Is a committed CIC now order in Reliance insider trading case


The appointment of the present Chief Information Commissioner by selecting the senior most Information Commissioner in a selection process in which all the Information Commissioners were applicants confirms the suspicion that the country is moving towards an era of a committed Central Information Commission (CIC), loyal to the government. This selection process has a far reaching consequences for a government accused of being a government of crony capitalists.

This government has a vested interest in weakening institutions like CIC to conform to the Gujarat model of government. By delayed appointment of Chief Commissioner and three Information Commissioners, the government has already created a pendency of over 40,000 cases which means that an appeal to the CIC has a waiting period of over three years. Information which was to be provided for Rs 10 in a period of thirty days will now take almost four years. This is because all meaningful information involving corruption and crony capitalism invariably have to be appealed to the CIC as the information is not available due to an uncooperative bureaucracy.

The CIC is already packed with ex-bureaucrats who are easily persuaded by government’s arguments and even disregard the precedents of the higher courts. Appeal to the CIC involves three years wait. If the CIC too is compromised because its members are in conflict of interest of having to apply to the government become the Chief Information Commissioner, then the decisions of the CIC will have to be appealed to the High Court. Ninty-nine percent of RTI applicants, who are denied information by the CIC arbitrarily, do not appeal to the High Court because the applicants do not have the resources of lacs of rupees and the stamina of years to appeal to the High Court. If the RTI applicant appeals to the High Court, then a minimum of three years of time is taken by the High Court but if the Government agency or the Corporate appeals against an order of the CIC in favour of the RTI Applicant then stay is granted immediately and then the case is not taken up for years. The same can be verified from data on SEBI, UTI AMC and RIL.

This six year wait renders the RTI meaningless and is a triumph for a government perceived as being one of crony capitalists.

The title of being a crony capitalist government is as bad if not worse than a corruption ridden government. The difference between the two is that in crony capitalism you are perceived as being corrupt irrespective of whether you are actually corrupt. That is why the suit boot Sarkar accusation from a corrupt Congress resonates with the masses.

Current Process of Selecting the CIC followed by the NDA Government

The Chief Commissioner was selected so far by elevating the senior most Information Commissioner as the Chief information Commissioner. This is a process followed by the election commission and also in the appointment of the Hon’ble Chief Justice of India. In a radical departure from the current selection process, the government decided to advertise the post and throw it open to all who could apply after meeting the laid down criteria. There were more than 200 applicants for the post. Among the applicants were all the existing Information Commissioners.

This created a huge conflict of interest among the Information Commissioners. Few Information Commissioner would like to upset the government and jeopardise their elevation prospect by passing orders which the government may not like. It also leads to an apprehension that an existing Information Commissioner may not be elevated if it does not toe the government line. This is exactly what happened in the appointment of the Chief Justice of India in the 70s when the government of the day chose to appoint the CJI by breaching the seniority principle. Four judges of the Supreme Court resigned on being superseded.

Any order by any of the Commissioners of the CIC unduly favouring the government or powers close to it, will now be attributed to this huge conflict of interest which has now manifested in the functioning of the Information Commissioners.

This allegation of the information Commissioners having a pro- establishment slant is best illustrated with a real example of an appeal involving Reliance (RIL) which was decided by a three member bench during the period when the selection of the Chief Commissioner was taking place. Unfortunately it involved the current Chief Information Commissioner who appeared to be in sympathy the applicant point of view at this stage of hearing.

The Reliance Case

Two cases, among others relating to insider trading of RIL were remanded back to the CIC for hearing by the Delhi High Court. The first related to revealing the inquiry report of SEBI on the insider trading by Reliance (RIL) etc while the second RTI application related to the revealing the names of the brokers who had done the short sales deals on the insider trading on behalf of RIL front companies.

