Babaria claimed that the advance actually paid to him by Kirti Ambani totalled Rs 1.3 million, suggesting that if Sequeira had played his cards better he could have squeezed even more money than his Rs 300 000. This accords with the sudden flush of money enjoyed by Babaria at the end of 1988 and early 1989, when he lavished gold jewellery from Bombay’s top jewellers on his wife Hema, bought two old cars and a new sound system for his band, and had a priority telephone installation at his small house in the Bhendi Bazar Police Lines.
The plot came unstuck in mid-July, however, when one of the gang talked about it while drinking in a bar and was overheard by a police informant. The gang member was taken in for questioning and revealed the details. As the gang was rounded up, the sensational identity of the alleged target and client of the gang received attention from the city’s most senior detective, the Joint Police Commissioner (Crime), Arvin Inamdar.
Babaria’s new telephone line allowed the police to collect more evidence against Kirti Ambani by tapping calls between the alleged conspirators. On 22 July they recorded Babaria calling Kirti and mentioning details of the murder plan. Babaria asked Kirti if he knew whether Wadia was in town. Kirti replied that Wadia was in Mumbai because his appeal against the visa decision was fixed for 24 July. Kirti asked about the execution of the plan. According to the police court papers, Kirti said he was ‘fed up with only assurances, dates and no results’. The people chosen for the job were not capable and his account should be settled – that is, the advance returned. Two days later, Kirti is quoted saying that ‘neither he nor his boss were interested in the work any longer’. Babaria had been dodging him for nine months, and Kirti had found out from his own sources that nothing had been done to execute the plan. Babaria pressed to be allowed to continue, but Kirti again asked for the money back and told Babaria to get Sequeira to ring him.
Soon after, Sequeira agreed to turn approver, or state witness, and cooperated in an attempted telephone entrapment of Kirti Ambani. Sequeira rang to ask Kirti whether he wanted his Rs 300 000 back. Kirti evaded a clear rely, but the police said it was clearly established that Kirti knew Sequeira (under an alias) and that the money had been paid to him.
When the full implications of the plot became apparent, the chief detective Inamdar briefed Bombay’s Police Commissioner, Vasant Saraf. In turn, Saraf took Inamdar and his case file up to Chief Minister Sharad Pawar, who carefully read through all the evidence. Having ordered the special protection for Wadia, he told the police to examine every finding with extreme care. On 31 July Pawar rang the office of Prime Minister Rajiv Gandhi in New Delhi and briefed the Cabinet Secretary, B.G. Deshmukh. Pawar said arrests were imminent. Kirti Ambani and Prince Babaria were picked up the following evening and charged.
Pawar’s message had rung the alarm bells in Gandhi’s office. As it was clear that the Bombay police were too far advanced for their investigations to be called off, Gandhi’s advisers turned their efforts to damage control by getting the highly politicised Central Bureau of Investigation (CBI) on to the case.
Later reports said that Pawar himself had suggested to Deshmukh then that, in view of the ‘political sensitivity’ and interstate aspects of the case, it should be taken over by the central government. Other reports said that Pawar had succumbed to strong pressure from Gandhi’s office to make the request. Pawar later insisted it was his own suggestion. Even before the arrests, the Director of the CBI, Mohan Katre, had suddenly arrived in Bombay on 1 August and started pressing the local detectives for details of the case. On 4 August the central government issued a notification transferring the case to the CBI. To the league of Ambani critics, this meant the murder case was destined for the same process of suppression by partisan investigation as the Gurumurthy allegations two years earlier. An action was mounted in the Bombay High Court, in the name of one Professor Ramdas Kishoredas Amin, opposing the transfer to the CBI and asking for measures to prevent vital evidence being interfered with or deliberately ‘lost’. The High Court gave an interim stay order and placed all the records and cassette-tapes of telephone intercepts under the court’s own custody.
The central government appealed to the Supreme Court of India, fielding the most senior members of its Attorney-General’s office, backed by hired senior advocates. The bench of three judges decided on 16 August to modify the High Court order, allowing the CBI access to the sequestered records and tapes, provided that true copies were kept under seal. The case was left with the CBI, but the chief investigating officer of the Bombay Police was to be associated with further investigation.
