So what’s been going on in the great Republic of Hindunazistan since I sent you the last despatch from the front lines?
Plenty, of course; so much that I won’t even bother with most of it, entertaining as it might be, with tales of state elections involving prima donna politicians – believe me, Indian politicians can put Donald Trump to shade in egotism without even trying – or the travails of so-called sports stars, heat waves and the like. This particular Despatch will confine itself to discussing two major “scandals” which have consumed media time and attention over the last couple of months, and which, as we’ll see, are indirectly connected.
The first is the saga of Kingfisher Airlines.
Until the so-called “economic liberalisation” of the early 1990s, India had first two, and then three, state-owned airlines: Air India, which serviced the overseas routes, Indian Airlines, which flew domestically (and to a couple of heavily travelled destinations in the vicinity, such as the Persian Gulf and Nepal) – and Vayudoot, an ill-starred attempt at a feeder airline serving smaller destinations, such as in eastern India. But with “economic liberalisation”, while Vayudoot, er, crashed and burned, and Indian Airlines was forcibly merged with Air India, a whole mess of other privately owned airlines entered the fray. A lot of them, naturally, failed. At least one, Jet Airways, thrived, and continues to thrive, but its finances were, and are, murky in the extreme. There have been multiple and repeated accusations that Jet is a Mafia money-laundering scheme, but for some strange reason no Indian government seems at all eager to take a look at this. You’d almost imagine that Jet’s owners (or “alleged owners” as one critic put it) are paying off successive regimes to look the other way, but that surely can’t happen, can it? I mean, Indian politicians can’t possibly be corrupt, can they? Of course not!
As the initial bloodletting among the private airlines subsided, and the field stabilised a little, one Vijay Mallya decided that he wanted to get into the business as well. Mallya was the heir to a brewery empire – United Breweries, which makes Kingfisher Beer – and also a politician, with a seat in the Upper House of the Indian Parliament and multiple cronies across the political spectrum. He, of course, needed money to start this airline, which was to be called Kingfisher, just like the beer. To get this money he approached the nationalised Indian banks for loans.
Now, this might be surprising to you, but normally banks aren’t all that eager to lend money unless they’re more than certain they’re going to get it back. If I – and I am a perfectly solvent citizen with a criminal record comprising two parking tickets – were to go asking for a loan, as I have had to on a couple of occasions, they’d check my credit rating, my tax returns, and my projected future income back, front and sideways before telling me they’d be able to lend me a fraction of the amount I’d asked for. And that’s even though I am a qualified dentist and the loans I was asking for were entirely to do with running my clinic.
Not so for Mallya. Even though he had no, zero, experience of running any kind of airline, the banks seemed to have absolutely no problems pouring in money. Soon enough, he bought a fleet of planes, hired staff by enticing them away from other airlines with much greater salary offers, and started flying operations. And in order to make his airline stand out from among the others, he started offering things that none of the rest did, such as paying for booking on other airlines if one of his passengers missed a flight. And in order to keep his employees happy, he continued to pay them more than anyone else, invited them all to gala parties, and the like.
All this, of course, was on the money he’d borrowed from the banks. Please remember this.
The airline business, contrary to what a lot of people might imagine, is actually extremely capital-intensive, and almost all earnings are ploughed right back into keeping things going. I’ve read that the profit margin can be as low as 3%. Therefore, if one starts out by increasing one’s expenses far beyond the competition, one must be able to compensate by increased income, or one will be faced with bankruptcy. And with the strictly limited paying capacity of the Great Indian Muddle Class, one can’t increase income beyond a very small limit because the customer will simply choose the cheaper alternatives. This is only logical; it doesn’t need an airline executive to figure it out.
But, apparently, this was beyond the cognitive capacity of a beer baron.
By the mid-2000s, then, Kingfisher Airlines was so far into the red it would have been time to man the exits. But instead of restructuring and taking a hard look at his business model, Mallya apparently decided that the problem was that he wasn’t flying to enough destinations. Kingfisher Airlines, at that time, was only cleared to fly within the country; Mallya wanted international routes.