This insider trading had taken place in November 2007 in which RIL had profited by 513 crores (as revealed in the decision of the Securities Appellate Tribunal). RIL insider trading escaped the attention of the super computers of SEBI and the stock exchanges. It came into the public domain when Amar Singh MP, agitated the matter in Parliament and went on to reveal the name of the parties involved and the amount earned by them through the print media. The inquiry was ordered one year after the insider trading had taken place. The allegation of Amar Singh were found to be true and the amount by which RIL profited was Rs 513 crores. Two compromises were offered by RIL for Rs 2 and Rs 10 crores to settle the matter of 513 crores without any admission of guilt.

While the Rs 513 crores was made by RIL in forward trading through 12 front companies who had the information in advance of the impending sale, an additional 20.5 crore shares of RPL were sold by RIL in the cash market. RIL made an additional Rs 4000 crores through actual sale of shares on delivery basis.

However, this additional Rs. 4000 crores was made by RIL on account of price manipulation wherein the price of the RPL shares sold was doubled by the brokers in a short period of two months. Hence the genuine profit without manipulation of the share price would have been only 2000 crores.

Both the manipulation of the share price and the execution of the insider trading was done by the brokers. As the shares were also traded in the speculative section of the stock market, the brokers were able to generate very large volumes which sometimes resulted in outstanding positions of over 10,00,000 crores. By manipulating the share price the brokers made at least around 1000 crores. These brokers were never investigated by either SEBI or the stock exchanges from 2007 onwards because of the heavy bribes paid by them to the concerned authorities. It was for this reason that the scam was uncovered not by the regulatory authorities but by a politician MP.

The second RTI application relating to the name of the brokers was to be decided by the full bench. Since the brokers were never investigated by SEBI (on account of bribes paid) there was no way in which the information could have been denied under any of the exceptions in section 8 (2) of the RTI Act. The information was also in public interest because the investors had been cheated by thousands of crores. In fact, the earlier the Chief Information Commissioner had ordered that the information may be made available both in public interest and also because it was not covered under any of the exceptions of the RTI Act.

Both the applications were heard at great length for almost 14 hours and the parties were asked to submit their written submission. The written submissions were filed with the commission on its direction in the month of August 2014 after the orders had been reserved on the conclusion of the hearing of the matter.

Meanwhile, the then Chief Information Commissioner Shri Rajiv Mathur retired on 22/8/2014 but as per the convention the senior most Information Commissioner Shri Vijay Sharma was not elevated as Chief Information Commissioner. Instead, the post was advertised by the DOPT in late October of 2014. All the information Commissioners applied for the post of Chief Information Commissioner. Hence there was a competition amongst the Information Commissioners to become the Chief Information Commissioner. It may be mentioned that Shri Vijay Sharma was heading the three member bench.

Order delivered after all the Commissioner had applied for the post of CIC

The order relating to the two RTI applications mentioned above was passed by the full bench on 28/11/2014 that is after more than a month of the Information Commissioners having applied for the post of the Chief Information Commissioner. As the government had not decided on the successful candidate their fate was yet to be decided by the government. Could then anyone of the Commissioners alienate the largest corporate wrongly or rightly perceived to be close to the power that had the dominant say in the appointment Chief Commissioner?

In spite of having a watertight case, it did not come as a surprise that all the three commissioners were unanimous in denying the information relating to the revealing of the names of the brokers who were involved in executing the insider trading deals for RIL and for manipulating the share price in which they had made massive money.

The information was denied at the behest of RIL who should not have been made a party in the appeal as the information did not concern RIL but was nevertheless was allowed to be made a party to the appeal for reasons best known.

The order could not be justified either on the basis of the specific provisions of the law or on the basis of precedents decided by superior court.

As these brokers had not been investigation since 2007. They had caused massive losses to the public running into thousands of crores. Public interest was overriding. There was no provision in the RTI Act by which the name of the brokers who carried out the deal for RIL could not have been divulged. In fact the earlier, Chief Information Commissioner had allowed the appeal and stated in his order that the information be made public both in public interest as well as for the reason that the information did not falling within any of the exemption clauses.

It was therefore not surprising that because the commissioners could not justify their denying the information on the name of the brokers they copied the order word for word of the other RTI application relating to the information on the inquiry report on insider trading. This cut-and-paste job was unprecedented and betrayed the fact that the commissioners had not applied their mind and had decided to favour Reliance.

