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‘The most noise usually comes from the people who have the most to hide’

In this Walk the Talk on NDTV 24x7 with The Indian Express Editor-in-Chief <i>Shekhar Gupta</i>,Tata Group Chairman <i>Ratan Tata <i>breaks his silence on the 2G spectrum scandal and the Niira Radia tapes.

Written by Shekhar Gupta |
November 28, 2010 10:46:20 pm

Shekhar Gupta: Hello and welcome to Walk The Talk. I am Shekhar Gupta,at Taj Wellington Mews in Bombay,and my guest today,Ratan Tata,in very unusual times on a very special day. There is a candle lit right behind you because this is the second anniversary of the terrorist attack. I understand your reluctance to walk in the corridors of the Taj today,it’s all very fresh and raw…

Ratan Tata: Thank you for honouring that wish. Thank you very much for having this session today,it’s always an honour,it’s always a pleasure to be with you.

Shekhar Gupta: I also said unusual times,you know why. Because there is a certain murkiness in the air right now,particularly when it comes to government-business interface…

Ratan Tata: Yes,it is a murky time,you are right. It’s a confusing time for me because just a couple of weeks ago,we were sitting sort of… on top of a summit or a mountaintop with President Obama showering praise on what we had done,talking about maturity,talking of our having emerged,and not being an emerging force… and then we have somewhat slipped into a morass of a series of allegations… unauthorised tapes flooding… the media going crazy on alleging,convicting,executing… literally character assassination. In fact the whole thing in so doing — there has been a smokescreen behind what is really the so-called scam — which really is out-of-turn allocation of spectrum,hoarding of spectrum by important players for free… and things of this nature. So I think these are bad times. I wish the government would take a stand,bring an auditor… have an investigation and book people who are guilty of something,but stop this sort of banana republic kind of attack on whoever one chooses to attack on a basis unsubstantiated even before the person has what I consider every Indian’s right — namely to be considered innocent until found guilty in a court of law,not on the street,not in this way…

Shekhar Gupta: So what is it about this murkiness that particularly worries you — you know,we’ve had a minister go in the past three weeks since Obama left,we’ve had a chief minister go,we’ve had a very senior Member of Parliament from the ruling party give up his position in the party,Suresh Kalmadi,we’ve had these tapes come out,and now we have this new scandal that CBI is raiding bankers and housing finance companies. I mean,the country just looks like a mess,the economy looks like a mess…

Ratan Tata: You know it’s a funny thing,you get into a stage where many of these things I believe have been sourced by vested interests who… have the connections to make these things happen… what such people forget is that there is a bigger issue of the nation and very often this kind of rumour-based or whisper-based… out of court,kangaroo-court kind of issue is the outcome of persons wanting to settle scores,wanting to protect their own vested interests… we have a venerable judiciary system,we should I think as every Indian want to protect it and ensure that it.. itself stands above any kind of act of corruption or interference,because this is a very valuable asset that our country and our democracy has — and it should not be bypassed,sidestepped,preempted.

Shekhar Gupta: Do you see some of that happening?

Ratan Tata: I think what’s happened over the last few days,is all outside the judiciary basically,and I think the government and the judiciary should come down hard and say that the proper place for consideration of wrongdoing is the court,or an enforcement agency — whatever it is that has the right to investigate and prosecute. I am afraid the media does not,and it cannot… in an uncontrolled way. The media can break a story,that’s what it is there for,it can be the conscience keeper,but it also has a responsibility. Millions of people in India and elsewhere believe what they read in the newspaper or see on television is the truth — and I think that’s a responsibility every mediaperson has,and he or she needs to remember that it is a very important responsibility,because they are the opinionmakers of any nation.

Shekhar Gupta: But Ratan,at the same time,the government has the power to tap somebody’s phone,and that power has to be exercised with a great deal of caution — the Supreme Court has set down the law very strictly. Shouldn’t there also be responsibility to protect people’s privacy,even if they are involved in criminality? They can only use that information specifically in case of prosecution.

