Of 4 fugitive tycoons and the election

Bloomberg February 5 | Updated on February 06, 2019

Vijay Mallya   -  THE HINDU

Nirav Modi

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 jeweller and a corporate lobbyist after they fled overseas to avoid undergoing trial at home. Just ahead of the polls due by May, the premier has already had some success.

UK Home Secretary Sajid Javid signed an order on Sunday to extradite Vijay Mallya, a colourful beer baron, who now lives in London after an airline he owned defaulted on $1.3 billion in loans. The move follows 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 (BJP) 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 perception and optics, and this comes at the right time.

Drive against corruption

Extraditing businessmen like Mallya and Nirav Modi, a billionaire diamond jeweller accused of defrauding $2 billion from a State-run bank, will help puncture an Opposition narrative centred 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 organisation, will feed into the image of Modi as premier with no tolerance to 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 demonetisation 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, its 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 February 1 to win back voter’s 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 yachts in his heyday — makes voters uncomfortable, Nirav Modi, whose jewellery was worn by Kate Winslet to Dakota Johnson, represents the power of the rich who typically get away with looting money from taxpayer-funded state-run banks.

Symbolically, it has a lot of relevance for the election. Elections are a lot about optics, Observer Research Foundations Sahoo said. This is a big victory for the ruling party.

Published on February 06, 2019

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