Now that the process of selection has been put in the public domain, the message is loud and clear. Government discretion will be exercised in favour of those who exercise their discretion in favour of the government.

Investors lost Rs 3500 crores to RIL and its brokers on account of insider trading. The government ensured that the matter is not investigated for cheating and fraud inspite of a specific complaint lodges with every conceivable authority in the country by the author. Information on the enquiry report has is not put in the public domain and has also been denied by the CIC. Is this crony capitalism or corruption?

The matter has been appealed in the High Court of Karnataka. It is a moot point as to when it will be finally decided?

(Arun Agrawal is the author of the book Reliance: The Real Natwar. The opinions expressed by the author and those providing comments are theirs alone, and do not reflect the opinions of Canary Trap or any employee thereof)

Manipur Ambush orchestrated by the ISI?

The attack on Army convoy in Moltuk valley at Parolong in Chandel district of Manipur bordering Myanmar at 0830 hours on June 04, 2015 in which 18 personnel of 6 Dogra were martyred is being ascribed to the NSCN (K). Even the name of the insurgent leader (Starson Lamkang) who led the attack is doing rounds. Inspired leaks to the media also allude to collusion of Military Intelligence of Myanmar. These inputs are misleading and detract from the real perpetrators and their objectives. At best the NSCN (K) may have played a marginal or collusive role.

The real culprit are Islamic groups based in Manipur, particularly the Peoples United Liberation Front (PULF). The objective of the attack was to sabotage Prime Minister Narendra Modi’s visit to Bangladesh. It was therefore directed both against Modi and Sheikh Haseena. It could not have happened without the orchestration of the ISI and indulgence of proxies like Lashkar-e-Toiba (LeT).

The link between LeT and the PULF has been in evidence for some years now. The first reports with regard to this nexus emerged in December 2006 with the arrest of three Manipuris, i.e. ‘Salmaan Khurshid (23), Abdul Rahman (24), and Mohd Akbar Hussain (20) by the Delhi Police. They were carrying 20 Kg of RDX, detonators and hand-grenades. T. Khurshchev Singh of the IDSA has written a detailed article LeT finds new base in Manipur, wherein he has written about the interrogation revelations of the said militants. He maintains that these Manipuris had received extensive training in PoK. They also served liaison between LeT modules in Bangladesh and PULF. The PULF and other Islamic jihadi groups began to grow in Manipur following communal clashes between Meitei and minority Pangal in 1993. The other jihadi outfits active in Manipur are Islamic Revolutionary Front (IRF), Islamic National Front (INF), United Islamic Revolutionary Army (UIRA) and United Islamic Liberation Army (UILA).

Interrogation reports also established the links between the PULF and the Directorate General of Forces Intelligence (DGFI) of Bangladesh, and Pakistan ISI. It may be mentioned that the ISI has deep inroads in the DGFI, facilitated by the earlier Khaleda Zia dispensation. This symbiosis has been weakened to an extent under the present Awami League regime, nevertheless it endures considerably. Manir Khan, an ISI operative was arrested in West Tripura in July 2010. Another operative Shagom Ali was also picked up in the state in 2011. They disclosed that the ISI found it difficult to operate from Bangladesh when Sheikh Haseena came to power in 2008, but was back in business when her popularity began to wane since 2011, especially after the Shahbagh Square uprising, staged on the lines of Arab Spring in West Asia or Anna Agitation in India. Most PULF cadres constitute Muslim youth, recruited from the Madrasas in Manipur and sent for arms training to Pakistan via Karimganj in Bangladesh.

The PULF aims to establish an Islamic country in India’s northeast.

Most pointedly, the PULF leaders are based in Chandel district of Manipur, where the attack on the 6 Dogra convoy has taken place.

