Tuesday 16 September 2014
 
»
 
»
Story

Birla case sparks fear among Indian businessmen

New Delhi, October 20, 2013

India's top business groups have warned of an "atmosphere of fear" enveloping corporate circles and bureaucrats that could hurt economic recovery after police accused a leading industrialist of corruption.
 
The Central Bureau of Investigation (CBI) earlier in the week filed a case accusing Kumar Mangalam Birla, chairman of conglomerate Aditya Birla Group and one of India's most respected business names, of conspiring to obtain a coal block for a cut-rate price eight years ago.
 
"Reputations of institutions and individuals take years to build," Kris Gopalakrishnan, president of the Confederation of Indian Industry, said.
 
"Extreme caution needs to be exercised before any action is taken which jeopardises reputations," he said, adding, "creation of an atmosphere of fear is not desirable."
 
The case against Birla, viewed in the corporate world as a by-the-rules player, sent shock waves through the business community.
 
The corporate alarm comes as the economy has slumped, growing by 4.4 per cent in the last quarter - half the nearly double-digit rates seen in the last decade.
 
Birla, 46, joins a string of senior business figures and civil servants being probed over various graft scandals that have rocked the Congress-led government and forced several ministers' exits.
 
The billionaire was accused of conspiracy along with the former coal secretary, PC Parakh, over a scandal in which the national auditor accused the government of underpricing coalfields and giving away billions of dollars in windfall gains to firms. Both men have denied any wrongdoing.
 
The series of scandals have cast a shadow over the government's re-election hopes in polls due by May.
 
The president of the Federation of Indian Chambers of Commerce and Industry Naina Lal Kidwai called the accusations against "industry icons" and bureaucrats "unfortunate".
 
"Capable and highly regarded officers and business leaders cannot be made scapegoats of mere suspicion and misconstrued actions," she said.
 
Officials have said they are worried about taking decisions for fear of facing accusations of wrongdoing later.
 
Senior civil servants met Friday to discuss ways they can be "protected for bona fide decisions" taken in the "line of duty". Business people have said they are hesitant to bid for contracts in case the transaction is questioned later and they face legal action. 
 
Oil Minister M Veerappa Moily also expressed his unease. "India cannot become just like Russia where investors are not prepared to go and billionaires are put behind the bars," he said.-Reuters



Tags: India | Birla |

More INTERNATIONAL NEWS Stories

calendarCalendar of Events

Ads