Around the same time, the enterprising reporter Maneck Davar of the Indian Express found evidence that tended to confirm suspicions that Mohan Katre was indeed one of ‘Dhirubhai’s people’. Davar had heard that Katre’s only son Umesh Katre had a business relationship with Reliance through a company called Saras Chemicals and Detergents Ltd. Posing as a small industrialist, Davar placed an order for three tonnes of the detergent ingredient LAB. The transcripts of Davar’s telephone conversations with Katre junior make it clear that he and Saras were commission agents for Reliance chemical products, so closely related to Reliance that they were able to promise gate passes and receipts directly from Reliance to avoid extra sales tax for the purchasers. Davar found that the younger Katre was earning Rs 5.4 million a year from his Reliance connection, enough to buy an apartment in Bombay at which the CBI director himself stayed when visiting the city, as well as a Mercedes-Benz, which was then a rare luxury in India.
The CBI director’s response was that he had no knowledge of his son’s business activities. Arun Shourie commented in the Indian Express: ‘Is it possible – and that in an Indian household – that you, the only son, should suddenly start making Rs 5.4 million a year and your father should not know? Specially if, as is the case in this instance, you have no particular qualifications other than being the son of the Director of the CBI to bag such a lucrative agency?’ Shourie recalled a famous court judgement against a state Chief Minister, which made it the duty of senior public officials to investigate rumours or signs that their children were extracting benefits or being given benefits by virtue of their parent’s position. The law against corruption fitted Katre to the dot, Shourie said.
As well as recalling Katre’s intervention to have the Express critic Gurumurthy arrested under the Official Secrets Act in 1987, Shourie listed five investigations that had been ‘buried’ by the CBI under Katre’s direction: the alleged gift of a Rs 250 million power plant by a foreign supplier; over-invoicing of raw material imports for PTA production; the surreptitious addition of a paraxylene plant to the Reliance complex at Patalganga without an industrial licence; clandestine royalty payments for chemical processes; and the antedating of letters of credit in 1985 to obtain foreign exchange worth Rs 1 billion.
Katre had not only been assisting Reliance directly, he had also been hounding Wadia as well. ‘When was the last time you heard of the Director of the CBI sitting at the hearings of a case – even a case as important as say the assassination of Mrs Gandhi or the trials of the worst terrorists?’ wrote Shourie. ‘But Katre has spent hours and hours personally sitting through and in a most conspicuous place where the judge could see him, the day-to-day hearings on the case about Nusli Wadia’s passport, a case in which the CBI is not even a party!’
• • •
Wadia himself gave no sign of knowing anything about the conspiracy until after the arrests on 1 August. When a reporter rang him for comment about ‘the case’, Wadia initially started talking about his visa case. But when interviewed by the police soon after, he certainly gave credence to the plot. ‘In the last eight to ten years there have been certain incidents in the course of our business and that of Reliance Industries,’ he said. ‘I feel that these incidents could have motivated Kirti Ambani, an employee of Reliance Industries, to consider me an enemy.’
In a later amplification to a CBI superintendent in December 1989, Wadia admitted that he
had been involved with the Indian Express as a friend of Ramnath Goenka, its owner: ‘Mr Goenka and I both shared the same perception that the Ambanis and RIL, their company, had subverted and manipulated the government to such an extent that they were able to have their way in virtually every field through assistance from the government being directed entirely in their favour. This was possible as they had a large number of powerful supporters both among the bureaucrats and politicians in power. The Indian Express in a series of articles exposed many of the wrong doings of RIL and the favours that were granted out of turn to it. I through my association with the Indian Express helped and was indirectly involved in some aspects of the publication of these articles. I was also associated with Mr Gurumurthy who was the author of the said articles.’