T. Khurshchev Singh, based on his learning first hand from local sources, refers to the growing phenomenon of illegal Bangladeshi migration into Manipur and the consequent extension of Pakistan based terrorist network in Manipur and Myanmar. The involvement of the Myanmar dispensation has not been authenticated and seemsunlikely in light of the fact that it is seized of Muslim fundamentalist groups like the Ommat Liberation Front (OLF), Kawthoolei Muslim Liberation Front, Muslim Liberation Organisation of Myanmar and the Rohingya insurgents. Officially, the Myanmar authorities have been reiterating that they would not permit Myanmar soil for staging terrorist activities in India. However, it cannot be denied that the Manipur based LeT and other insurgent groups are taking advantage of the testing Indo-Myanmar border and insurgency environment.

The ISI has categorically admitted to fomenting terrorism in India’s northeast and funding of Khaleda Zia’s BNP in elections. This admission was made by a former ISI Chief Asad Durrani during a Supreme Court hearing before a three Judge Bench, which included the Chief Justice Iftikhar Muhammad Chaudhary.

Khaleda Zia was held guilty for her tacit support to the Indian insurgents at the bidding of Pakistan by the Local Govt Minister Syed Ashraful Alam when in 2010 he said that Musharraf during his visit to Bangladesh had a meeting with ULFA leader Anup Chetia for 90 minutes.

Further a very senior official of the Intelligence Bureau of India accused the CIA and ISI of instigating insurgency in the northeast. He said: “The ISI-CIA combination, active in the region, is fomenting insurgency to destabilize the region”. This author recently warned a Bangladesh Minister of Western country trying to use the Jama’at ul Mujahideen Bangladesh (JMB) as leverage against Sheikh Haseena to browbeat her into providing base facilities in and around Chittagong. The same JMB is being used to leverage the West Bengal government as evidenced by the Burdwan blast.

Again in December 2007, one ISI operative SM Alam alias Mujibullah Alam alias Asfi Alam was arrested in India. He was a member of JeI and Chatra Shivir of Bangladesh and had joined Harkat-ul-Mujahideen in 1993. He was recruited by the ISI, underwent training in PoK in 2000, and shifted his base to Northeast in 2006.

Intelligence reports also suggest the formation of a ‘Strategic United Front’ by ISI and China to bring together militants outfits in Northeast and J&K. This explains the Bhindranwale poster in Jammu by the residual Khalistanis at the behest of the ISI in concert with the LeT sponsored attack on 6 Dogra convoy. The wikipedia maintains that the ISI spends around Rs. 24 million in order to fund insurgency and terrorism in J&K. This money, as is well known, is divided between the mainstream parties in the Valley, the separatists, and some amount goes towards keeping Khalistan Movement alive.

The president of All Tripura Tiger Force (ATTF), Ranjit Debbarma was arrested on 14-February-2015 before the elections in Tripura. He revealed that there were 19 insurgent camps in Chhittagong Hills. He further revealed: “ISI’s current strategy is to keep Northeast on perennial boil”. As per interrogation reports, and intelligence sources, the militants receive strategic guidance from the ISI in its bid to bolster its terrorist activities and propaganda campaign to destabilize India.

The biggest concern for the Indian security establishment is the ISI joining hands with the Chinese agencies in the Northeast. Reportedly these agencies have been supplying weapons and equipment to militant groups not directly but through the ISI. Some recent reports have revealed about supply of 3,000 radio controlled explosive devices to the ULFA by the said China-ISI channel.

The other pressing concern, as mentioned earlier is the formation of common force comprising Northeast insurgents and the Maoists at the behest of the ISI and China. The DGP of Assam, Khagen Sarma spoke about the efforts by ULFA faction leader Paresh Baruah (reportedly now in Yunan province of China) of trying to establish partnership with the Maoists. In fact, Mr Sarma, considers the Maoists more dangerous than the insurgents of northeast. Mr Sarma said in an interview: “Paresh Baruah is bringing Northeast militants together. He has invited them and the Maoists for a meeting next week – outside support like that of ISI is also there… The Kamatapur Liberation Organisation active in Assam and West Bengal as well as the anti-talk NDFB (Songbijit) group were also invited by Baruah for the meeting…”. He further spoke about the ISI links with the Maoists. He said: “Maoists are biggest threat. They have 100 trained cadres in the state and many supporters.”