Ratan Tata: I totally agree,government also has a responsibility; the agencies also have a responsibility. They have been given a special right to be able to invade people’s privacy for national security or for enforcement of law,whatever it may be. So they can do so. That additional power is a very special power which has to be exercised with a sense of responsibility. The content needs to be held for prosecution purposes and not to be misused,and certainly not to go out to have a field day with. There doesn’t seem to be prosecution on one end and there doesn’t seem to be confidentiality on the other. Perhaps as things will emerge,not even knowledge of how it was disseminated,nor admission of even having conducted such telephone tapping. So we are going to be in a dead man’s zone on this,which I think is unfortunate. Here I just want to put what you have said quite rightly in juxtaposition to feeling I have as an Indian,perhaps a law-abiding Indian,I wouldn’t even try to work my way out of a speeding ticket. We have all to be proud of what we have done in India ,we have got to be proud of our prime minister,we have got to be proud of the success we have. It’s terrible if we as a nation destroy ourselves and whoever is doing this kind of thing needs to consider themselves not a hero of the nation but in fact as one of the villains who would bring down this nation after the good that is being done.

Shekhar Gupta: But that’s very serious,do you see the danger of that? Do you see where the murkiness can lead to…

Ratan Tata: I think if it’s not controlled,I think yes. I used the word ‘banana republic’,I didn’t use it lightly.

Shekhar Gupta: I was coming to that,because that is a very serious expression.

Ratan Tata: Banana republics are run on cronyism. People of great power wield great power,people of lesser power or people who have fallen out of power go to jail without adequate evidence or their bodies are found in the trunks of cars. The danger is that you could degenerate into that kind of atmosphere unless the necessary parts of government play their role in upholding the law and fine,let no one be above the law.

Shekhar Gupta: Do you see a lot of crony capitalism,since you used that expression?

Ratan Tata: Yes,I see the evidence of it. I am not in a position to say a lot of it,but the evidence of it…

Shekhar Gupta: Would you say some of it?

Ratan Tata: Yes.

Shekhar Gupta: Will you describe some of the evidence that you have seen?

Ratan Tata: You know,you see large contracts being awarded,you see conditions of contract become a little vague,implemented funnily,you see eligibility of capability being abused… You know,very often I wondered,there are some countries for example where favouritism doesn’t apply,but you actually pay in to the government if you get a contract. But the nice thing about those countries is that you get the best contractor,or you get the best… It becomes like a tax — like an open tax— so you pay in not to individuals,but you pay in to an agency… I am not condoning that,but I am saying that is one form… Here,you often… who pays the cost of giving something to a person with less capability? The customer pays,the consumer pays. We get something that takes five years more to finish than it should,costs five times more to complete than it should. So this is not the time that we should do this,this is the time that we should build our nation on the basis of meritocracy.

Shekhar Gupta: How do you manage,does the group of Tatas manage in this environment?

Ratan Tata: Well,we have endeavoured to uphold a value system that has been part of our tradition,and we’ve been disadvantaged repeatedly in that we have lost projects,projects have been delayed… We have ingratiated ourselves in certain cases with some politicians,but we have stayed that course…

Shekhar Gupta: You have ingratiated or you have annoyed them?

Ratan Tata: Annoyed them,sorry.

Shekhar Gupta: Editing correction,sorry.

Ratan Tata: I am glad you did that,sorry… And in that sense,we would like to keep the Group ferociously protecting this one asset.

Shekhar Gupta: Do you sometimes pay if you have to pay?

Ratan Tata: We have never done so. Never.

Shekhar Gupta: Be it on the tariff cards… as you say in countries where they charge it almost like a surcharge.

Ratan Tata: We have actually never operated in those countries… I myself have introspected on what happens here. It’s a little fuzzy — what happens here leads you to believe that there’s an undercurrent that’s subjective — against what you see in some countries where it is out in the open,and while I don’t as I said earlier,condone that,at least I see that the country gets the best that there is for that particular…

Shekhar Gupta: That’s less worse than this. I understand some of our chief ministers have started doing that now. They have opened bidding but whoever wins knows that a certain part of it has to be contributed some place.

Ratan Tata: Well,that’s again,that’s off the table… whereas what I was talking about is that it’s in the invoice,it’s out in the open.