Mukesh Ambani, when interviewed by the CBI on 1 June 1990, was at pains to play down the ‘rivalry’ with Wadia and the effect of the ‘misinformation’ conveyed by the Express. He did not blame the Express articles for his father’s paralytic attack in 1986, which he said was a hereditary illness. Kirti Ambani had come directly under Mukesh Ambani, but had no authority to spend large sums of money. ‘About Kirti Ambani’s alleged involvement in a case of this type, we came to know through his arrest,’ Mukesh said. ‘In fact it is hard to believe that we needed or need any retrogative [sic] step for our survival, as a few times back, we were supposed to be close to power.’
In the immediate aftermath of the arrests, the response of Reliance had been to cast suspicion on a counter-conspiracy against the Ambanis themselves and to play up the rivalry angle. ‘As the case is sub judice, we have been advised not to comment on the charges levelled against [Kirti Ambani],’ a company press release said on 1 August. ‘But [we] would like to state that this appears to be a deliberate frame-up aimed at embarrassing and maligning our organisation at a point of time when one of the group companies is going in for the largest public issue in corporate history. It is a matter of great regret that an innocent employee of the company is being dragged into such an unseemly controversy resulting from business rivalry.’
Reliance executives had spread the idea that the conspiracy had been cooked up by Wadia, Pawar and the Indian Express group with the simultaneous objectives of nobbling the debenture issues for the Reliance Petrochemicals plant at Hazira, getting Wadia out of his difficulties with visas and raw material supplies and (for Chief Minister Pawar) striking a damaging blow at Rajiv Gandhi.
They pointed out that Pawar’s state government had appointed as prosecuting counsel the senior advocate Phiroz Vakil, who had earlier represented Wadia and Gurumurthy in the Thakkar–Natarajan inquiry into the Fairfax case. (It was not mentioned that Vakil had also appeared against Pawar in another case.) Had they researched the background of Babaria, they might also have pointed out his descent from a long line of police narks. An anonymous note was circulated among press people in Ahmedabad, alleging a history of mental illness in Kirti Ambani’s family.
Against a general scepticism that murder was part of the Ambani repertoire – and a belief that, if it had been, the plotting would have been more competent – this frame-up theory found plenty of takers.
• • •
The CBI continued to give every appearance of an active investigation, but a fatal flaw had been introduced by the CBI into the prosecution case. The body of evidence amassed by the police against Kirti Ambani and Babaria was highly circumstantial, drawing on hotel records and bank transactions that backed the alleged sequence of meetings between the conspirators and the transfer of money to the proposed hit team and on the telephone taps made at a late stage when Kirti Ambani was highly reluctant to take the plot further. Was Kirti the instigator of the plot, or had Babaria trapped him into it?
The crucial additional evidence was the confession of Sequeira, the hit man who had turned government witness. Without his testimony, the plot looked highly improbable and amateurish, Babaria hardly being convincing as a hard man of the underworld. Under Katre, the CBI arrested and charged Sequeira as Plotter No. 3 – a step that invalidated his earlier testimony to the Bombay police and completely destroyed any prospect of his testifying in court to implicate the others.
After the initial appearance of Kirti and Babaria in August 1989, the case disappeared from public view. Soon after the CBI took over, both the accused were allowed bail. Babaria said Kirti Ambani arranged half of the Rs 50 000 he posted. The other characters like Sequeira also got bail and sank back into the Bombay underworld.
The conspiracy case has been neither withdrawn nor proceeded with, but remains in judicial limbo. The backlog of many thousands of cases in the Indian court system is a convenient place to bury politicised scandals. Whether the Kirti Ambani episode was a murder conspiracy or a frame-up remains waiting its judicial test more than two decades later.
14
A political deluge
In the second quarter of the year India is limp with heat, waiting for the monsoon rains to arrive. For Dhirubhai, the monsoon of 1989 was less a relief than a forerunner of the political deluges to come.
On 24 July it brought cloudbursts to the Western Ghats and coastal hinterland of Bombay. The valleys around Patalganga became channels for the immense run-off; the new industrial zone built right by a river bank was soon under two metres of water. The Reliance factory had no protective flood walls nor any flood insurance. Its much-inspected machinery was immersed in mud and water for days. It was a disaster that threatened the very solvency of Dhirubhai’s company, which had just struggled back to real profitability after three years of financial jugglery.
