"I have made the above statement on the basis of information available at present. In case further information becomes available, the Government will take appropriate action." [Translation]
It would have been better if the hon. Minister of Finance had issued another statement about the additional information received and the action taken thereon by the Government. In that case the scope of the current discussion could have been limited any probably there would not have been any requirement for it. But since additional information has not been provided now we will have to widen the scope of the discussion. I hope a detailed discussion will be held.
Sir, it is necessary to understand the ramifications of the issue, which is being debated upon in the House. Firstly, why and how did this Bank made entry in the country and who gave permission for opening its branches. We would like clarification of these aspects by the hon. Minister of Finance. I wrote a detailed letter to the hon.
Minister. The reply to the letter was given by an official of the company. In response to that letter, M/s. Reliance Industries also wrote a letter and sent me a copy of the same which I forwarded to the hon. Speaker of Lok Sabha.
179 Motion re. collapse of B.C.C.I.
THE MINISTER OF FINANCE (SHRI MANMOHAN SINGH): I think I may be wrong. But the letter which you wrote to me was given to the press before it reached me.
SHRI GEORGE FERNANDES: It was not given before. It was delivered at their office later on. But those are technicalities. In this debate, that is not an important question.
Sir, later on the company in writing expressed its regret to the Hon. Speaker of Lok Sabha and said that the letter was written inadvertently by the company. The newspaper published both the original as well as the letter of regret written by the company.
Therefore, at their end the matter is over. In response to my letter, the hon. Minister of Finance verbally unoffically communicated to me five minutes before the start of sitting of Lok Sabha, that if he gives reply to all the points raised in the letter then the previous Government, in which I was a Minister will come under clouds. Whatever I told him, I would like to reiterate in the House. I told him - that I have always admitted that all Governments make mistakes. Some Governments make more and some make less.
All Governments are bad. But some are worse than others.
I therefore, request the hon. Minister of Finance to bring all the facts to light. I urged him not to care for the malignity of the previous Government, Shri V. P. Singh or the former Finance Minister or anyone else. If the Government feels that nothing wrong has been done, then I have no hesitation in saying that the granting of permission to the Bank was itself wrong. I have been told that 180 Motion re. collapse of B.C.C.I.
the name Patil contained in my letter refers to Governor Patil. It has been said that the names mentioned by Shri George Fernandes and the letters referred to by me are totally incorrect. Probably they may be right, because I write letters on the basis of information supplied to me by various individuals. Therefore, instead of going into technicalities do not try to divert attention from the main issue. I would like to know who granted permission to the Bank for opening its branches into the country in violation of the orders of Governor of Reserve Bank of India. Many names have been mentioned by the hon.
Minister and Shri Digvijaya Singh in the House. One of my colleague in the House suggested that an objection should be raised, in this regard but since we intend to mention a few names today, I thought it better not to raise objection. I would like to know the role of Shri Amar Rizvi in facilitating entry of this Bank into the country. Possibly the information available with me may not be correct about the roles of various persons. A very pertinent point mentioned in the statement of the hon. Minister of Finance is that:-
"There were also reports in 1988, from intelligence agency that BCCI has made overtures for acquisition of property and is trying to enter the hotel and real estate business in Lucknow and Bombay in partnership with Amar Rizvi."
SHRI MANMOHAN SINGH: But I also said that nothing was found.
SHRI GEORGE FERNANDES: I am reading the Minister's statement. I would like to know...
SHRI SONTOSH MOHAN DEV (Tripura West): Please read it in full, not in part.
SHRI GEORGE FERNANDES: I have read it in full. There is nothing beyond.
"The Reserve Bank of India looked
181 Motion re. collapse of B.C.C.I
into the matter and the Reserve Bank of India scrutiny of BCCI, Bombay branch did not reveal financing/acquisition of real estate business/property."
Of course, it did not because the intelligence agency viewed this as a fraught on the security risk. Before the Reserve Bank of India came in, Mr. Finance Minister, the intelligence agency had come into the picture. This is your statement. I do not have access to this intelligence report. It is your statement that I was quoting.
SHRI MANMOHAN SINGH: You are miss-quoting the statement. I did say that our intelligence agency has got some report to this effect.
They said that this should be looked into. The Reserve Bank of India looked into this and they said that there was no truth in it.
SHRI GEORGE FERNANDES: I have the information that an effort was made to acquire the real estate. I am making this statement with full responsibility that the efforts were made to acquire the real estate and intelligence agency did submit a report and the Reserve Bank did make a statement that the Finance Minister has just now referred.
MR. CHAIRMAN: There is a little difference, Mr. George Fernandes.
You are saying that it was checkmated because the intelligence agency stepped in. But the Finance Minister is saying that he checkmated as soon as he came to know about it.
