NEW DELHI: Bowing to the Opposition demand Prime Minister P.V Narasimha Rao recently announced a “comprehensive inquiry” by a Joint Parliamentary Committee (PC) into the Rs 3500 crore securities Scam with an assurance that the Government wanted to “unravel the truth.”

Making a statement in both Houses of Parliament the Prime Minister said apart from the JPC Probe the inquiry by the CBI and action by the special courts Would be pursued and whatever Was required to be done “‘as a consequence thereof shall be done.”

The Government he said had consultations with all political Parties in the Parliament and there was consensus on the desirability of setting up a JPC. He requested Speaker Shivraj Patil to proceed with the formation of the JPC and entrust it with the task of a comprehensive enquiry which might be completed within a reasonable time.

Rao said his desire and purpose ‘was to unravel the truth and ensure the smooth transformation of a vibrant economy in the larger interest of the nation. He said ramifications of the scam have to be thoroughly probed and effective Measures taken so that the basic integrity of the financial institutions of the country was not

This is the second time that a JPC was being constituted to probe a Scandal. The first JPC headed by B. Shankaranand (now Petroleum Minister) was set up to probe into Bofors deal when late Rajiv Gandhi was the Prime Minister.

Rao said events that have unfolded in the last few months in the financial sector of the country have caused grave anxiety to him and the country at large.

His Government had been taking concrete and effective steps at very stage in the last few months as required in the circumstances.

While the inquiry by the CBI and action by special courts had been attended to the Prime Minister said he felt there was need for a comprehensive inquiry through the instrument of Parliament which not only fully established Parliamentary supremacy but also provides an effective safeguard to protect the country’s interests.

Welcoming the Prime Minister’s announcement on setting up of a Joint Parliamentary Committee Jaipal Reddy (Janata Dal) said in Rajya Sabha that it should be headed by an Opposition leader.

He said the terms of reference of the JPC should be settled between the ruling and Opposition parties.

Saying his party was prepared to cooperate with the JPC Reddy demanded that the banks should be made accountable to a Standing Committee of Parliament and also open to scrutiny by the Comptroller and Auditor General.

He and R.K.Dhawan (Congress) who spoke before him demanded that it should be made obligatory on bureaucrats and politicians to inform the Government before their relatives sought appointment in foreign banks.

Reddy said there was a big question mark on how two foreign banks the Citi Bank and the Anz Grindlays had trebled their profits within the last one or two years.

Reddy said the Government was reluctant to probe the scam scandal which he called the “dirtiest scandal in the world.”

It was only a vocal Parliament and a lent media which had forced the Government to order a CBI probe he said.

Demanding the dismissal of RBI Governor Reddy accused the Prime Minister and the Finance Minister of maintaining a criminal silence while a coterie of bureaucrat’s brokers and corporate tycoons had colluded to defraud the banks of over Rs 30 lakh crore with non-existing securities and receipts.

He said the Jankiraman report had only touched the tip of the iceberg and made no mention of over Rs six lakh crore fraud in the foreign banks. Asking whether it was “banking or buccaneering” he said the small investors had been robbed of over Rs 75000 crore of their hard earned savings

Murli Manohar Joshi (BJP) in his maiden speech in the Parliament said what had been revealed in the preliminary report of the Janakiraman Committee “is just a tip of an iceberg showing only one-tenth of what had actually occurred.”

The BJP leader said that four foreign banks the Citi Bank of America Bank of Tokyo Standard and Chartered Bank and the ANZ Grind lays Bank were involved in the securities scam and had made as much as Rs 3000 crore as “brokerage” from the deal.

He further said that nearly 30% of this business had been covered by the Citi Bank of America.

He wanted to know whether these banks had got information beforehand about the new liberalization policy which had been announced by the Finance Minister in his 1992-93 Budget

Dr.Joshi wanted to know whether it was a fact that as per the published reports the beneficiaries of the securities scam had invested their money in a number of charitable trusts including the Rajiv Gandhi Foundation

This led to loud protests from the Congress members.

The BJP leader said the Finance Minister had tried to hide rather than to reveal anything new in his recent statement.

Quoting copiously from the Janakiraman Committee report he asked how it was that the foreign banks had been allowed to trade in the UTI (Unit Trust of India) units. He said the RBI had not performed its duty to check on banking irregularities especially in its wholly-owned National Housing bank subsidiary. R.K.Dhawan opposed the call for resignation of the Finance Minister saying the Government had taken prompt action.

Article extracted from this publication >> July 24, 1992