It is understandable that MPs should often depend on newspaper reports for information. They do not possess independent sources which can collect and investigate facts for them. But it is rather surprising that so serious -minded a member as Mr. Madhu Dandavate should charge the finance minister with having misled the House on the question of non-resident Indian investment in Reliance Textiles without even reading carefully the published material on which he is apparently relying. There is doubtless scope for confusion. But a careful reader should not have much difficulty in detecting it and the least that is expected of a seasoned Parliamentarian is that he would read the material carefully.
It may be pertinent to recall that the Union government policy regarding investment in Indian companies by non-resident Indians has come in for a great deal of criticism on account of Mr. Swraj Paul’s alleged bid to take over Escorts and Delhi Cloth Mills. One feature of the policy – the right of companies with at least 60 per cent non-resident Indian interest to invest in Indian firms – has been the special target of attack on the ground that it can be exploited by outsiders to acquire control over key sectors of the Indian economy. But the policy as approved by Parliament stands. And even if it had been modified as demanded by its critics, the modification could not possibly have been made retrospective. Thus the issue is not the policy but specific investments in Reliance Textiles.
As has been reported in this newspaper as in others, between April 1982 and May 2, 1983, 11 companies registered in the United Kingdom sought and secured the permission of the Reserve Bank of India to invest over Rs. 22 crores in Reliance. On July 26, the finance minister, Mr. Pranab Mukherjee, disclosed the names of these companies to Parliament in answer to a question. In retrospect it can be argued that Mr. Mukherjee should have put it on record that the investing companies were registered in the Isle of Man which is a tax haven. But the Isle of Man is part of the United Kingdom. As such it cannot be argued that the finance minister misled the House even unwittingly. More relevantly, intriguing developments followed his statement. A firm of chartered accountants in London sought permission on July 27 to register eight new companies with names more or less identical with those which had invested in Reliance. The London firm was clearly acting on behalf of some client, most probably an Indian client. Who was that individual or firm? On the face of it, the purpose was to create some confusion and malign Reliance and Mr. Mukherjee. As it happened, soon after the registration, a report appeared in a Calcutta daily (September 16) to the effect that the companies registered in London denied having invested in Reliance. The report was accurate in the sense that the newly registered companies had in fact not made the investments at issue. Indeed, they could not have. For they did not exist when the investments were made. But the report was irrelevant. The same irrelevant story has been repeated more recently thrice, attracting the attention, among others, of Mr. Madhu Dandavate.