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The Adani affair: Collapse of regulatory structures People's Commission on Public Sector and Public Service - Statement  10.02.2023
Extracts:   SEBI’s own “investigations” into the use of shell companies has been going on for almost two years without any tangible progress. This is indeed serious because it reflects at best either lethargy, carelessness and dereliction of basic regulatory duties, or, at worst, a permissive regulatory regime that encourages cronyism.

Recent media reports reveal that the authorities in Mauritius have been in touch with SEBI, indicating that SEBI may well know or may have already been in the know about the true identities of “beneficial owners” in entities that own shares of the Adani companies.

Answering a Rajya Sabha Question on shell companies on February 6, 2018, the Corporate Affairs Minister stated “The Companies Act, 2013 does not define the term Shell Company. In effect, the Union Government, by conceding that it has no laws to check the abuse of shell companies, has accepted that it has no interest in establishing structures that promote transparency in markets that ensure that the identities of the true beneficial owners of companies are visible to all instead of hiding behind opaque walls.

To make matter worse, the Government’s decision of August 2022, deciding to allow Indian corporate entities to invest in foreign locations, provides ample scope for Indian entities to use shell companies located in tax havens to indulge in round tripping, a mechanism that enables the rerouting of black money into the Indian economy. The decision also permitted domestic entities to make overseas investments, even if they were under investigation by any investigative agency or regulatory authority, a provision that opened the overseas doors for tainted individuals and companies to continue with round tripping. This raises concerns about the motives underlying the decision

The Adani fiasco highlights the futility of the government’s reliance on private global champions to power the Indian economy. Moreover, such a misplaced reliance necessarily rests on a culture of “cronyism”, while holding back the potential of publicly-owned Central Public Sector Enterprises (CPSE).

There is widespread apprehension that many corporate entities appear to be operating through a multi-layered and complex web of shell companies set up in tax haven jurisdictions. This has the effect of creating a shadow economy, which enables them to not only evade taxes in India, but to manipulate markets, pass on funds to political parties through opaque vehicles such as Electoral Bonds, and mock at regulatory norms. The power to influence the political executive to adopt policies and laws that promote their own interests, and to the overall detriment of the public interest, is simply unacceptable to a functioning democracy.

Rajni Bakshi writes: The importance of George Soros’s Open Society – for India and the world   https://indianexpress.com/article/opinion/columns/george-soros-indian-democracy-modi-remarks-open-society-8454825/  Rajni Bakshi February 19, 2023
George Soros’ personal history is itself proof that the most serious contest of our time is not between the 'right' and the 'left' or capitalism and communism. It was between open and closed societies
 Soros did not stop at seeing repressive communist regimes as enemies of an open society. By the mid-1990s, Soros began speaking out against what he called “market fundamentalism”. He reformulated his understanding of open society when he realised that excessive individualism and lack of social cohesion are as dangerous as excessive state control. While Popper had limited himself to critiquing communism, Soros used his knowledge as a leading market player to bust myths about the “free market”.

Market fundamentalism, he argued, is a mindset which reduces virtually all human interactions to transactional, contract-based relationships that must be valued in terms of a single common denominator — money.

Many other voices, both in the West and East, helped to puncture “market fundamentalism”. They argued that when free market ideology is treated as an ultimate truth this destroys social good and eventually undermines an open society by insisting that “There Are No Alternatives”, commonly known as the TINA effect.

This is why, in India today, the division between “left” and “right” is unhelpful to grasp what is most urgently at stake.

open society is hanging by a thread. In India, this is a strong thread because, until recently, living with differences came naturally to us. And, however distracted we may be by the controversy of the day, old mental habits cannot evaporate so easily. We know that reality is made up of competing, sometimes contradictory, yet co-existing truths. Open society lives on as long as this is the anchor for a large enough number of people and they dare to speak out.

For full speech of Soros: https://www.georgesoros.com/2023/02/16/remarks-delivered-at-the-2023-munich-security-conference/

What degree of dominance do India’s biggest businesses enjoy? Decoding the Billionaire Raj TN NINAN 18 February, 2023   https://theprint.in/opinion/what-degree-of-dominance-do-indias-biggest-businesses-enjoy-decoding-the-billionaire-raj/1380898/ The rise of multi-business conglomerates stands in contrast to the earlier rise of focussed, single-business enterprises in telecom, IT services, pharmaceuticals, and automobiles.