To do this, he decided to buy another airline.
The airline he decided on was Air Deccan. Air Deccan could be called the polar opposite of Kingfisher. Owned by a former airline pilot, Captain Gopinath, it was ruthlessly efficient, extremely cost-conscious, and provided a totally no-frills flying experience for its passengers, keeping them coming with fares below anyone else’s. But Air Deccan had one precious thing Mallya wanted – it had rights to fly to foreign destinations. So he made an offer Gopinath apparently found impossible to refuse, and bought the airline.
Once again, you do not buy an airline with the contents of your piggy bank. Guess where Mallya obtained the funds to purchase it?
Let’s play a little mind game. We’ll assume that you’re a moneylender whose livelihood depends on earning interest on finds you loan out. I come to you asking for money to set up a bread bakery, even though I have no idea how to make a loaf of bread. Without the slightest hesitation, you lend me the money I ask for.
After a couple of years, the bakery is on the rocks, earning so little that after paying staff salaries and my suppliers I have not enough left over to even start paying your loan back. Now, I decide that the solution to my problems is to buy another bakery, one which makes fancy cakes. I have failed at a business that depends on making bread, and now I want to make fancy cakes as well. Right.
So I come to you, demanding even more money to buy this cake baking business. What would be your response? You’re totally going to throw open your cash drawer and give me wads of currency notes, aren’t you? I think not.
Well, guess what happened with Kingfisher. I bet you can’t. Oh, wait, you can. Anyway.
Earlier, Kingfisher had signed an agreement with Deccan promising not to poach staff from it. Now, after buying the airline, Mallya promised that he wouldn’t lay off anyone, even though this would mean a considerable amount of duplication of personnel. How many separate sets of baggage handlers and check in counter staff does an airline need at one airport, anyway?
So this might have endeared Mallya to his new employees, but it did nothing to help Kingfisher to get out of the red. Of course, it did have those new international routes. They would make it money, right?
Wrong. On the international circuit, Kingfisher was suddenly faced with competition from the big boys, people like British Airways and the like. More than obviously, they weren’t keen to see their profits cut into by an upstart like Kingfisher. And, unlike Mallya, they had the financial resources to undercut the competition and wait for it to collapse.
Again – once again! – let me remind you that all this was happening on the money Mallya had borrowed from the nationalised banking sector. The taxpayer, in effect, was financing all this.
Also, let me remind you that Kingfisher Airlines was not Mallya’s main source of income. That remained United Breweries and Kingfisher Beer.
By now, though, the banks were at last becoming alarmed at Mallya’s failure to reimburse their loans. So they demanded he start paying them back, or else.
Or else what? As it turned out, what it meant was that or else the banks would enmesh themselves even more in the Kingfisher wreck.
This was the proposal Mallya made the banks: instead of paying back the loans, he would pay the banks back with shares in Kingfisher Airlines. A magnificent offer indeed!
Let’s again go back to my bakery. I can’t run a bread making business, I’ve just bought a cake shop on top of that, and you want your money back. I instead suggest that I give you a sleeping partnership in the (clearly failing) business. Would you accept?
Can you doubt that the banks did?
By 2012, Kingfisher had finally reached the end of the road. It could no longer pay the staff the extravagant salaries to which they’d grown accustomed. It abruptly declared a lockout, shut off the fund flow, and ceased flight operations. The shares with which Mallya had paid the banks became worthless scraps of electronic paper. The airline came to ground, a flaming wreck.
The impact of this was felt, of course, by the laid off staff only. Mallya himself had his cash flow from Kingfisher Beer and other business concerns coming to him uninterrupted. But his erstwhile employees had become so used to their inflated salaries, and so certain that they would continue uninterrupted, that a lot of them had taken to living well beyond their immediate income. They’d sent their children to the most expensive private schools, taken huge personal loans to buy swank houses, and the like. Now they were not only cut off from those funds, they couldn’t find jobs in the airline sector, which had suffered even further contraction. The children left the posh schools, the fancy houses went in distress sales, and several of them even committed suicide.