It was a crisis that brought back some of the old Ambani magic, recalling the fast assembly of the original polyester yarn plant. Mukesh Ambani once again assumed direct charge on the spot. Under the direction of its engineers, Reliance brought in an army of contract workers to disassemble the machinery, clean and oil each part, then put the whole thing together again. The plant was back in operation after a month, a triumph of Indian labour intensity under expert direction.
But even this brought its controversy: the Indian Express reported that Reliance was seeking Rs 2.25 billion in concessional loans from the government financial institutions, to finance yet another covert expansion under the guise of rehabilitation. By September, the Syndicate Bank was organising an emergency consortium loan of a more modest Rs 850 million.
Another flood was undercutting the Congress government. V.P. Singh’s decision not to form a new party but to try to unify existing parties was paying off. In October 1988 splinters of the old Janata coalition began moving back together, with the merger of the Janata Party and the Lok Dal into the Janata Dal.
A month later, the Janata Dal formed an affiance with regional parties from Assam, Andhra Pradesh and Tamil Nadu, called the National Front. As Rajiv neared the end of his five-year term, the National Front formed working relationships with the Left parties and, less trustingly, with the other main force opposing Congress, the Bharatiya Janata Party (BJP) – the Hindu nationalist party that had taken the old Jana Sangh elements back out of Janata. The elections on 22 and 24 November 1989 saw Rajiv’s Congress crash from its 415 seats of 1984 to only 192 seats in the 545-member Lok Sabha.
It was still the largest party as the National Front had gained only 144 seats. But with support from the BJP’s eighty-six members and the Left’s fifty-two and with Rajiv relinquishing any claim to try to form a government, the National Front was invited to do so. After five days in which a leadership challenge from the veteran Janata leader Chandrashekhar was diffused, V.P. Singh was sworn in as Prime Minister.
Although he could not avert the storm, Dhirubhai had taken some steps to protect himself. In July 1989 the Indian share markets saw massive selling of Reliance shares by investment companies controlled by non-resident Indians. They were moving their funds into foreign currency non-resident accounts, a necessary step towards repatriation and a protection against both a share market fall and a currency collapse. If these
were the Reliance-owned companies, it did not necessarily mean that Dhirubhai was selling out his own stock. Reports at the time said two sets of brokers appeared to be working on behalf of Reliance, one set to sell and the other to take delivery.
It was a sound precaution: during the two months to the election, the Reliance share price lost a third of its value, against a slight rise in the overall share market. All other Ambani-related stocks (Reliance Petrochemicals, Larsen & Toubro and various debentures) also fell. The institutions that had once rushed to help prop up his share prices now held back, anticipating a change of government. The investors who had converted their G Series debentures at Rs 72.5 now had a stock worth Rs 70. With some glee, the Indian Express reported that Reliance, ‘who straddled the industrial arena like a colossus during the Congress (I) regime [i.e. Indira Gandhi’s prime ministership], is now facing a winter of despair’.1
The new government saw all of Dhirubhai’s old opponents back in power. Singh brought back the former Revenue Secretary Vinod Pande from Rural Affairs to be his new Cabinet Secretary. The former Enforcement Director, Bhure Lal, was put on the Prime Minister’s staff as a special officer. The new Finance minister was a proponent of public sector investment, Madhu Dandavate, who had also been a leading critic of the Ambani style.
Those seen as friends of Dhirubhai were now on the outer. The new government soon transferred the officials it saw as Dhirubhai’s protectors in the Finance Ministry, including the Finance Secretary, S. Venkitaramanan, the Revenue Secretary, Nitish Sen Gupta, and the chairman of the Central Board of Direct Taxes, A.S. Thind. The CBI director, Mohan Katre, was retired and the agency set to work on tracking the Bofors and other scandals that had surfaced under the previous government. The Unit Trust of India’s chairman, Manohar Pherwani, and the Bank of Baroda’s chairman, Premjit Singh, were shifted early in 1990.
Mahabharata in Polyester Page 21