Shekhar Gupta: Oh,it’s that transparent. But to come back to the banana republic,would you say this to the prime minister,who as you said,you respect?… Would you say to the prime minister that our country is in danger of becoming a banana republic or…

Ratan Tata: I think that if what has happened in the last few weeks is an indication of what can happen at any time,then we are going down the route that would lead us into a banana republic. I would have no hesitation in telling the prime minister that because I don’t believe the prime minister is contributing to this,I think he should be concerned about the nation going in this direction.

Shekhar Gupta: And he is a good man.

Ratan Tata: And he is a tremendously good man,we’re very lucky to have a prime minister like him. I want to say that I think it has hurt me to see what he has gone through in the past weeks — the pressure and the innuendos,the pressures that he has been going through to resign and so on,he is one person who is truly above the allegations that have been thrown at him,a person who we are very lucky to have because it is his face that has been the face of a transforming India. And it is this person who has commanded the respect of leaders in major countries. He doesn’t deserve to have this kind of…

Shekhar Gupta: And the Gandhi family has invested a lot of capital building his image and sustaining it.

Ratan Tata: Yeah,yes. And I was very pleased to see Mrs Sonia Gandhi supporting him the other day publicly,because he doesn’t deserve this kind of pressure in Parliament. Here again I think there’s a responsibility of parliamentarians to transact,to govern their country,not to adjourn Parliament every day to meet some…

Shekhar Gupta: Ratan,everyone knows you in the world of business,in the world of finance,do you feel some of the investors,some foreigners,are beginning to get worried,to get wary of India right now?

Ratan Tata: I think this has just happened,so,truthfully,I have no knowledge. But I have a feeling it’ll be on everybody’s lips I imagine,the next time I go overseas,which is going to be in a couple of days… People are going to ask me what is all this about,there is this scam,there is that scam,people who are now on the Internet are well-informed about India,will think of India as a scandal-riddled country,which it is not,and you can easily make it that way,you can make everybody’s mindset operate from one scandal to the other. You can make that… unfortunately,the fodder the media needs to sell publications or to attract viewing on television. And my experience has been,not in the media but elsewhere,that the most noise usually comes from the people who have the most to hide… So we should not fall into the trap of becoming a nation that is destroying itself by making everything into a scam.

Shekhar Gupta: Are you saying that this is a kind of self-flagellation?

Ratan Tata: Well,it leads to… smokescreens.. We should in fact be..

Shekhar Gupta: The thieves get away behind the screen,and everyone else looks like a thief.

Ratan Tata: That’s right,that’s right.

Shekhar Gupta: Have you seen any increasing unpredictability in government policy or governance in India… again from the point of view of the investor?

Ratan Tata: Yes,I think so. Again,I have always felt and said this openly,that what’s behind it is not government policy,what’s behind it is usually a vested interest spurring government policy. I think the FDI limits in a whole series of areas,some of them promised by the government,have not been done — insurance is one main example,retail is another area,probably the banks are a third,these are things that the free world has come to accept as (SG: as a given)… India is a nation that everyone is looking at today,people want to invest,and it is not unusual for a foreign investor to now say,‘When do you think the FDI limits on this will change?’ and you can’t give them an answer. Because there is nothing standing today in the way of the government doing that. So there are those areas that…

Shekhar Gupta: Worry you,that you find a lack of predictability…

Ratan Tata: Yeah. Telecom is another example. Through the years,through 10 years,if one went and looked if the stated government policy has been implemented in the manner and spirit that it was intended,the answer is no,it has been modified several times… to suit and protect individuals… public sector incumbents,or there is one segment or another.

Shekhar Gupta: So you are saying it has been changed at whim.

Ratan Tata: Usually,behind any change,behind any deviation,is a vested interest.

Shekhar Gupta: I remember two things you said at our last conversation referring to corridors. I’m taking the second one first — you said that we have come a long way but things still happen in dark corridors in Delhi and you said that we don’t know that much about them. The other thing you said that corridors of power don’t matter as much as they do… as they used to… but they still matter too much. How have the things changed in six years,have they gotten better or worse?

Ratan Tata: In some ways it has got better,but I think in many ways it is worse.

Shekhar Gupta: Tell us those,some of those.

Ratan Tata: Well you know there used to be greater adherence to policy. Today the interpretation of policy has become very vague,so eventually you find that you are arguing on something that the other side interprets in a manner that is so woolly and vague that you come away from that meeting thinking that I’m never going to be able to do this.