SHRI GEORGE FERNANDES: Sir, I started by saying that I may be making some mistakes in terms of personalities, dates and so on and so forth. So, Mr. Chairman, Sir, we would like to know as to under whose pressure and under what circumstances permission was granted to this bank when the Reserve Bank of India was not in its favour. Is it not a fact that a meeting of the Secretaries was convened for this specific purpose and an effort was made to change all the rules and procedures Governing the
182 Motion re. collapse of B.C.C.I
entry of a foreign bank into India? Is it also not a fact that the then Governor of the Reserve bank had refused to attend that meeting?
Is it not true that despite all this, the Bank was allowed to open its branch in the country and is it not a fact that the then Reserve Bank Governor described it to be a very wrong decision and took a decision to keep a special watch on the activities of this Bank?
Mr. Chairman, Sir, perhaps Shri Digvijaya Singh has left the House, but he should have been here, because he had expressed his reservation about bringing his party or party leaders into the picture. We too are not interested in bringing any party into picture, but there should be no objection whatsoever, if I say that license was granted to this Bank in 1983 during Shrimati Indira Gandhi's tenure as Prime Minister, despite the reservations expressed by the Governor of the R.B.I., because it is a fact. I know that questions would be raised regarding the steps taken by Shri V. P. Singh in this regard.
In 1986, when it came to notice that some Indian companies operating from Isle of Man purchased shares of Reliance company of the B.C.C.I.
worth Rupees two crores on the basis of share capital of 200 Pounds any when investigation into the matter was done why no action was taken in 1987 on the basis of that report? Why it was not implemented in 1988? When they put questions as to why Shri V. P. Singh didn't take any action on the basis of that report, they tend to forget all these things. When they can raise such questions, there won't be anything wrong on my part, if I say that it was Shrimati Indira Gandhi's Government, which issued the license to this bank in the year 1983.
Mr. Chairman, Sir, we would like to get the replies to these questions on the floor of the House. The most important point is how this bank was allowed to open its branch in the country.
Mr. Chairman, Sir, another important question is regarding the activities of the bank in this country. I have got some letters 183 Motion re. collapse of B.C.C.I
[Sh. George Fernandes]
with me. One is from the Employees Union of the bank. Those people came to meet me. They must have met some other hon. Members as well.
They told us their problems, but along with that they have pointed out to a very dangerous thing in their letter. They have addressed this letter to the Deputy Governor of the Reserve Bank, the first sentence of which reads as follows.
"We the entire staff of B.C.C.I. at the outset wish to apologise to the Reserve Bank of India for having put them in a rather awkward situation."
This, they have written, despite the fact that they personally haven't put anyone in an awkward situation. They are the poor Indians who had been employed by the bank. They are no way at fault, they were merely working in the Bank for their livelihood. Today, they are jobless yet, they are not worried for their future. Rather, they have expressed their concern over the fate of the depositors, those who have taken loans from the Bank, those who wanted to take loans and those people, whose business has come to a grinding halt, as a result of the collapse of the bank, but alongwith all this, they have mentioned something serious as well. They have filed a case in the Bombay High Court.
"In the High Court of Judicature of Bombay, Ordinary Original Civil jurisdiction, Company petition No. 389 of 1991.
It is against the R. B. I. in this petition, filed on behalf of the employees, it is mentioned that
184 Motion re. collapse of B.C.C.I
"We will rely upon the statement made by the finance Minister of India on 7.8.91 that nothing illegal or irregular is found in the working of the Bombay Branch of the BCCI".
They have deposed this before the court. On the one hand, we have this letter of the employees and our sympathies are also with them. On the other, I have with me this letter from the B. C. C. I. Bombay Branch Depositors Forum, C/o Bombay Cricket Association, signed by four prominent persons viz Shri Madhav Mantri, President Bombay Cricket Association, Shri M. R. Pai, President, All India Depositors' Association, Shri A. N. Parikh and Shri A. Lobo. This letter was written, after holding a meeting of the forum. In their letter, they have made certain remarks about the R. B. I. to which the hon.
Minister of Finance should pay attention. I am not asking the Finance Minister to look into it, because their remarks are unwarranted or anything like that. Rather, they have said that R. B. I. has been keeping a watch on the activities of the B. C. C. I., as they do in the case of nationalised banks and they have been issuing certificates. In fact, it was the Reserve bank of India, which granted B. C. C. I., the license to operate in India and which audited its accounts and to quote them-
"Since the RBI has a reputation for adequately safeguarding through maintenance of substantial statutory reserves and through tight controls, the interest of the depositors of all banks operating in India none of us had an idea that we would be devastated by double blackage of our moneys".
