I would like, to know, therefore, was the Government of India never aware of the developments in the other countries when its branch was permitted to be opened? What arrangements do we have with Luxemburg, for example, about sharing banking information, not about individual personal accounts, but about banking information, bank to bank as institutions do we have any arrangements or do we not have any arrangements?

Thirdly, did at any time any of our envoys -we have Commercial Attaches, in the U.S., UK., Luxembourg, Peru, Panama, Cayman Islands or the Isle of Man which are covered from the UK. and indeed the United Arab Emirates sent any reports of the activities of the BCCI, particularly as these reports were being published quite widely in the press there? Were these reports ever transmitted to the Ministry of Finance? Did this Ministry of Finance take away action on its own if the report did not reach them? Did the Reserve Bank of India, out of prudence or adequate care, initiate any inquiry into the aspects of BCCI? Does the government have any further information about the activities of the founder of the BCCI when he visited India on numerous occasions? and he is reported to

157 Motion re. collapse of B.C.C.I.

have numerous contacts including the grant of Asia award to a foreign dignitary when our late Prime Minister was the then Prime Minister; and he is reported to have been funding various activities within India. What are those activities? Which are those institutions?

I am given to understand that one of the premier educational institutions in the country was also the recipient of the munificence of Mr. Agha Hassan Abedi. Did the government find that Mr. Agha Hassan Abedi was present with the President of Pakistan at the height of the scare following exercise brass tacks in Jaipur on the infamous cricket match? I do not want to link the cricket match with any one or another. These are the issues that worry us greatly.

What about the reports of Mr. Agha Hassan Abedi's meeting - as I said earlier - with some known smuggler barons of the country? Did the Government of India ever receive any information or try to obtain any information regarding the BCCI's role in Pakistan's nuclear programme, including that of funding, arms transfer. What are the guidelines that exist for public financial institutions?

There are just two demands that I have. I will, of course, answer the points that the hon. Minister of Finance - and others make when it comes to my reply. But I would urge the hon. Finance Minister and the Government to accept these two demands. Please lay the established guidelines for public financial institutions of the country. And secondly, please institute a Joint Parliamentary Committee to look into totality of this great scandal, that is, BCCI.

SHRI GEORGE FERNANDES (Muzaffarpur): I beg to move:

That in the motion,--

after "Indian Companies" insert

"acting as a conduit for shell companies to bring into the country unac-

158 Motion re. collapse of B.C.C.I.

counted money for investment in selected Indian Companies, and indulging in various sub rose activities including financing the smuggling of arms and other contraband material"

(1)

That in the motion,--

after "financial institutions" insert--

"in the matter of lending any manner of support in corporate disputes and takeovers" (2)

That in the motion,--

add at the end--

";and further recommends that till the norms of conduct mentioned herein are finalised and approved, the public financial institutions do not take any steps that will benefit companies figuring in the BCCI scandal." (3)

SHRI CHHITUBHAI GAMIT (Mandvi): I beg to move:

That in the motion,--

for

" and recommends the immediate announcement of norms of conduct by the public financial institutions and the establishment of a Joint Parliamentary Committee of enquiry in the matter." substitute--

"and desires the Government to ensure that in view of closure of the Bank's operations, the interests of Indians and NRIs who invested and dealt with BCCI are adequately protected." (4) SHRI DIGVIJAYA SINGH (Rajgarh):Sir, this House has gone through one of the longest speeches we have heard in the recent times, it has gone at least for more

159 Motion re. collapse of B.C.C.I.

[Sh. Digvijaya Singh]

than two hours in the Session when the Budget had to be guillotined only after discussing three Ministries.

Sir,using the phrasology of Shri Jaswant Singh, his verbal ejaculations relatively sensational in appearance, have been totally sterile in content.

17.00 hrs

SHRI SOMNATH CHATTERJEE: Better at this ago.

SHRI DIGVIJAYA SINGH: Sir, we had to sit through two hours of his long speech and he came out with only one instance which referred to Rs. 22 crores of foreign exchange coming into this country and being invested.

