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Scrutiny
  
Strange case of Naresh Chandra
Naresh Chandra continues to perform a key role within the Indian government and also retains a position in several company boards. Bureaucrats like him should be compelled to make a choice
08/12/2011

Many a time, there have been reports of high level bureaucrats working with private companies during their service with the government. Surprisingly, the Government of India still doesn’t deem it worth a more detailed investigation. Consider the case of Naresh Chandra, a high level bureaucrat, former IAS officer and a senior adviser to the Prime Minister of India, who also served as the country’s Home Secretary, Cabinet Secretary to the Government of India and the Indian Ambassador to the US. The man who was awarded with India’s second highest civilian award, the ‘Padma Vibhushan’, for his public service, is connected to as many as 109 board members in 16 different organisations across 17 different industries, and is earning a total compensation of $817,305 annually at the age of 76, according to Bloomberg Businessweek. Aren’t these serious conflicts of interest? That’s not all, while he is currently heading a task force created after the 26/11 tragedy to review national security; BAE Systems, a British multinational defence, security and aerospace company headquartered in London, which wants to expand its business in India, has ‘coincidentally’ created a heavyweight advisory board including Chandra as an advisor. He is the person who chaired the CII Task Force on Corporate Governance and is also a non-executive advisory board member of the world’s leading liquor company Diageo. The company has set up a powerful advisory council to strengthen its presence in India consisting of Naresh Chandra. It’s the same company, which was convicted by the US Security and Exchange Commission for paying a whopping amount of $1.7 million as bribe to various Indian government officials between 2003 and 2009, which finally yielded $11 million in profits to the firm. Diageo’s largesse has been particularly directed at officials of the Canteen Stores Department (CSD) that comes under the Ministry of Defence, which makes the connection all the more intriguing. The American government also fined Pioneer Friction Limited (Pioneer), an Indian subsidiary of Diageo and its employees and agents, who bribed officials of the Indian Railway Board. But strangely, the Indian government was mum on the matter; despite an official communiqué from the then Indian Ambassador to the US Meera Shankar to TKA Nair (then principal secretary to the Prime Minister), urging him to take action on the issue. Naresh Chandra is also on the advisory board of PricewaterhouseCoopers (PwC) India, an independent auditing company, which came under the scanner for being the auditor of the scam-tainted Satyam. He has served and is also serving as non-executive independent director and member of audit committees in a number of private firms including Bajaj Auto Ltd., Hindustan Motors Ltd., ACC Limited, Vedanta Resources Plc, Tata Consultancy Services Limited, Gammon Infrastructure Projects Limited, Eros International Plc and Cairn India Ltd. These are just a few of the private companies he is associated with. Isn’t it surprising that a public servant who is holding sensitive bureaucratic roles is also holding such important positions in related industries, where companies are can take unfair advantage?

Surprisingly, Chandra is not an isolated case. A number of high profile bureaucrats are allegedly making a fortune from their current/past presence in the bureaucracy/ministry and affiliation with regulators and policy makers. V. K. Shunglu, who is now serving PwC, had served as the comptroller and auditor general of India, the apex body having sole constitutional rights to audit independently. The same goes with B. B. Tandon, once chief election commissioner, secretary of the Ministry of Mines and the Ministry of Personnel, additional secretary of the Ministry of Corporate Affairs and also a member of the SEBI board. He is now on the advisory board of PwC.
Pradip Baijal, former Chairman, Telecom Regulatory Authority of India (TRAI) set up Noesis Strategic Consulting Company post his retirement for providing ‘advisory’ services. Ex-Indian Oil Chief M. S. Ramachandran is now chairman of Cals Refineries. R. V. Shahi, a former bureaucrat, is now chairman of total power solutions firm Energo. S. K. Roongta, former Chairman, Steel Authority of India Ltd., joined as MD of Vedanta Aluminium in April this year. These are crying examples of bureaucrats and PSU heads who are getting themselves into such positions where private companies can use them for unfair advantage. In fact, dozens of ex-bureaucrats and PSU executives become lobbyists and advisors in India. Similar is the case in the US too – as per estimates, around 43% of ex-Congressmen since 1998 are registered lobbyists. President Barack Obama tried to reduce the influence of ex-Congressmen on the Senate, a phenomenon called ‘revolving door’ – but was strongly contradicted by bellicose donors of the Democrats. He was worried about ex-Congressmen; while in India, people like Naresh Chandra don both hats with aplomb!

The government needs to monitor existing and previous bureaucrats with affiliations outside and take action. In the case of Naresh Chandra, he should not be in a position where there is a conflict of interest between his roles in private and public domains. He should take a cue from Nandan Nilekani, who ensured that he gave up his position at Infosys before taking over UID. It always pays for the greater good to lead by example.

By:- Akram Hoque
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