Last week, a special bench of the Supreme Court headed by the chief justice T.S. Thakur ticked off the counsel pleading for extension of bail to Sahara group founder and chairman Subrata Roy in unusually strong terms. While the court later relented after a profusion of apologies from the company’s other lawyers, its stance was a continuance of the severity it has shown in this case.
While this still raises questions over whether courts are the best place to investigate and debate such corporate matters, it does highlight how in all of this, India’s elected representatives seem to play no role. Rarely are they seen censuring or even questioning business leaders in India even when grave offences have been committed.
Of course, India’s parliamentary system lacks a clearly defined structure for public consultations on matters of larger significance to society. Parliamentary hearings do take place where experts are called in to give their views. But it is all by way of friendly chats over cups of tea. The kind of grilling that is seen during Senate hearings in the US, particularly when recalcitrant bankers and corporate leaders are in the dock, is never been seen in India.
In fact around the same time as India’s highest court was passing strictures against the Sahara chief’s lawyers, in the US, Democrat senator Elizabeth Warren was bringing her special brand of combative questioning to a Senate Banking Committee hearing titled: “An Examination of Wells Fargo’s Unauthorized Accounts and the Regulatory Response”. (Watch here ) Over two rounds of interrogation of Wells Fargo chief executive officer John Stumpf, Warren brought out the hypocrisy and differential treatment of corruption and fraud in corporate America. Picking on Stumpf’s claims of personal accountability, something he has been harping on ever since the disclosures of his bank’s high-profile scandal that allegedly involved workers opening unauthorized accounts, she repeatedly asked Stumpf, “Have you returned one nickel to customers?” Obviously the answer was no, at which point Warren called for him to resign and said he should be criminally investigated.
This was no hectoring of the kind we see night after night on prime time television in India where a group of assembled guests take pot shots at each other and, with their biases clearly showing, act as proxies for the opposing camps. The person in question is, of course, never present to face the fire. Here Stumpf didn’t send in lawyers or friends to defend himself from what was later described as a “roasting”.
Of course, Warren is no ordinary politician. Formerly a professor of law, she’s taught at the University of Texas School of Law, the University of Pennsylvania Law School and most recently at Harvard Law School. And she is well-known for her efforts to out Wall Street’s many misdeeds. But she wasn’t the only one. Republican Senator Pat Toomey and Democratic Senator Jon Tester too tore apart the Wells Fargo CEO’s lame excuses. Note how the senators in the fray cut across party lines in expressing their constituents’ anger at a giant financial institution’s refusal to accept responsibility for proven crimes.
Such hearings of a Senate, House, joint, or special committee of Congress, are common in the US and are usually open to the public. The striking thing about these hearings is that the legislators use the opportunity not merely to grill and censure powerful business interests but also to remind the nation of what is right and what is wrong. In one famous exchange in 1994 during the House hearing on the regulation of tobacco products, Representative Henry Waxman challenged R.J. Reynolds CEO James Johnston’s assertion that products like coffee, tea, candy, chocolate and Twinkies (sponge cake) can also pose as many health risks as cigarettes do. Waxman’s reply was intended not just for Johnston but for Big Tobacco all across the world: “The difference between cigarettes and Twinkies and the other products you mentioned is death.”
Sadly we are unlikely to hear such an exchange in our august house. About the only action in Parliament on the huge Kingfisher scam was the recommendation by the ethics committee of the Rajya Sabha to expel Vijay Mallya from the house and that too after the honourable Member of Parliament unfortunately caught with his hand in the till, “thought it fit to impugn the (Supreme Court) judgment and impartiality of the Committee on Ethics as well as the entire House”.
In the many instances of insider trading, defaults on loans, outright lying to shareholders and of course ripping off customers, we have never seen a company owner or CEO being questioned by our political representatives. This lends credence to the charge of a cozy nexus between big business and politics in which no questions are ever asked.
(Sahara has filed a defamation case in a Patna court against Mint’s editor and some reporters over the newspaper’s coverage of the company’s dispute with the Securities and Exchange Board of India. Mint is contesting the case.)
Sundeep Khanna is a consulting editor at Mint and oversees the newsroom’s corporate coverage. The Corporate Outsider will look at current issues and trends in the corporate sector every week. To read more from The Corporate Outsider, click here