by Aabid Surti
In short, their relationship was from sunrise to sunset. In the evening, both went their separate ways like shadows getting separated from people.
Those days, Iqbal had two preoccupations, studying in college and smuggling gold in the docks. Like a retired mother-in-law hands over the keys of the house to her daughter-in-law, DK had handed over the entire business to Iqbal.
Now he started closely studying the gold smuggling racket. Of course, so far his computer brain had gathered many useful pieces of information, one such being that middlemen or brokers played a key role in it. These intermediaries were important links between the traffickers and the traders (mainly jewelers).
For example, on the sale of a gold biscuit weighing ten tolas, the broker would take a commission of fifty rupees. There are one hundred biscuits in a jacket. Therefore, his net profit would come to five thousand rupees per jacket. And in the gold market, innumerable jackets were dumped daily.
Some broker would buy five jackets from Sufi while another would buy twenty-five. It all depended on the broker's financial strength. One who bought five jackets earned a net profit of Rs. 25,000 a day, while the one who bought twenty-five jackets earned as much as Rs.1,25,000. Moreover, these brokers used to take their commission from both the parties. That meant double the profits. At times, even more.
The daily fluctuation in the price of gold depends on the bullion markets of London and New York. First, the London market opens at noon determining the price of gold in pound sterling. Accordingly, the price of gold is decided in every country on the basis of the foreign exchange rate of the pound.
This price remains stable till 3 o’ clock in the afternoon when the American market opens in dollars and the price of gold either goes up, down or remains stable. If the price increases then the profit on sale too increases. Sometimes, because of shortage in supply of gold, its price suddenly shoots up. The resulting profit too is pocketed by the brokers.
One day, as Kiran returned from shopping for groceries, she saw a brand new imported car parked below the building. Whose car could it be? Thinking, she came up and got busy in the kitchen cooking Iqbal's favourite dishes humming and whistling. She was already mentally wedded to him. She had taken upon herself all his responsibilities. That was her unblemished love for him.
After about fifteen minutes, Iqbal entered her house and came near the bedroom door. (The bedroom and kitchen were adjoining each other.) “Kiran!” he said from a distance glancing at her casual dress, beige shorts and a white printed T-shirt, “With your permission, may I make a phone call?”
“No, sir!” she said mockingly.
“Do you want me to go down to the post office to make the call.”
She slowed down the gas and came near him. “Iqbal! Am I a stranger?”
“No.”
“Does this house belong to an alien?”
He nodded again.
“Then why did you ask for my permission? Didn’t I tell you…”
“It's an old habit,” he interrupted.
“Its high time you gave that up.”
“Old habits die hard.”
“I’ll get cross with you.”
“I know how to make you happy.”
“Really?”
“Try me out.”
In a theatrical manner, she stomped her foot and sat down on the bed. “I’m angry,” she declared, sitting cross-legged. “I won’t utter a word even if you cry, implore or roll at my feet. Good luck.” And with that she covered her mouth with both her hands.
Iqbal could not suppress his laughter. “I’d decided to take you out on a drive after lunch. And here you are...”
Her mouth opened instantly, “That Mercedes parked below is yours?”
“Of course but unfortunately I can’t take you.”
She slipped down from the bed saying, “But why not?”
“Because you are cross with me!”
“You crook!” She was about to put her hands around his neck when suddenly the whistle of the cooker went off.
She dashed towards the kitchen and Iqbal went for the phone. It was necessary to inform the boss about three hundred jackets that had been dumped in his flat last night.
In fact, he had been with DK just two days earlier. Both were going together to the CCI ( Cricket Club of India), the hub of the neo-rich and the aristocrats, to spend the evening. The car stopped outside the club and as Iqbal stepped out, his eyes spotted a Mercedes Benz 190 parked across. It probably belonged to a memberof the club or a guest.
“What are you looking at?” DK asked stopping near him.
“It's a nice car.”
“Really?”
“It runs on Diesel. Must be worth seventy to eighty thousand.”
“Maybe,” he said, as if he had no interest in the subject and casually entered the club’s lobby.
When Iqbal returned home the previous night, Singh was standing below with the car. “It seems you have cast a spell over the boss. You wish, the genie acts,” Singh commented with a tinge of jealousy handing him the car keys. Iqbal, like a hapless child greedily looking at an expensive toy in the show window, stared at the automobile gleaming in the darkness of the night. He was really impressed by the largesse of the boss.
“Have you disposed of the consignment?” DK asked coming on the line.
“I’ll do it tomorrow.” He said.
Both kept quiet for a moment. Keeping the consignment for a few more hours meant double the risk. There was the threat of a police raid on the one hand and the possibility of a price crash on the other.
