge to an exiled Benazir Bhutto in one of his three houses off London's Mayfair and simultaneously running businesses under various names for the head of one of the 22 families which controlled 66 per cent of Pakistani industry and owned 87 per cent of that country's banking and insurance prior to nationalization of those by Zulfiqar Ali Bhutto. While Benazir was running her campaign against General Zia-ul-Haq from this Dubai businessman's London property — where I first met her — the irony is that the man for whom the same entrepreneur was running benami ventures was one of the most powerful ministers in General Zia's cabinet.

The general manager of the bank owned by the Dubai businessman was an amiable Scotsman, who was totally trusted by the owner to look after his wide-ranging interests. One day, the general manager was summoned by the owner and told that a fairly large sum of money needed to be withdrawn from the account of 'Mr Crow' and that the Scotsman should deliver the money to the owner. It would be collected by 'Mr Crow' whom the owner would be seeing in the next two days while he was visiting the Emirate.

I sat quietly in a corner of the room, sipping gahwa, a ritual coffee preparation in Arab communities, and wondering who 'Mr Crow' may be. I did not have to wait long to discover his identity: 'Mr Crow' was a very senior civil servant who later became India's foreign secretary.

For a journalist with a 'nose' for information, Dubai is one of the most open places in the world. Once a newsman has won the trust of an Arab, howsoever sensitive his position may be, he will share information with you which will be wrapped in multiple layers of secrecy in most other countries. In my decade-long experience in Dubai, people share information with trusted journalists in the full knowledge that it will not be written about — until after decades, as in the case of this narrative. Unless, of course, the journalist is seeking a one-way plane ticket out of the Emirate.

So, I found out that the arrangement with 'Mr Crow' was merely the tip of an iceberg of questionable activities in this once-thriving bank, which fell on bad times during one of the Gulf region's cyclical downturns and was taken over by the Emirate's government to be merged with a bigger bank, which was wholly owned by the sheikhdom of Dubai. It is not known what subsequently happened to the secret account of 'Mr Crow'. But the future foreign secretary was not the only prominent Indian to have his illicit wealth stashed away in undisclosed accounts abroad in those days of severe foreign exchange controls at home.

Only a few people at the top in the family-owned, poorly-regulated, unaudited banks in Dubai in those days knew the true identity of account-holders like 'Mr Crow'. I have heard the general manager and the owner of the bank in question discuss with the Malayali CEO of the conglomerate the accounts of a 'Mr Frog' or a 'Mr Cat'. I was told in absolute confidence 25 years ago that a rising politician then, who subsequently became a member of Prime Minister Manmohan Singh's cabinet, was the holder of one such account while another member of Singh's previous council of ministers had a fat account under a similarly fictitious name.

During much of the 13 years when Win Chadha, arms-agent-turned-accused in the Bofors scandal, lived as an absconder in Dubai, India's emissaries who went to the Emirate ostensibly to have him repatriated repeatedly told Dubai authorities that although they were serving papers seeking Chadha's return, in reality they did not want to lay their hands on him. Over the years, such duplicity by New Delhi has cost India the respect of the Dubai government. When Chadha finally returned to India in 2000 during National Democratic Alliance's rule, the then Indian ambassador to the United Arab Emirates, K.C. Singh, successfully used his persuasive powers, not legal coercion to facilitate his return. By then, New Delhi had so completely lost credibility with Dubai in the Chadha case that no Indian official with a modicum of integrity or sensitivity could look the Emirate's authorities in the eye or demand the repatriation of the former Bofors agent.

It is no surprise that Dubai became home to the so-called D-Company, the gang of fugitive smuggler and drug dealer, Dawood Ibrahim, who eventually contracted his services to organize terrorist attacks on India on behalf of Pakistan. Or that Dubai was the transit point from India to Pakistan for some members of the Memon family, who planned the serial bomb attacks on Mumbai in 1993. How could the Dubai government be expected to believe that India was serious about getting Dawood back to Mumbai when it has been plain as daylight to the UAE and to Bahrain that at least on two occasions in the 1990s when there was real chance that Dawood — and his brother Anees Ibrahim in the case on Bahrain — would be extradited, New Delhi blew the opportunities to do so.

Everything that is rotten in India has a Dubai angle: human trafficking, gold smuggling, money laundering and terrorist financing through the hawala or parallel banking system, and now, the IPL. It is symptomatic of Dubai's dubious importance for India's political class that during every election season in India, the value of the rupee shoots up in the Emirate's money market where the Indian currency is freely available and is actively traded. Not only does its value go up: currency notes of Rs 1,000 denomination suddenly become short in supply, obviously because they are physically transported to India to finance the elections with black money.

In the 1980s, when a surge in complaints about exploitation and mistreatment of Indian workers forced New Delhi to offer more institutional protection to immigrant workers, an Indian consul-general in Dubai who sought to ensure such protection was threatened by recruiting agents, Indians who supply labour to the Gulf states. When the consul-general stood his ground, the agents plainly told him that they would go to New Delhi and get their way. Not only did they get their way, but soon enough, the ministry of external affairs instituted several enquiries against the consul-general who eventually left his post under a cloud.

The situation has only got worse and more serious since then as Dubai's hold over India deteriorates into a stranglehold. More recently, another consul-general in Dubai, a very senior officer who is currently serving elsewhere abroad, paid with his reputation after South Block instituted investigations against him based — believe it or not — on allegations levelled against him by known frontmen for Dawood Ibrahim. Relying on 'evidence' provided by Dawood's henchmen in moving against the senior diplomat was like relying on a thief's testimony in a case of robbery against himself!

Last week, speaking about the rot in the IPL and Indian cricket's Dubai connection in the Lok Sabha, Abdul Rahman, the MP from Vellore, singled out for praise two officers, Yash Sinha and Venu Rajamony, who were recently consuls-general in the Emirate. Given the unfair treatment of some of their predecessors by New Delhi which surrendered to cabals in Dubai, it was just as well that Rahman, who lived in Dubai before contesting from Vellore last year, put his impressions on record.

Because more and more of India's rich and powerful are increasingly beholden to Dubai one way or another, the Emirate has now come to believe that India can be treated like another banana republic that Dubai, in fact, is. Last month, Sheikh Mohammed bin Rashid Al Maktoum, Dubai's ruler, accepted an invitation to be a keynote speaker at a conclave organized by a media group, then used that invitation to wangle a meeting with the prime minister and left without addressing the conclave. True, the government had nothing to do with the conclave, but the Dubai ruler's behaviour betrays a lack of decency which ought to inject an element of caution in any future dealings with the sheikh whose policies have brought Dubai to the edge of a precipice.