Shekhar Gupta: Do you have any specific example?

Ratan Tata: No,but let me give you an example that has been bandied and used in the press because they all give me a chance to clarify. It may be known to many,or some,that when Narasimha Rao was the prime minister,an accord was signed in Singapore to form a joint venture airline. J.R.D. Tata was called by Mr A.N. Verma (who was the Principal Secretary to the PM) to put up a proposal for such an airline. And we went to Singapore Airlines… we made great progress… we put a proposal before the government. There was no policy for FDI at that time and a fifty-fifty joint venture was… I wouldn’t say approved,but informally accepted. Then vested interests brought about a change and fifty-fifty became forty-sixty as a new policy. No reason,no grounds given. Singapore Airlines accepted that to become a minority player. So sixty-forty — a new proposal was made. In this period of time,many governments also changed. I can’t specifically say which happened when but it started in Narasimha Rao’s time,then Mr Gowda,then Mr Gujral.

Shekhar Gupta: In between that 13 days of Mr Vajpayee.

Ratan Tata: Yes. Then finally we met every requirement that the government had… and then the last change was no,no foreign airline can participate. If you were a diaper manufacturer or P-cap manufacturer,you could invest… but as an airline,you couldn’t. And this is the kind of change… and you see that is an example,you see cases where you just don’t get any traction,nothing happens… the minister may tell you that I will do this,we will deal with this but it doesn’t take place.

Shekhar Gupta: I know you have struggled with defence for some time.

Ratan Tata: Yes,then again it’s an issue of not knowing where you stand…

Shekhar Gupta: Do you regret being in telecom? Do you sometimes say that I’m doing 20 things,why telecom?

Ratan Tata: Yes,because of the inconsistency of policy… because of the bias that exists… yes,sometimes I do. But it’s a great area. It’s a wonderful thing that the government opened it up to everyone and it’s a travesty that policy got subverted in a manner that it helps a few,disadvantages others.

Shekhar Gupta: And when you can subvert policy and now sort of extra policing and editorialising,when you have the freedom to subvert the policy then that opens the market for rent-seeking?

Ratan Tata: Maybe yes,theoretically yes.

Shekhar Gupta: Has anybody asked for money in telecom?

Ratan Tata: In telecom… no.

Shekhar Gupta: In aviation,you made a remark that somebody sitting next to you said something…

Ratan Tata: Yes,I said that somebody sitting next to me… what I said was not what the media reported. What I said was a fellow industrialist,on a flight sitting on the seat next to me,said you know,why don’t you pay the minister? You know that he wants — Rs 15 crore. No one had ever asked us for any amount of money.

Shekhar Gupta: Those were very good times. Rs 15 crore would be small change now.

Ratan Tata: Yes,I realise that. And the person said you know,you people want the airline,don’t you? You want the airline,so pay Rs 15 crore. How does that matter to you? And I said — what I was trying to say in answer to the question that — how do you avoid corruption? I said that ought to be self-regulating. I told this person that you will never understand,we just don’t do that. He said you are stupid. I said no,I want to go to bed at night feeling that I have not succumbed.

Shekhar Gupta: And you have never done it… Even for a mining lease anywhere? Because now it is considered to be the normal thing for mining leases.

Ratan Tata: No,it is not… on our part,no.

Shekhar Gupta: Tatas have never done it,and have you suffered because of that?

Ratan Tata: Yes. We have several mining leases that are still not extended — old mining leases that have not been extended,questions asked… We are an expanding steel company. We need iron ore in terms of assured supply. If we are allowed to expand in iron and steel,one would think if one looks back the 100-odd years that Tata Steel has been in existence,have we once exploited or usurped in any way the mining interest that we have? Have we profited? Have we destroyed the environment? Have we done any of those things? We have not. But we are the ones that are picked out and it’s unfortunate. I think our effort has been to be good corporate citizens.

Shekhar Gupta: There is another story floating… is that the group of Tatas paid a sizeable amount of money to Madhu Koda…

Ratan Tata: It’s absolutely untrue. As the chairman of Tata Steel,I can say,we have not done any such thing,directly or indirectly.