“Do you think the price will go up after the opening of the dollar market?”
“No, but the prices will surely shoot up after the London market opens tomorrow.”
“How come?”
“Inflation is on the rise there, hence the pound will crash, so the gold price has to spring.”
“All right.” DK put down the receiver.
After lunch, Iqbal, with Kiran by his side, drove away in his new car.
“How much did you buy it for?” Kiran asked.
“DK gifted it to me. It’s much faster, and an excellent pickup.”
“What was the occasion?”
“Because I dropped the middlemen from the gold business.”
In the absence of the middlemen, Iqbal started earning a profit of five thousand rupees per jacket. That meant, if each consignment comprised of a minimum of one hundred jackets, he would earn at least five hundred thousand rupees in profit – a neat packet.
“To whom will you sell the gold now?” She asked Iqbal again.
“To the middleman only.”
Kiran's eyes widened in bewilderment. She could not follow anything. Her hair was flying as the car sped past Marine Drive towards Haji Ali.
In those years, which were the golden period of gold smuggling, the market was completely under DK's thumb. He was importing jackets in bulk. The middlemen were left with no option but to approach Iqbal to buy gold.
The gold being smuggled into the market was much less than its demand. So, the same middlemen were buying gold from Iqbal without retaining their commission.
“No broker will do business without his commission.” Kiran commented revealing her confusion.
“You aren’t wrong,” said Iqbal, driving steadily. “But you have missed a crucial point. His commission from the other party is still there to reap. Instead of the double commission, he has to make do with a single. Moreover, we have another advantage. Whenever there is a price rise after the London or American markets open and if some middleman comes to us to buy the goods, we also get the benefit of that increase.”
“How was it earlier?”
“Earlier, before both the markets opened for the day, the broker used to conduct business at the prevailing market price and as the price shot up he used to reap the additional harvest too.”
“What if the prices fall?”
“One can predict such an eventuality by using a
bit of intelligence.”
“How?”
“Time Weekly publishes the prices of every foreign currency and market rates. It is necessary for the bullion merchants to study it.”
After traversing through Bombay city, the car stopped in the parking lot of Sun-N-Sand hotel. Both of them entered the lobby and sat on cane chairs under a rainbow-coloured umbrella by the poolside. Iqbal looked at his wristwatch. The sun had set. “Tell me!” he looked at Kiran, “What will you have?”
“What else does one need when you are by my side?” she whispered.
“Mango milk-shake,” Iqbal smiled, asking the bearer to get two glasses.
Though Iqbal transacted business worth millions every day, he never got cash in hand. Of course, he could withdraw anytime as much money as he wished. But a man who never smoked, never touched liquor, kept away from women and did not approve of gambling or racing – how much did a man like that need?
“Sufi!” I needed certain clarifications. “You said you transacted millions every day and yet never got cash in hand. Then what’s the use of having a partnership?”
“Money gets deposited in the joint account of the partners.”
“How many partners were there?”
“Five – me, DK, Singh and two others.”
“You have not mentioned these two partners ever before.”
“You may call them sleeping partners. They seldom played an active role. But they were useful for the safety of our business.”
“Were they top officials?” I speculated.
“DK had involved them because they were very influential persons.” Before I could ask further, he explained, “for example, one of the two was the son of the chief minister.”
Sufi did not have to say anything more. Everything was as clear as daylight. As for the transactions worth millions, he explained about the bankers, who were the backbone of illicit business.
Normally, businessmen carry out their transactions through banks, but then the money involved is clean. Even a child knows that black money cannot be deposited in the bank. Then, where is the black money hoarded? How is it transacted?
To clarify further, DK used to buy gold worth millions. How did he make the payments? He used to sell gold worth millions in India. How did he receive this huge amount? Did he actually pay and receive millions in cash ?
No.
His business was handled by trading firms whom the mafia called ‘bankers'. There are many such small and big firms in Bombay; but five of them are well-known.
If you visit one of these firms in Kalbadevi, you will be in for a surprise. There is one such single-room firm housed in a dilapidated building of this over crowded locality. You will find there three cylindrical pillows neatly placed against the wall and on the cushioned floor; one telephone; one safety vault of the old and trusted brand name, 'Rahmatullah', beside a calendar bearing the pictures of gods and goddesses.
These firms have the government's permission to carry out lending business. For that they also have acquired a license. But while the license is to transact business worth only 20 lakh rupees, they conduct business in crores.
“Are the officials of the tax department ignorant of the duplicity of these bankers?” I asked Sufi.
He smiled as if I had cracked a joke. “Can such huge dealings take place without the knowledge of the government?”