But none of this touched Mallya. He continued with the same old playboy lifestyle, being seen with the crème de la crème of society, and nobody raised a peep. That is, until early this year, when he made the tactical error of buying a professional cricket team. The media, on the lookout for a sensation, suddenly began asking on what basis he was buying this pro cricket team when he was so deep – to the tune of 90 thousand million rupees – in debt.
Try saying that to yourself, ninety thousand million rupees. Try imagining the zeroes. I’ll wait.
Mallya’s response was anger. His debts, he fumed, were a business between him and the banks. Nobody else had any right to talk about them. But his political connections were so well known, and the resentment against the moneyed class so high, that the media latched on to it like manna from heaven. The banks, too, finally began to find their voice and bleat for payment. The whole thing became a media circus, but the politicians, strangely, stayed totally silent.
They were so silent, in fact, that if only they hadn’t been obviously incorruptible and upright Indian politicians, you’d have thought they were terrified that Mallya had information on them that he was threatening to spill.
You’d have by this time thought it likely that Mallya was someone who had every reason in the world to run away from the country, and that the obvious thing to do would be to seize his passport – something eminently within the rights of the government – to prevent him from leaving. No such luck. On 4th March, 17 banks, led by the State Bank of India (in which, by the way, I have an account) moved the Supreme Court to stop him leaving, and to have him arrested for the non-payment of the 90 thousand million rupees he owed. This was a pretty strange motion to make, seeing that Mallya had already left the country; he flew to Europe on 2nd March...first class.
Is it a surprise that he'd sold his stake and taken a huge amount as severance pay, leaving his former employees high and dry?
Where in Europe did he go? Which is the world’s acknowledged refuge for financial criminals and oligarchs of all sorts, welcoming them and their ill gotten gains with open arms?
London, of course.
While the government was still expostulating that it was sure that Mallya would return, a journalist tracked him down in England and interviewed him. He claimed that he “hoped” that he would be able to return to India “someday”; anyone not totally brain dead would be able to deduce that this “someday” would never come.
Mallya’s case is, basically, a perfect illustration of the crony capitalist system, where robber barons are allowed to do as they wish with public funds in return for kickbacks to enabling politicians. If India chooses to embrace the capitalist system, it can’t complain when unscrupulous criminals get away with murder; in this case, the Kingfisher employees who were driven to suicide, for example. Capitalism rewards greed and punishes principles; and Mallya is the perfect product of that system. Possibly his only misfortune was that he’s Indian and not Amerikastani; in the latter instance he could have applied for a bailout from the blood soaked war criminal Barack Hussein Obama, and got it too.
Now here’s an interesting thing; books have been written, literally, about the fall of Kingfisher, and yet they somehow all manage to completely fail to mention this simple fact. So remarkable is this omission that I can’t see it as anything but deliberate. Criticism of the capitalist system is verboten in India today, except for Maoists and environmentalists, who are, as the government has repeatedly certified, enemies of the nation.
While in exile, and still making vague noises about returning in April, Mallya made an offer to return part (much less than half) of the loan amount to the banks. They turned the offer down. The government then, very late in the day, cancelled Mallya’s passport. It did no good, of course, in London; a place that shelters Russian oligarch crooks and Chechen jihadi terrorists won’t be in a hurry to throw out someone who has still immense personal funds at his disposal.
I am deliberately not suggesting that the Indian government sent back channel messages to Britain to not put Mallya on a plane back to India, even though, without a passport, he’d be an illegal resident in England. That would imply that the Indian government is not interested in getting him back to stand trial, which in turn means that the Indian government is complicit in his crimes and fraud. That couldn’t be, could it? Right?
After his passport was revoked, Mallya finally announced that he would never return to India, something that should have set the media afire, but didn’t; not a ripple. That was because by then the chattering heads on the telly were eagerly discussing something else entirely...