Shekhar Gupta: Did you get many leases in his time?

Ratan Tata: Actually we have got no leases in his time,which should in itself be an indication of the veracity,or the lack of veracity,of the stories being circulated.

Shekhar Gupta: But you have heard this charge?

Ratan Tata: Yes,we heard about the charge. I believe Tata Steel has even been called and asked those questions by the enforcement agencies and we have given them a response,which is the same as I have told you.

Shekhar Gupta: But this is the first public response. Back to Delhi … At which point did you realise that you needed someone in Delhi to work for you and then you hired Niira Radia. How did that happen?

Ratan Tata: There was a time,I forget how many years ago,maybe 10-15 years ago,we found ourselves,like just now,under attack — all kinds of statements being made. In fact I’d go back home wondering where did these stories come from? We haven’t done this,we haven’t done that — it would go on and on in this way. One example is,I think you are aware of,the story about us having hobnobbed with the extremists in Assam …

Shekhar Gupta: That story,if I may say so,was broken by the Express. In ‘96,I think,if I remember correctly…

Ratan Tata: No no,the story was not broken. It was a prosecution by the Assamese government at that time. And like I wondered,where is this coming from? So those kinds of issues led us to say that we need to protect ourselves and get our point of view across to the media. Every time we had tried to do something,it was a defensive move,rebutting or denying or usually we got relegated to a back page in newspapers. So we decided we go out and seek a firm to represent us and that is how we in fact came together with Niira Radia who formed this company.

Shekhar Gupta: But you know,if you look at these tapes,such as they are,I think what’s caught public imagination is this idea that somebody… you can call her a lobbyist,you can call her a PR person,a representative… is talking to people to influence a Cabinet appointment.

Ratan Tata: I listened to some of the tapes,and you know,I am not a Delhi resident— but to a great extent,I wonder whether if other people’s phones were tapped,whether we’d get similar kinds of conversations,whether she has the power to influence Cabinet appointments or anything of this nature.

Shekhar Gupta: I mean,certainly,if she thought,or if anybody thought that this could be done by journalists,I find it very touching that journalists can call up someone and say make so and so a minister,don’t make so and so a minister… I have been in this business for much longer than most people now,and I don’t think I could have… (laughs)

Ratan Tata: But you know,I really believe that Delhi is full of people whose lives revolve around politics,and what has happened today and what is going to happen,and who does what in political circles. So I really don’t know.

Shekhar Gupta: Dark corridors at 11 pm…

Ratan Tata: Now I think corridors are replaced by telephone lines… (laughs)

Shekhar Gupta: Did these revelations,these tapes come as a shock to you? And the emergence of the Tata name somewhere there?

Ratan Tata: Some of it came as a shock to me,but the tapes have been around for a long,long time in one form or another,or parts of it and I knew that there were some tapes… the fact that some included a conversation with me I also knew was there. I realised that her phone had been tapped,I realised that I could… that there had been many conversations,as with many other people… and what bothers me is that we are living in a state in this country…that that kind of thing happens on an official basis,and then it gets leaked… that’s a new phenomenon.

Shekhar Gupta: India is a funny country. We don’t declassify something that happened 60 years back. Nehru’s letters to Kennedy (for example) we have to get them from Kennedy’s family’s archive,we just got it two weeks back because Kennedy’s family’s archive had it. We still have that classified in India . Here we leak some information that were recorded few months back.

Ratan Tata: I think the porosity in Delhi also is something of great concern. Telephone tapes are leaked,official documents get leaked,files disappear. I think there is a great deal that the government has to look internally into.

Shekhar Gupta: All that happens in a corporate situations. Can you imagine what happens to the Pakistani,the Chinese,the CIA,if they get involved. Have you raised it with prime minister or finance minister yet?

Ratan Tata: Not to this extent.

Shekhar Gupta: Do you intend to?

Ratan Tata: Yes.

Shekhar Gupta: How would you do it?

Ratan Tata: I think at the present moment,I would like to register my concern as an Indian that this is happening. I don’t have enough knowledge to profess to the government what they should do,but I think as an Indian and as a caring Indian who is proud of my country,I feel I should register my…

Shekhar Gupta: Formally would you write to them?

