Wednesday Post

Today also I am going back into history and briefing you about the first scam where members of Gandhi family were directly involved.

MARUTI SCAM

Most of you will know that Maruti as first low priced car launched in the Indian Market. Actually it was dream & the brain child of Sanjay Gandhi to manufacture cheap car in India, but he started in a very dubious way. Let us see the major happenings in this pet project of Sanjay Gandhi:

On16th Nov 1970, a company was launched known as Maruti Technical Services Pvt Ltd.(MTSPL). The promoters of this company were Sanjay Gandhi & Sonia Gandhi. The Company was set upto provide technical know how for the design, manufacture and assembly of a wholly indigeneous car, with share capital of 20 shares of Rs 10 each held between them.

Afterwards MTSPL enters into agreement with Sanjay Gandhi(who owned 50% of MTSPL), under this agreement Sanjay Gandhi will supply company the know how for a fees of Rs 3 lacs. Subsequently he was given  1500 shares of 10 each .

In June 1971, another company Maruti Ltd was launched, with Sanjay Gandhi as MD. This company  will avail know how from MTSPL to produce cars.

In June 1972, MTSPL entered into agreement with Maruti Ltd, by which Maruti Ltd will pay Rs 5 lacs to MTSPL for providing the know how. MTSPL is also entitled to technical fees of 2% of net sales of motor cars. Six week later Maruti Ltd pays Rs 5 lacs to MTSPL, and who in turn pay Sanjay Gandhi Rs 3 Lacs in fees for know how.

After few years , Sonia Gandhi is appointed MD of MTSPL for 5 years, with a salary of Rs 2,000 pm plus one percent commission on the net profits, plus perquisites. She is also allotted 2000 equity shares of 10 each, in two share certificates of 1900 and 100 shares each.

Even more surprising and fascinating was the decision to Launch one more company by Gandhi family to manufacture Road Rollers. This company Maruti Heavy Vehicles Pvt Ltd(MHVPL) was lauched with Sonia Gandhi as Managing Director. This company had many share holders but controlling interests were with Gandhi family.

In April 1975,this company MHVPL also enters into agreement with MTSPL for providing know how for manufacturing Road Rollers, as per agreement the MHVPL pay MTSPL agreed fees and 2% of net sales of Road Rollers and Spare parts.

Most of these  things mainly happened discretely in the beginning and the later period happened to be Emergency. But after the Emergency, when Janata Govt took over many facts  about this Maruti scam became public, and following questions were raised

1.Did Sonia Gandhi, who was Italian citizen then, could become the MD of the Indian Company and acquiring its shares.

2.Was the company floated by Sanjay & Sonia Gandhi was capable of providing know how for manufacturing Cars and Road Rollers

3.Was Sonia Gandhi capable of managing the company as MD.

A Commission of Enquiry was constituted By Janata Govt under the Chairmanship of Justice AC Gupta, which probed Maruti Scandal.

In the report submitted by commission in 1978 and in the report following points were raised

1.It was fact known to all the concerned that Sonia Gandhi was Italian citizen, in view of Foreign Exchange Regulation Act (FERA), she could neither hold shares of any Indian Company nor hold office of profit in such company, without prior approval of RBI. It was very surprising that Sonia Gandhi  without any technical knowledge was appointed  as MD of Technical Services Company, and large sum of money was paid to her as salary and perks. It was further stated in report the Income tax officer disallowed part of amount paid to her as excessive as she did not have qualifications to be able to render technical service to the company. She had to resign as MD.

2.The commission also probed  whether MTSPL floated by Sanjay & Sonia had requisite knowledge to manufacture Cars & Road Rollers. The commission reported that company did not have any know how knowledge, they manufactured some prototypes by procuring parts from here and there  and no prototype was identical. There was no fixed design for cars, and company did not have any R&D facility.

3.Even though both Maruti Ltd and MTSPL knew that they have not finalized the design of any car , yet they started to recruit Dealers for selling the cars, to create the impression in the market that the Maruti Car will be launched very shortly in near future. Two of the selected dealers were given cars to display, one of the dealer had to push the car to his show room,and both the cars were not in working condition No money  was refunded to them. One of the dealer who wanted to terminate the dealership was threatened by Sanjay Gandhi, and finally he had to apologise. One dealer who asked for interest on his security deposit was arrested under MISA. Commission also reported that the company did not have any qualified person or specialist on Road Rollers or Cars.

The enquiry, never revealed from where did Maruti Ltd get Rs 5 lakhs, which was paid to MTSPL and who financed Maruti Ltd  to procure land for setting up factory in Gurgaon.

This was known to be first of the many episodes , which were to follow later, which implied that Nehru/ Gandhi family always felt that they have got birth right to loot the country.

After Indira Gandhi came to power in 1980, and soon after Sanjay died in plane crash. Indira Gandhi revived the Maruti car project and made it Public Sector Unit, and later signed joint venture with Suzuki Motors of Japan and first low priced Maruti car was launched in around mid 80s.

Awaiting your comments/feed backs/views.