Four Fugitive Tycoons Loom Large Over India’s Election
A group of fugitives could play a crucial role in the world’s largest election.
(Bloomberg) -- A group of fugitives could play a crucial role in the world’s largest election.
Indian Prime Minister Narendra Modi, who is set to face about 875 million voters in his re-election bid, has stepped up efforts to punish a liquor tycoon, an arms dealer, a billionaire jeweler and a corporate lobbyist after they fled overseas to avoid trial at home. The premier has already had some success ahead of the polls due by May.
U.K. Home Secretary Sajid Javid signed an order on Sunday to extradite Vijay Mallya, a colorful beer baron who now lives in London after an airline he owned defaulted on $1.3 billion in loans. The move follows a successful extradition of Christian Michel, an arms dealer accused in a $759 million chopper scandal and lobbyist Deepak Talwar, who were flown back from Dubai.
These developments are at the core of two major election issues for Modi -- addressing corruption in a society mired with decades of graft and a banking system reeling under billions of dollars of soured debt. After winning a record mandate in 2014, Modi is looking increasingly vulnerable, with his ruling Bharatiya Janata Party losing key state elections. Prosecuting wealthy individuals accused of breaking the law could boost his image at a critical time in the campaign.
“This greatly enhances Modi’s reputation as an anti-corruption fighter and shows that he’s trying to clean up the system,” said Niranjan Sahoo, a senior fellow with the Observer Research Foundation, a New Delhi-based think tank. “Elections are about perceptions and optics, and this comes at the right time.”
Diamond Jeweler
Extraditing businessmen like Mallya and Nirav Modi, a billionaire diamond jeweler accused of defrauding a state-run bank of $2 billion, will help puncture an opposition narrative centered around the government’s coziness with big businesses.
Getting back Michel and Talwar, an aviation industry middleman alleged to have misused foreign funds that came to his non-profit organization, will feed into the image of Modi as a premier with no tolerance for corruption.
Mallya, Nirav Modi, Michel and Talwar deny the allegations. Mallya said he will appeal the extradition order.
Election Optics
Nabbing high-profile individuals accused of corruption also helps draw attention away from the government’s inability to create jobs and the ongoing fallout from demonetization and a poorly implemented goods and services tax.
“The Modi government is hailing this decision as a success in its anti corruption campaign,” said Katharine Adeney, director of the University of Nottingham Asia Research Institute. “However, this is unlikely to have much impact on the election. For most Indians it’s the lack of jobs, rural poverty and the state of the economy that are the big pressing issues.”
His administration has already announced $13 billion worth of measures including cash handouts for farmers, a pension program for informal-sector workers and tax relief for India’s squeezed middle class in the federal budget on Feb. 1 to win back voter support.
The accused represent a slice of India’s wealthy elite who are loathed by the poor for their perceived ability to avoid being brought to justice.
While the flamboyance of Mallya -- a globetrotter with his private jets and yacht in his heyday -- makes voters uncomfortable, Nirav Modi, whose jewelry was worn by Kate Winslet and Dakota Johnson, represents the power of the rich who typically get away with looting money from taxpayer-funded state-run banks.
Yet, critics say politicians across parties should be asked tougher questions about corruption ahead of the election, rather than allowing optics to take center stage.
“That a big show is now being made of bringing these fugitives back points to electoral performativity,” said Nikita Sud, an associate professor of international development at Oxford University. “Instead of going gaga over an extradition order facilitated by the U.K. government, surely we should be holding our politicians more to account?”
To contact the reporters on this story: Anurag Kotoky in New Delhi at akotoky@bloomberg.net;Iain Marlow in New Delhi at imarlow1@bloomberg.net
To contact the editors responsible for this story: Unni Krishnan at ukrishnan2@bloomberg.net, Ruth Pollard, Abhay Singh
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