...the affair of the Augusta Westland Helicopter Deal.
Before I begin on this, let me go over a little bit of recent history. You’ll see why this is important in a minute.
Currently, India is ruled by the Hindunazi BJP party of Prime Minister Narendrabhai Modi. It will be nothing new to readers of this blog when I repeat that I despise both the party and Modi himself; but I acknowledge that they genuinely won the last election, albeit with just 31% of the vote. Modi may be vile, and he may have betrayed all the dewy eyed expectations of his dupes, I mean voters – but he is a genuinely elected prime minister, and when he issues orders, said orders come from himself.
That was not the case, though, until 2014. From 2004 to 2014, for ten whole years, India was ruled by the Congress Party. The Congress was once genuinely socialist, though those days are long, long gone; today, though non-Hindunazi, it’s even more right wing than the BJP where Big Business is concerned. Also, the Congress is not really a political party; like most Indian parties except the Communists and some of the Hindunazi groups, it’s basically a private proprietorship.
The owners of the Congress are the Nehru-Gandhi dynasty, currently represented by the Italian-born Sonia Gandhi and her son Rahul. Though they own the party (quite literally – it’s an open secret that the party’s funds are held in their names), they found a handy way of not taking responsibility for the actions of the government their party led; when they won the election in 2004, they installed a pliant, rubber-spined nonentity, one Manmohan Singh, as prime minister. Manmohan Singh had only one thing to commend him: he was totally colourless, utterly without any charisma or ability, and had never, not even once, won any election in his life, not even at the municipal level. He therefore had no political base whatsoever, and could never, under any circumstances, emerge as a threat to the dynasty within the party. It was known to everyone that all orders given by Manmohan Singh were passed on to him by the dynasty; he himself was a rubber stamp in a blue turban, no more.
The point, therefore, is that anything done by him in an official capacity was merely as an instrument for the dynasty. This has to be kept in mind.
Now, in 2010, the Air Force, for reasons unknown, decided to purchase 12 helicopters for the specific purpose of transporting top government officials, including the president and prime minister. Why this purchase was decided on I’m sure I couldn’t tell you; all these decades the purpose was served perfectly well by Russian-built Mi 8 and Mi 17 helicopters, and there had never been any complaints about them. Suddenly, though, the air force needed a squadron of luxury VIP transports.
[Of course, I could suggest to you that the air force would never have decided on any such purchase without orders from the government, in fact could not legally have decided on any such purchase without orders from the government. I could then suggest to you that the “government” in this case was the Gandhi dynasty. But they’d just be hypothetical suggestions. Please don’t imagine I am accusing anyone! All Indian politicians, even if they were born in Italy, are pure as the driven snow!]
Having decided on the purchase of these machines, the air force then called for bids from manufacturers able to meet the specifications demanded. One of these specifications was a service ceiling of 6000 metres, presumably so that the big-shots being given rides in these planes could visit high-altitude Himalayan destinations. At a meeting called by the then Air Force chief, one Air Chief Marshal SP Tyagi, though, the decision was abruptly made to reduce the ceiling requirement from 6000 metres to 4500. That’s a whopping 25% reduction of the performance parameters, if you’re keeping track; not a matter of a minor adjustment.
Now, there was the Italian company Finmeccanica, which owns the Italian/British aviation company Augusta Westland. Its AW101 model was nowhere in the running for the contract as long as the ceiling requirement was 6000 metres; as soon as it was reduced to 4500, though, not only did it suddenly become eligible to bid, it magically won the contract at once!
Let me take a moment to remind the reader that this was under the Congress government, which is just a name for the Gandhi dynasty. Let me further remind the reader that Sonia Gandhi is of Italian origin, as is Finmeccanica. I would also venture to say that Italy is the country that keeps cropping up in political controversies in India, more than all other nations put together, ever since a (by the standards of the time) giant scandal over the purchase of Bofors howitzers by the army back in the late 1980s. An Italian crony of the Gandhis, Ottavio Quattrocchhi, was among those implicated in getting kickbacks from slush funds in the deal; the Gandhi dynasty helped him skip the country, and made sure he was never extradited back to face trial as long as he lived.