SHRIJASWANTSINGH:There are others also.

SHRI DIGVIJAYA SINGH: Oh, we have some more also I Sir, as far as I am concerned, I had to go through two hours of his speech and heard him with rapt attention. The Rs. 22 crores of foreign exchange that came in and that too which was brought out by the then Director of Enforcement in 1986, the Lily-white Mr. Clean, Mr. Bhurelal, who had an occasion of eleven months...(Interruptions).

SHRI MANI SHANKAR AIYAR (Mailadutural): Sir, Bhurelal cannot be Lily white because Bhure'means brown and 'Lal' means red.

17.01 hrs.

[SHRIMATI MALINI BHATTA CHARAYA in the Chair

SHRI DIGVIJAYA SINGH: I appreciate the point, Sir. The point he made was that some irregularity was committed and the Directorate of Enforcement came across

160 Motion re. collapse of B.C.C.I.

that irregularity

SHRI SOMNATH CHATTERJEE:When?

SHRI DIGVIJAYA SINGH: In 1986. He may have been checked by the then Government. But who stopped him in 1989 November when his mentor Mr. V.P. Singh became the Prime Minister, when our dear friends in the Left Frond and the BJP-again to use Mr. Jaswant Singh's phraseology were cohatding withthat Govevernment that steps Mr. Bhurelal, or for that matter Mr. V.P. Singh, took to take stringent action against those very people who might have committed some crime?

In the present context, Sir, we have just passed a Bill through which we want foreign Investment to come to this country. So, the only point that Mr. Jaswant Singh made in his long speech becomes irrelevant today.

A Swiss banker's comment I would liketo quote. He said, I quote: "Find me one banker who will say no to a multimillion dollar deposit, even if he has serious doubt about the orgin of that money.

And how is he to know that the drug or the gun runner, who may be behind the money, is going to fall out of favour two years from now?

Sir, all public lending institutions' scandals or working has to be seenwith this in the back of our mind.

The Motion, as it stands says:

"That this House, taking serious note of the collapse of the Bank of Credit and Commerce International (Overseas) Ltd. (BCCI) expresses its concern about various reports of misuse of funds by this bank, inclusive of cornering of stocks of Indian Companies" that is part-I "and recommendsthe immediate accuncement of norms of conduct by the public financial institutions" part-11 and the establishment of Joint Parliamen-

161 Motion re. collapse of B.C.C.I.

tary Committee of enquiry in the matter"-part-III. These three points are the content of this motion.

As far as the first part goes, we certainly have no objection in expressing our concern about various reports of misuse of funds by this bank, inclusive of cornering of stocks of Indian companies.

Any Indian company, or for that matter any person of Indian origin, if he violates any law prevailing in the land, then the matter has to be enquired into and if anyone violates the law, then action has to be taken against him. There is no doubt about it. We have no objection to it.

Then the second part is:

"recommends the immediate announcement of norms of conduct by the public financial institutions".

I may say that there are already well laid out guide lines and norms of conduct by the public financial institutions which, I feel, are good enough. What may be necessary is the will to implement those norms.

SHRI NIRMAL KANTI CHATTERJEE (Damdum): There is a recent

modification.

SHRI DIGVIJAYA SINGH: Unfortunately, the hon. Member who has moved this motion, has not cared to define what are the norms which he wants to propose and what are the norms and conduct which he finds oppressive, lenient and missing. That is why I say that his two hours'ordeal was sterile in content.

Then, the third part is:

"establishment of Joint Parliamentary Committee"We had instituted a Joint Parliamentary Committee in the Bofors issue also.

SHRI SAIFUDDIN CHOUDHRY (Katwa): That was also. sterile.

162 Motion re. collapse of B.C.C.I.

SHRI DIGVIJAYA SINGH: Obviously, proved to be sterile later on.