It has also been reported that Aditya Bora, ULFA chieftain and now the Maoist leader in Assam, exerted profusely to bring the Maoists closer to ULFA. He was arrested from the Maoist stronghold in Saranda forest in Jharkhand in 2010. Maoists are also receiving training in guerrilla warfare at Camp Hebrun run by NSCN (IM). The Maoists are known to exercise total sway over the labour community in the Tea gardens.

As per Ministry of Home Affairs report of 2013, there are 65 terror outfits operating in India. Of these 34 were active in Manipur. It may be underscored that most of these groups active in Manipur have ultra-leftist orientations and some of them have deep nexus with the Maoists in the hinterland. Manipur insurgents are not only conduit for weapon supply to the Maoists but also provide training to them in jungles of Jharkhand, Odisha and Chhattisgarh. The Maoists have not only established themselves in Assam but Arunachal Pradesh as well. Two groups from Manipur, i.e. the North East Revolution People’s Front and the People’s Liberation Army (PLA), have forged strong links with the Maoists.

The Northeast has therefore become a volatile mix of jihadi outfits, Maoists, insurgents, the ISI and Chinese agencies. They are all feeding into each other. Bangladesh continues to serve as a base for anti-India activities by the ISI in the northeast just as Sri Lanka served as a base for terrorist operations in South India. Tapping into this volatility are Western funded NGOs, who are serving vested economic interests to cripple India’s Tea industry as well as mining industry, which includes Uranium deposits in Meghalaya. The high quality Uranium deposits in the state by some estimates have the potential to obviate our dependence on Nuclear Supplier Group (NSG). In 2013, the Dutch government funded NGO CORDAID organized training of activists in Shillong. The training included GPS tracking to map oil wells, mines, dams, forests and habitation for an updated GIS platform on extractives in the region. As per a Times of India report: “The trainers at the session, two Dutch and an American, constantly reminded the participants that oil reserves in the northeast were as large as those in the entire Gulf region and that the precious resources must be preserved by the local tribal for their own use. They alleged that the government of India was, in collaboration with MNCs, ‘stealing the resources of the region and refusing to remove the Armed Forces Special Powers Act, or AFSPA, (from Manipur) as it needed Indian Army to extract those resources’.”

All the vested interests therefore have added to the volatility of the Northeast. The ISI is probably having a field day in this vitiated environment. Given this prevailing flux and abysmal security discourse, it was not difficult for the ambush to be sprung on the Army convoy. Zia-ul-Haq had embarked on the policy of K2, i.e. Kashmir and Khalistan against India, and now there is the added dimension of Northeast. Sadly, apart from ISI, elements in Bangladesh and China, there are enough collaborators within. All these collaborators wanted to sabotage or at least sully Modi’s visit to Bangladesh. The target was Sheikh Haseena as well because she has shown unrelenting conviction in taking on the jihadis in Bangladesh.

Pakistan watchers may have noticed that in the last three weeks there have been series of deadly terrorist attacks in the country, targets being mostly Shias and the MQM. Karachi is burning and the Pak Army is handling affairs. Then there is the Zarb-e-Ajb operations being conducted in FATA. So the terrorism in Pakistan is essentially a recoil of years of jihadi discourse. Yet, to delude its people the Army Chief after Corps Commander Conference blamed the R&AW for terrorist attacks within the country. Nawaz Sharif echoed the same after a meeting in ISI headquarters. It may be recalled that Modi’s swearing in ceremony, wherein Nawaz Sharif was a guest was greeted with an attack on Indian consulate at Herat, orchestrated by the ISI. The plan was to take the Counsel General hostage.

This time too, the massive geopolitical and strategic shift scripted by Modi and Shieikh Haseena was like pulling the rug from under the feet of Pakistan, therefore the attack in Manipur. More such attacks in Northeast may be expected.

(RSN Singh is a former military intelligence officer who later served in the Research & Analysis Wing. The author of two books: Asian Strategic and Military Perspective and Military Factor in Pakistan, he is also a Guest Blogger with Canary Trap. The opinions expressed by the author and those providing comments are theirs alone, and do not reflect the opinions of Canary Trap or any employee thereof)