I am sure it’s a total coincidence that another Italian company should be involved this time round, though. Please keep in mind that I am totally not suggesting Sonia Gandhi used her power to influence the deal in favour of another Italian group. That would mean she was dishonest, and, of course, that can’t be true.
Now, the deal with Augusta Westland was signed in 2010. By early 2013, though a huge advance had been paid, not a single helicopter had been delivered. Manmohan Singh’s “government” was in dire trouble, staring at defeat in the elections due the following year. It was at that stage that a commission alleged massive bribery in the deal, with payoffs being made to, among others, SP Tyagi and his relatives. Finmeccanica’s CEO, one Giuseppe Orsi, was arrested in Italy on bribery charges, the government belatedly cancelled the contract with Augusta Westland, and arrested an infamous crooked arms dealer who had served as a middleman in the deal.
[Said arms dealer and his Romanian wife are incarcerated in Delhi’s Tihar jail, but apparently enjoy such facilities as candlelight dinners together every week. I can’t even recall when I last had a candlelight dinner, assuming I ever had one, unless it was when the power went out while I was eating. The perks of being a rich jailbird!]
And, remarkably, one day after the Central Bureau of Investigation submitted charges about the corruption in the deal in 2013, another middleman, a Brit called James Christian Michel, was allowed to escape the country. Isn’t it remarkable how people are magically permitted to leave in the nick of time? Quattrocchhi, Michel...Vijay Mallya?
Time passed. The Congress was wiped out in the 2014 elections, being reduced to just 44 seats. Modi took over among high hopes, and dashed them so quickly that his worshippers are still unable to believe their eyes. Meanwhile, Orsi was acquitted of bribery by a court in Italy, and it seemed that the Augusta Westland tale had reached a dead end.
That is, until now, when another Italian court overturned the acquittal of Orsi, and exposed a lot of dirt that had been ignored so far; including the fact that Augusta Westland had earmarked funds to influence air force officers and politicians to sway the deal in its favour. Among said politicians named by the court were several dynasty flunkies, not to speak of, oh heavens, Sonia Gandhi and her son themselves!
Can you doubt that the Hindunazis seized on this like a starving moderate cannibal headhunter leaping on a dead Syrian soldier’s heart?
Also, Augusta Westland seems to have earmarked funds to pay off the Indian media to “look the other way”, according to the Italian court. Apparently their silence was bought for three years, but the money has run dry now.
No tears need be wasted on the Congress, which, if you've been paying attention so far, you'll conclude is even more despicable than the Hindunazis. Its response has basically been bluster, meant for one purpose only – to protect the dynasty. All other considerations are secondary. The bluster has been spectacularly unsuccessful, but that doesn’t really matter since everyone knows perfectly well that nothing will come of it in the end. When everyone’s hand is in the till, if one thief gets punished, the other might get his hand chopped off tomorrow.
Meanwhile, the Hindunazis have used this opportunity not just to quietly bury the Kingfisher controversy, but to cover up their continuing agenda of anti-Muslim fascism. Indian writers in the Urdu language have been ordered to sign an oath of loyalty; apparently Urdu (one of the official languages of the Indian Union) is an anti-national language now. Why not simply, you know, ban it outright?
The next date to watch is 19th May, when the results of multiple state elections will be declared. If the Hindunazis are successful, they will assume their tactics are working, and will continue with them. If, as I anticipate, they are badly defeated everywhere, they will conclude they are not being fascistic enough, and will intensify their campaign of hatred. The effete, corrupt Congress will in either case merely try to protect the dynasty, and wait for 2019 and a fresh shot at power.
This has been your latest report from Hindunazistan. Stay tuned for fresh bulletins as and when they become available.