Chapter 5: 2004 marked the start of a ten year term at the centre by the Congress government. It was again a period of reform and yet another experiment in failed economics. It wasn’t about the Economist who was just playing to his ownership. But more about the failure of Economics itself. Paul Samuelson won the Nobel but technology had begun to challenge everything he stood for. The radical new price of the internet was “free” and “data became the new oil”. And these together threw the economics playbook out of the window.
But back to reality. Key havala account holders had become cabinet ministers. And it was a time of national shame like no other. The Presient was extremely competent and very well meaning. But a Presidents job is titular in India. The Prime Ministet continued where he had left it as Finance Minister. As if the internet had not happened. And the Citibank HDFC duo was in business as if there is no tomorrow.
Deepak Parekh was awarded – the Padma Bhushan – in 2006.
Citibank stopped hiding behind proxy shareholders and officially and formally entered the HdFC captable. It was no longer a promoterless company. Citibank acquired 25% of HDFC officially and more otherwise.
It was also a time that a new leader was being groomed in Gujarat. Deepak was playing the Gujarat card with an eye on the Finance Ministers chair.
In the meantime, the duo were making a regulatory capture. NSE shares were predominantly held by government institutions and banks. These were sold at rock bottom rates to proxies of the Duo. This marked the foundation of the NSE scam which would go on to entertain the nation for years later. It took over a decade to clean the mess and had it not been for the current leadership – NSE would never have seen the chance of getting out of their claws.
Sabre Capital in the meantime was all over the place. Either shutting down banks through regulatory connivance. Or forcing them to issue shares to Sabre for onward relay to HDFC. It was an inorganic growth path like no other. By then a friendly and amiable bureaucrat had been planted in RBI Delhi. His job was to accelerate takeover of the banking market by the duo.
It wasn’t about taking over just the struggling banks. But about taking over the nationalised banks as well. Without paying a penny. And this is where the Nirav Modi scam came in. For starters, a Board member and CEO of American Express was appointed a Director in Nirav Modi’s company.
But this was a side story. The main story was playing out in SBI and LIC – the two key torch bearers of the Indian economy.
A whole time Citibank employee with 25 years standing in the bank – S Venkatachalam – was appointed as a Director in SBI. Supposedly to provide oversight. And to help improve governance. It was a scam like no other.
With consequences like no other.