Ratan Tata: I have been toying with whether to write or try to speak. Probably the better thing to do is to put on paper my concern and register my concern with them. I’m not seeking anything myself from this. I’m not asking for anything to be done for me. I’m asking the government to consider that there is an Indian who has a concern for his country that feels that this kind of thing should not happen,and that our country is such that we should honour the responsibility the agencies have and take the necessary prosecuting actions that needs to be taken… But this free-for-all and this sort of media blitz with seemingly evident agenda, and what looks more and more like a smokescreen,one should put an end to that,and get down to taking the culprits to justice and getting over with this.

Shekhar Gupta: And it is flooding the environment with things that are very seditious. It may be interesting to others but of no real consequence. In the little conversation between you and Niira — you are showing wearing a black tie/dress and she is wearing a black gown — it’s funny but it’s funny like a sequence in a movie.

Ratan Tata: But was that subverting policy? Was that in fact influencing the induction or removal of a minister? Was that toppling governments? You know,how is that of relevance and how do you correlate that with putting my picture on the cover saying “2G scam”?

Shekhar Gupta: Did it matter to you who became telecom minister?

Ratan Tata: From the standpoint of wanting to see,you know,a policy and a level playing field,yes,it would matter. If you say did I want to see Mr Raja in or Mr X…no,whoever we thought was going to be

Shekhar Gupta: But you have history with Maran…

Ratan Tata: Yes,unfortunately because I think he is a very intelligent person and we just had,if I might be honest with you,what seems to be a chemistry problem more than anything else. He is extremely intelligent,extremely sophisticated.

Shekhar Gupta: And very smart and articulate …

Ratan Tata: Yes.

Shekhar Gupta: Will you give me your description of what you think the scam is?

Ratan Tata: I really don’t know. When it started out,I thought it was Mr Raja’s alleged deeds,then it seemed the scam related to Niira Radia’s conversations with various people,which were more innuendos than anything else,and Mr Raja’s scam was the loss to the exchequer… I don’t want to comment on the rights or wrongs,but loss to the exchequer was computed on the basis of the 3G auction. The 2G spectrum was allocated before the auctions,so it looks somewhat like a hindsight issue but the media has said that he robbed the nation of X…

Shekhar Gupta: 40 billion dollars.

Ratan Tata: OK,so if that is so,somebody will need to show that there has been a sort of visionary view before the event took place that cost him to cause that much loss to the exchequer. These are things that I think the media has blown up. What is unclear to me is what really is the scam? Was it the manner in which he implemented the policy? If so…

Shekhar Gupta: The one is spectrum and the other is licenses issued in arbitrary manner…

Ratan Tata: Right,others feel that… So that should raise a question that all the accusations to Niira,they culminated in her client going to court. So you know,it’s not clear what the scam is.

Shekhar Gupta: Client going to court as a victim?

Ratan Tata: Yes,as a victim and not as a beneficiary.

Shekhar Gupta: Give your solution to the government. The three things the government should do now to calm down situation and also to take it to right conclusion.

Ratan Tata: I think the government has a new minister in place,who I admire for his ability to think through the situation. There should be first the calming down. The government should take over the control over the tapes and there should be strictures on the media to not use the tapes the way they have been using them… I think the government should institute a public inquiry on whatever they wish to do relating to the licenses,the manner in which they were implemented,the allotment of spectrum and far beyond the eligibility of certain players — that should not be ignored. In 2005,I was the person who advocated that spectrum should not be free. It upset Mr Maran and some of the operators made statements that if I have so much of money,I should donate to the PM relief fund.

Shekhar Gupta: Sunil Mittal?

Ratan Tata: Ya. At that time,I was the one who said that spectrum is a scarce resource and should be paid for,and I’m the only one who did not get any spectrum (laughter)… So the point is I think there be an inquiry to go into what has really happened and it should go back to 1999 or 2003 when policy were embedded in certain areas,and whoever the minister or the government was at that time. It should be a holistic view because the industry deserves a consistent policy,not a chop-chop policy — not a kind of review of what Raja did and what Maran did.

Shekhar Gupta: If investigation happens,you will fully cooperate with them…

Ratan Tata: Of course,if asked to.

to be continued

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