“Then why are no raids conducted on these firms?”
“Who has the guts? Moreover, it’s not easy to trap them.”
“That means they too are as powerful as the mafia.”
“Those who play in millions are never weak. Besides, they also enjoy the support of the underworld. Still, the income tax department does carry out raids at times. Just recently (in 1990), a banking firm was raided. The firm had to cough up Rs.45,00,000 to settle the case,” Sufi said.
“What if the official had refused to take the bribe?”
“Obviously, he would have been transferred to some god-forsaken place.”
Sufi further explained that though these firms are known as bankers, there is no need of a slip book or a cheque book. Here you will find honesty in its pristine form. Just the word of mouth is enough to transfer millions overnight from one man's account to another's.
(It must be noted here that both of them actually do not hold any cash on their person because both have accounts with the banker.)
Let us take another example. DK sells gold worth one crore rupees in the market. A jeweller buys it and informs the banker over the phone. The banker, in turn, telephones DK to inform him that one crore rupees have been deposited into his account.
The question may arise in the minds of common readers as to where the bankers keep the money? Actually, they too do not keep more than a few million rupees. The rest is kept in circulation as loans extended to others on interest or as investment in their other businesses.
“The bankers must be charging fees for handling your money,” I asked him.
“They used to charge thirty rupees a day for every one lakh deposited with them; today (1990) the rate is one hundred and fifty rupees.”
Sometimes, an average trafficker would need a few lakh rupees cash to buy gold. He too would contact the banker who would give him the money at an interest of one hundred rupees a day on every peti (one lakh rupees). The trafficker would buy the gold in the afternoon, make a profit of 25,000 and return the capital along with the interest to the banker in the evening.
“What will the bankers do if someone wants a huge amount in cash?” I asked Sufi.
“What do you mean by huge?”
“Let's say five crore.”
“In that case, the bankers need at least 24 hours' notice so that they can withdraw part of the investment put into different business. Sometimes, when this too isn’t possible, they contact other bankers for help. These five main bankers are like the five fingers of a hand. They come to each other's help when needed,” Sufi explained.
There are occasions when a huge quantity of smuggled gold arrives but the broker does not have the required money to buy it. Then he offers partnership to the bankers.
For example, say the gold is worth ten crore rupees and the broker has only two crore, he would make a proposition to the banker. But, it may not be possible for the banker to arrange for so much cash immediately. So, the banker contacts other bankers and forms a syndicate that would buy gold from the mafia and sell it in the market.
“This explains the transactions done with Indian currency. What about the transactions done abroad?” I raised a new question.
“What transactions?”
“DK was buying gold from Dubai. How did he make payments to the trader in Dubai?”
“Sometimes, the gold is imported against the export of silver of the same value. But this is done only when the price of silver is ruling high in the international market. Otherwise, the Indian bankers know how to transfer Indian currency into foreign currency,” Sufi said, throwing light on the subject.
“How do they do this?”
“They have branches abroad. They only need to inform their foreign branch over the phone that so much money needs to be deposited in the account of such and such party against the purchase of so much gold at so and so rate.”
If we look at the history of trading in gold, we will notice that mostly the price of gold has increased and not declined. Only on a few occasions have the prices fallen. Nevertheless, generally the graph has remained either stable or shot up.
Sufi said, “There isn’t much meat left now in this business. The price of gold increases a little before Diwali and declines and stabilizes after January. The price also declines a bit after the budget is announced in March.”
It is a custom in India to gift gold to one’s sisters during the festival of Dussehra. Then in October comes the marriage season. Many of us believe even today that hoarding gold is a worthwhile investment. This belief held true until a couple of decades ago because the value of gold used t
o double in a year or two on account of the rising prices. Today, money invested in the form of jewelry is virtually a dead investment. Instead, if the people of lower and middle income group families sell their gold and invest the money in small savings certificates or fixed deposits in banks, their money would certainly double in a few years. Such investments will also be beneficial for the country.
“But,” confessed Sufi, “I’ve failed to convince even my wife about it, I won't be surprised if your readers don’t buy it.”
Today, Sufi is married with two children. His son's name is Mujahid and his daughter is called Guddi at home. Though Mujahid is still in school, he is interested in computers.
Sufi was a bachelor then. He was sitting with Kiran under a colourful umbrella near the poolside of Sun-N-Sand hotel sipping mango milk shake. Gradually, the crowd was gaining in strength. Someone was having a marriage reception.
“Iqbal!” Kiran asked him on finishing her drink, “What have you decided?”
“About what?”
“We are made for each other.”
“So?”
“We can get married and start a family.”