So much was said about Bofors:"So much corruption was there, such and such person hasdone it, we are going to bring out all the names in 15 days or 30 days". Shri V. P. Singh said so. Now he says that he did not say it some of his workers must have said it. We do not know who said it. But, at least, the people of this country gave him an opportunity to name at leastthose personswho were really involved in the Bofors issue. But that has also proved sterile.

The Joint Parliamentary Committee did go into it. The Opposition first said: "Set up the J.P.C.". We did set up the J.P.C. Then they said: "No, make an Opposition Member as Chairman".

SHRI SAIFUDDIN CHOUDHURY: No, we did not say so.

SHRI DIGVIJAYA SINGH:Thatwassaid. I was a Member then also. I am not yielding.

Then they said: "Give us more representation in the Committee; not as per the strength of the House". When we agreed to set up a Joint Parliamentary Committee, the Congress Party had the mandate of the people at that time and as per the representation in the House which was prevalent in the Eighth Lok Sabha, the Parliamentary Committee was constituted. Our dear friends were really not interested in finding out the details. They were only interested in spreading disinformation, character assassination, making insinuations and which- I must give them credit for that-they had very successfully done.

There is another very important and pertinent point. Mr. Michael Hershman-I will come to him a little later-in his interview published in the INDIA TODAY (September 15, 1991) also referred to the Joint Parliamentary Committee to be bipartisan. I do not see the nexus. Is there a nexus? I do not think so. We will have to go into it. But, at the same time, he does go into a suggestion that

163 Motion re. collapse of B.C.C.I.

[Sh. Digvijaya Singh]

the scandals of the BCCI can be brought out, provided a bipartisan committee of Parliament is formed and that too...

I would like to quote him:

The question asked was: "How could the truth be forced to come out?"

The answergiven by Mr. Hershman was:

We could have a strong, independent investigation by a bipartisan Parliament, with the resources and professional staff necessary to conduct the inquiry. If there were people of substance in India who wanted to see an investigation proceed they could conceivably do it with private resources".

Sir, hon. Member Shri Jaswant Singh, when he started on Friday, could have conceivable asked for discussion on Monday also. But, obviously, he did not do so.

Because, on 11th September, the House of Representatives in United States... ... (interruptions)

I quote from Economic Times dated 26th July 1991:

"On the 11th of September the first American Chairman,Clark Cliford and Robert Altman,the Bank&President, had agreed to testify at the first hearing, the Committee (Congressional Committee) said."

Sir, probably he wanted to wait for that hearing to take place on the 11th September.

Sir, Michael Hershman, the great hero of the Fairfax and Bofors scandals, volunteered to testify before the august Committee. But unfortunately, Sir, the people in the Capital have found him not too credible and did not allow him to testify before the Committee. It is very unfortunate. Being one of the sources of our friends here, he was not

164 Motion re. collapse of B.C.C.I.

allowed to testify. Then, Sir, Shri Jaswant Singh ji was again let down by the Court order on the bank of England that till December 1991 the names could not be announced. Sir, it is very unfortunate. It would have been proper if this motion could have been brought in January. By then the sources of Shri Jaswant Singh and Shri George Fernades would have brought out a list probably as they claimed, they would have brought out in the Bofors scandal. The same list could have been made available to us and to the country. Unfortunately, Sir, it came a little too late.

Sir, what are the amendments? The first amendment of Shri George Fernandes says:

after "indian companies" insert "acting as a conduit for shell companies ..." I believe the shell companies are those companies which are operating from tax haven. Am I correct, Sir?

SHRI GEORGE FERNANDES: Yes, Sir.

SHRI DIGVIJAYA SINGH: Thank you.

"... to bring into the country unaccounted money for investment in selected Indian Companies, and indulging in various sub rosa activities including financing the smuggling of arms and other contraband material".

His second amendment says: after "financial institutions" insert -

"in the matter of lending any manner of support in corporate disputes and takeovers"

Reliance and L. & T.they should not be allowed to take over, they should be asked to stop.

His third amendment says:

add at the end-

";and further recommends that till the norms mentioned herein are finalised and approved, the public financial in-

165 Motion re. collapse of B.C.C.I.

stitutions do not take any steps that will benefit companies figuring in the BCCI scandal."

