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L’affaire Vadra was waiting to explode

October 8, 2012

The recent issue of Robert Vadra seems like it was inevitable.  It was like the stage was set, once the atmosphere was right, and the time auspicious, a button would be pressed throwing Rocket Robert in orbit.

While the business activities of Vadra are undoubtedly questionably, but even more suspicious is the nature of his activities. Today’s article in ‘The Hindu’ says there are a maze of questions on Vadra’s business activities. But a far more significant question that people aren’t asking is ‘why is Vadra in this sort of a business?’ Especially when there were alternative proven ‘business models’ that Vadra could employ.

There have been several media reports on Sonia Gandhi’s net worth being estimated at $2-19 Billion. Nobody in the Indian media attempted to investigate this matter, neither did Sonia & Co. try to defend. The reason for this is that there are absolutely no leads. Everything starts and ends with ‘Swiss Banks’. It is well documented that the likes of proven crooks like Ottavio Quattrochi were regulars at Smt. Sonia Gandhi’s residence. Scams like Bofors involving Quattrochi were also proven at international forums, yet the buck couldn’t be traced back to the Gandhis.  They were very likely, the real power behind Quattrochi and Quattrochi understands that he is nothing without their backing.  If the Gandhis pulled the plug, Quattrochi could kiss his freedom goodbye and would be forced to cool his heels in prison. Sonia needs someone like Mr.Q to manage her benami black money stashed overseas. This incestuous pact keeps them both going. Sonia is one of the richest and most powerful women in the world and Quattrochi must be rolling in luxury.

As a result Sonia has power without responsibility and as her recent foreign travels prove, is awash with cash despite a negligible legal net worth. Her official asset declaration is between Rs. 90 lakhs – 1.2 Crore. She does not own any property of her own. Even Rahul Gandhi has only an inherited a farm house in Gurgaon. Despite having an ‘aam aadmi’ balance sheet, how has Sonia tilted the balance of power towards herself with no known money or muscle power? Perhaps the answer lies in the international reports of her wealth. It is unlikely that either the above question or the answer to it will be found in India.

Why didn’t Vadra also adopt this time tested model? It has proven to be successful despite the Bofors scam being uncovered. Wasn’t this the safe and obvious choice? Why did Vadra go into property acquisition and a company opening spree? Especially, when the family whose shadow he is living under had no such interests in Indian realty or business? Don’t they share a set of family friends and advisors? Why did Vadra decide to take this route, or was he led up a garden path?

For arguments’ sake, let us assume that Robert Vadra wanted to cash in on the the India growth story. The Vadra family ran a business in Moradabad and it is plausible that Robert wanted to ‘make it large’ after moving to Delhi. It should have been simple enough, one would think. There is a ready model for this as well, in case Vadra wasn’t greatly enthused by his in-laws’ model of outlawing their wealth to foreign bank accounts.

There are umpteen examples of the gen-next from political families being very successful business people. The Sun Network is a case in point. While Sun might have benefited from the fact that its founders were the sons of ex-Union Commerce Minister Murasoli Maran and grand nephews of DMK patriarch Karunanidhi. Their political parentage would have benefited them immensely no doubt, but their businesses are successful ones. Today, their money comes from the consumer, and the share price is market driven. There will be ‘opportunities’ like the 2-G scam to make the extra buck, but it is the “extra” buck.  They aren’t directly dependent on anyone’s  largesse (government or otherwise) and DMK being out of power can only marginally alter their business fortunes. The Sun Group is a legitimate business house and Marans are worth billions, and that too in white money.

There are more such examples – the low profile VG Siddhartha (SM Krishna’ son-in-law) owns Cafe Coffee Day, MindTree and a host of other ventures. Then we have Jagan Reddy who cunningly transformed much of his ill-gotten wealth into real companies. He even managed to sell Bharathi Cements (built on political patronage of granting limestone reserves and water) to a French  company.

All things being equal, Indians prefer to do business with those who are ‘connected’ – for who knows when it may come in handy. Most political families benefit from this attitude of their business partners. Thus, building a network of handicraft stores across India or managing luxury hotels or running an airline should have been a cakewalk for Vadra. It would have been the legal and honorable path to prosperity – grow, professionalise, go public and get rich. That Vadra didn’t take this route is most baffling.

Being a member of India’s most powerful family, it is but obvious that he will be subjected to great scrutiny. Which ‘strategic analyst’ advised Vadra to open a series of shell companies with zero employees and no real business activities apart from accepting interest free loans and purchasing under-priced real estate? Whats more, Vadra boldly declared this to the Registrar of Companies, effectively making this information public. It doesn’t take a Sherlock Holmes to figure out that it has all the makings of a scam and Vadra is a sitting duck. How could a family that routinely specializes in fooling hundreds of millions make such an elementary mistake?

During the recent UP elections, Vadra had announced that he was ready to join politics, if people want him to. A rebuttal and snub came quickly from Priyanka, who clarified that Robert was happy as a successful businessman and would not be entering politics. This statement probably ended Vadra’s chances in the Congress.  The events of the recent past have effectively dashed any hopes Vadra achieving any more ‘success’ in business too.

It is time for people to stop looking for loopholes and connect the dots in the Vadra story.

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