Chapter 14C: one simple step can clean up Indian judiciary overnight. Before joining as a judge of a High Court – after recommendation by the Collegium and approval of the Govt – the individual must clear an entrance exam, and then enrol for a training program to clear an intermediate exam and then a final exam within a year.
99% of the judges recommended by the collegium will fail. The joke in Chandigarh is that if there is a marriage in a certain family, then the High Court of Punjab and Haryana will have to go on vacation because every judge is related to the other.
The judge collegium is identical to the mutual fund business. In fact almost identical.
One judge recommends the child of another judge in return for an assurance that after appointment he will get his son appointed. That is how legal dynasties are created. Till the collegium figured out that there was more demand than supply. Which is how ATM cash van delivery service started to out houses like that of current High Court judge Yashwant Varma.
Citibanks ascendance as the rulers of the judiciary came from three smart strategies. First was to hire all “face value” lawyers so that the opposing party cannot access any. Second was to employ children and relatives of all judges. Third was to bear the cost – both direct and indirect – to catalyse the selection of trusted lawyers as judges. The cash van delivery of Rs 16 crores is just a case of faulty delivery to a member of the Collegium.
When u have millions of lawyers struggling to make a living and thousands jostling for the judges chair – the Citi strategy just needed money. Not much else. And the ability to pay overseas, sponsor scholarships for bureaucrat kids going overseas etc. Given the high risk activities of the Havala Bank, it was critical that people feared them – customers, employees, partners – else anyone could squeal and put everyone behind bars. The strategy was implemented so well that the only bar they had to focus on was night club bars. The other bar reported to them and jail bars were for their opponents.
But back to mutual funds. Citi made a Nobel prize worthy discovery in 1987 when Morgan Stanley their global partner was doing the first issuance of mutual fund units. Money was not in fees to run the mutual fund. But in kickbacks from promoters to buy their shares at market price on the stock market. This could go as high as 50%. In one case 90%. Anchor investors still salivate at these profit avenues.
But SEBI was preventing mutual fund managers from investing in their group companies. So two mutual funds under the guidance of Citi came up with an ingenuous scheme. Mutual Fund A would invest in the shares of companies held by promoters of Mutual Fund B. And Mutual Fund B would invest an identical amount in shares of companies held by promoters of Mutual Fund A. And Citibank would manage that neither played dirty.
This is the one trick that redefined why and how some groups thrived and others died.