Sir, this amendment totally relates to an issue the corporate war which has been going on in this country for a fairly long time Reliance and Bombay Dyeing. Sir, it is very unfortunate that this House has become a battlefield for the two corporate giants of this country. (interruptions).

Sir, it is more unfortunate that a Member of Parliament of such standing as Jaswant Singh ji and also Shri George Fernandes are using this opportunity and this floor of the Houseto plead one way or the other the positions that have been taken by one or the other. Sir, these corporate giants have enough resources to fight their own battle outside this august House. Let us not waste our time in fighting their battles here. Why should we become pawns in their hands?

SHRI JASWANT SINGH: In fact, I have not referred to any of these companies.

SHRI SOMNATH CHATTERJEE: He thinks you should have done it.

SHRI JASWANT SINGH: He is free to make any charge which he likes.

But I have not referred to any of these companies.

SHRI DIGVIJAYA SINGH: I amnot making any charge.

SHRIJASWANT SINGH:You have made it

SHRI DIGVIJAYA SINGH: It is not a charge. (interruptions) I am not in favour of anyone. I am in favour of the depositors of Indian origin who have their money invested in the BCCI. This particular point was brought out in the amendments given by Shri Prakash Patil and Shri Gamit. That shows their concern. So, I would like to congratulate them for having given the right kind of amendment in this whole motion. That amendment says:

166 Motion re. collapse of B.C.C.I.

That in the motion,-

for" and recommends the immediate announcement of norms of conduct by the public financial institutions and the establishment of a Joint Parliamentary Committee of enquiry in the matter"

substitute-

"and desires the Government to ensure that in view of closure of the Bank's operations, the interests of Indians and NRIs who invested and dealt with BCCI are adequately protected"

This is the concern of the House, which, unfortunately, was not brought out by my friends in the Opposition and we had to bring in this kind of amendment which was necessary.

That is why I say that our friends here are not really concerned with the concern which this House must have, for the Indian depositors. But, they are using this BCCI issue as another weapon, another stick to beat this Government with and settle political scores.

SHRI SOMNATH CHATTERJEE: What is wrong in it?

SHRI DIGVIJAYA SINGH: I have the full right to say whatever I want to say. We have the same story again, as we had during the Fairfax and Bofors disinformation, character assassination, innuendoes, insinuation, half -truths, leaks and throw mud in all directions, at least some will stick. First we had Bofors and now we have BCCI. Who are the lead players? They are, Mr. Micheal Hershman, Mr. V. P. Singh, Mr. George Fernandes, Mr. Gurumurthy and the INDIAN EXPRESS. (Interruptions)

SHRI JASWANT SINGH: I am the mover of the motion.

SHRI DIGVIJAYA SINGH: That is why I was reluctantto tell your name and you were

167 Motion re. collapse of B.C.C.I.

[Sh. Digvijaya Singh]

not the Member of the Eighth Lok Sabha of which I happened to be a Member.

SHRI JASWANT SINGH: But I have enough to do with Bofors.

SHRIDIGVIJAYASINGH:Then, I would call it unholy nexus.

SHRI SOMNATH CHATTERJEE: I think the list is exhausted.

SHRI DIGVIJAYA SINGH: The list is endless. The credentials of Mr.

Somnath Chatterjee and the Left parties are not at all in doubt in this matter. We have nothing against them. The stand that they took regarding Fairfax issue was categorical and clear and we appreciate that.

Madam, unfortunately, the unholy nexus remains the same and unfortunately the target also remains the same the Congress Party, Mr.

Rajiv Gandhi and his family. It is very unfortunate that these very people are still not hesitating to condemn a dead man who valiantly lost his life for the country. Their effort to malign the personality of Shri Rajiv Gandhi and his family is totally deplorable and it should be treated with utter contempt. This is the disinformation not propagated by Shri Jaswant Singh only but by the unholy nexus.


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