SBI was supposed to file detention orders on Monday. Vijay Mallya escaped the country on Saturday and rejected all summons. ED & CBI raids are going on against Karthi Chidambaram. He scooted away out of the country while the raids were going on. These are but names. There are many such – some relative of Adani, the one who bought Peerless(he was caught fleeing, relieveingly), Lalit Modi and many such.
There are a few serious issues regarding this.
1. How did they get the opportunity to run away from the country?
2. Why are the charges that strong enough for them to have a second thought before committing the escape act?
Let’s forget why they turned as economic offenders – whoever may be responsible for the situation to turn such, the bottomline is that they are guilty by absconding.
There are two aspects for this – prevention and containment.
Economic offences are a consequence of auditing – in the case of Ramalinga Raju, someone didn’t notice the transfer of money to Maytas. In the case of Vijay Mallya, someone didn’t bother to look at the loan repayment potential of the business.
The first act is to set up something like CAG which audits the books of every entity having a total value of, say, more than 1000 crores. The auditor should also be responsible if the books are cooked up and things go kaput.
Next is to set up a ten point scale, the outcome of which tells whether a loan should be given or not. Let it have a 1000 parameters and let it take a month to fill all the parameters, but the outcome should be binding. It should cover everything from loan amount to the health of business to domestic/global health of the field to number of employees to annual turnover to everything. If the number is above 7, loan should be given. If it is between 5 and 7, loan will be given against a collateral, unrelated to the business in question. If it is between 3 and 5, government intervenes and if it is less than 3, no loan should be given. There should be an annual review of the formula involved to keep it updated. By attempting to standardize the loan issue potential, we can, to a maximum extent, nullify the effect of issuing loans to caustic entities.
Coming to absconders. What exactly can we do? First thing is, if you are planning to initiate proceedings, the first act is to block the passport and put it on a watch list.
If he has already escaped the country, issue him, say, three summons to turn back. He doesn’t heed. First block his passport. Then seize all the property in India, both movable and immovable. And that includes all his shares in a joint venture. If need be, give a permission to all foreign governments to seize his assets in their territories. This will deincentivize them from granting the person asylum. Give him one year to stand trial in lieu of getting the title for his Indian properties back. And if he is capable enough, let him fight his case with foreign governments – India won’t involve. Else, there will no turning back – the assets will become the property of government of India with no scope for judicial recourse.
Is this extreme? Is this a good deterrent? Well, I won’t hazard a guess. But, I will tell one thing. The bill we are going to get is going to be insipid because the father of one such offender who has escaped is going to lobby with opposition to dilute it as much as possible.

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