They have also mentioned in the letter, the various other difficulties they have faced and they expect the R.B.I. to take some 185 Motion re. collapse of B.C.C.I.
initiative in this regard. I am sure, the entire House will understand the pain and agony of the depositors. The Bank had inserted an advertisement blitzkrieg to attract depositors and was offering huge interests. Many innocent people and institutions, got lured by these advertisements and deposited their money in the bank, in the belief that their money was in safe custody as the R.B.I.was issuing them certificates. Mr. Speaker, Sir, we should think about these people. I would like the hon. Minister to pay special attention to this matter.
I am also in possession of a letter from the British Organisation of People of Indian Origin, to which my friend Shri Jaswant Singh has also referred. This letter is signed by Shri Prafulla Patel, who is a Member of the Government of India's Consultative Committee for N. R.
I.'s investments. As a member of this committee, he has sent three or four documents, in which there are two important points. He say that [English]
The Sheikh of Abdu Dhabi had given written undertaking to the regulatory authorities in London, Luxemburg and Caymen Islands that they will make good all the losses. They were willing to underwrite all the shortfalls.
In this letter, it is also mentioned that Indian Citizens, had deposited about Rs. 10,000 crores in India and the U. K. If this is a fact, we would like to know whether the hon. Minister of Finance is aware that the Sheikh of Abdu Dhabi had agreed to make good all the losses and if so, what steps did our Government take, when the Sheikh made the announcement in this regard? However, another thing that they have mentioned is for more important. They have said that British Government has constituted a committee, Bingham Inquiry Committee by name to investigate the whole issue. According to them, it is merely an exercise, an eye-wash. It won't serve any purpose. Such
186 Motion re. collapse of B.C.C.I.
a committee should be constituted that will go deep into the whole issue and find out the facts. This is what they say. Further they have also mentioned, what they expect from the Indian Government.
The least that the Indian Government can do is to take a stand on this issue in Parliament and to do all that is necessary through diplomatic channels so that the depositors can recover their deposits.
After all, why should the innocent depositors be penalised for the activities of a few Pakistani crooks and law breakers who have run this bank within a bank and siphoned of millions of dollars.
They want the Parliament to discuss this matter. It is my request to the Government that it should pay attention towards issues like the problems faced by the employees and depositors of the bank who are Indian and to help them out by devising some way.
Mr. Speaker, Sir, the aforesaid letter also mentions the name of prominent individuals and industrial houses like Tatas, Birlas, United Group, Reliance etc., whose names Shri Digvijaya Singh has just read out. We are not concerned about the amount of money they have deposited in these banks. The amount of money they have deposited and the amount of money taken out etc. will come to light, once the investigation is done. You must have certainly put the whole matter before the Reserve Bank, for the purpose of audit and the bank too most have appointed a Receiver to look into them and certainly we will get some information, in due course. However, our objection is particularly to the other activities of the Bank. Due to the paucity of time, I won't read out the entire Resolution, but in the amendment that I have proposed, in the larger interests of the public.
187 Motion re. collapse of B.C.C.I.
[Sh. George Fernandes]
I had suggested:
"acting as a conduit for shell companies 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"
SHRI DIGVIJAYA SINGH: Our objection is only to the last two activities mentioned.
SHRI GEORGE FERNANDES: Didn't you say or not that there is
nothing objectionable in these activities? You have no objection to the activities mentioned in the first paragraph. It is a fact that the bank has been acting as a condult for shell Companies' to bring into the country unaccounted money and indulging in Sub rosa activities. I was glad to learn that you have no objection to these charges.
Regarding the raid conducted in 1986, the hon. Minister of Finance has mentioned here that:
BCCI was involved in a controversy in 1986 when investigations by the Enforcement Directorate revealed that the bank was releasing foreign exchange against foreign travel scheme to travel agents without verifying the signatures of those who have travelled.", etc.
With the result that a substantial amount of foreign exchange was released on the strength of the forms bearing forged and take signature."
Shri Digvijaya Singh has said in the House that it is not true that all this money was collected for Haj. (Interruptions)
SHRI DIGVIJAYA SINGH (Rajgarh): I
188 Motion re. collapse of B.C.C.I.
only said that, "On enquiry the passports were found to be fake". This is what I said.
THE MINISTER OF FINANCE (SHRI MANMOHAN SINGH): And that is
SHRI GEORGE FERNANDES: So, this controversy took place, about which the hon. Minister of Finance made a mention here. Thus, many such allegations were levelled against the company in the aftermath of the controversy (Interruptions)
Some of the employees were detained under the COFEPOSA Act.
The hon. Minister of Finance has presented some figures here. In that raid itself, U.S. Dollars worth Rs. 1,32,000 and Rs. 17,00,057 were seized. We have informed the Finance Minister about it and we believe that the amount seized during the raid was their earning of a single day and the company has been indulging in these activities throughout the year. They made take passports, got dummy tickets issued and siphoned off $ 500. This company made $ 2.5 crores...