Toronto Star newspaper’s Asia Bureau chief Rick Westhead writes that Canadian businessman Mir Ali says he’s being extorted by an Indian cabinet minister who allegedly demands a bribe in exchange for a government contract.
NEW DELHI—Authorities in the central Indian state of Chhattisgarh are investigating charges by a Canadian businessman that a senior cabinet minister is involved in a major corruption racket over highway construction contracts.
Mir Ali, a 42-year-old engineer who graduated from Carleton University and once worked for the City of Ottawa, CN Rail and Canadian engineering giant SNC Lavalin, alleges that Brij Mohan Agrawal, the minister of surface transport in Chhattisgarh, has:
• demanded a $1 million bribe,
• threatened his family,
• warned he will ruin Ali’s company and with it the $44 million contract to rebuild a highway through the Indian state.
A spokesman for Chhattisgarh Chief Minister Raman Singh told the Star after reviewing Ali’s complaint, the state government would explore Ali’s allegations. “There will be an investigation and follow up,” Arun Bisain, Singh’s spokesman, said.
Baijendra Kumar, principal secretary of the Chhattisgarh government, said the inquiry by the state’s public works department could take a week to 20 days.
Agrawal, the minister who is a member of India’s right-wing Bharatiya Janata Party, responded to an email about the allegations: “Sorry, I don’t know?? about this matter, thanks.”
The Canadian government has also become involved. An official with the Canadian High Commission in New Delhi informed Ali on Thursday that it would contact Singh to discuss Ali’s charges.
His plight is a familiar one in modern India. Corruption has stifled optimism over this booming nation’s economic coming of age. Foreign investment is slowing, and analysts speculate one major reason is because companies find it unwieldy dealing with corruption.
India ranks 87th out of 178 nations in Transparency International’s 2010 corruption perception survey, meaning that other developing countries such as China, Columbia and Rwanda are considered less corrupt.
In recent months, India has been abuzz over a massive telecom scandal that cost the government an estimated $40 billion, and another that saw war widows cheated out of public housing.
The former minister in charge of last year’s Commonwealth Games is in prison after being charged with financial irregularities related to the biggest sports event India has ever hosted.
Just this week, the chief minister of India’s Karnataka state was forced to resign after a judge accused him of taking bribes from companies in exchange for favourable mining contracts. More than 100 companies and 600 government employees have been accused of conspiring in that case, according to the state’s anti-corruption ombudsman.
Still there are success stories and several large Canada-based firms have enjoyed years of operations in India. Sun Life Insurance, for instance, is in a joint venture that places it among India’s biggest life insurance providers, while CAE Inc. runs one of India’s largest flight simulator training programs.
And there are also signs of progress.
The chief minister of Kerala state in south India, for instance, recently installed a live web camera in his office that runs a live video stream 24 hours a day. It’s a measure, the minister says, to fight corruption.
Ali’s allegations could not be independently verified by the Star. His story begins last summer when his company SuperBuild India won a $44 million contract to improve 71 kilometres of India’s National Highway 221 — a stretch of road in Chhattisgarh that cuts through territory controlled by Maoist insurgents.
He agreed to post a $4 million guarantee that the project would be completed within 30 months and would stand up to heavy traffic use and India’s monsoon for at least two years. The guarantee was placed in an escrow account controlled by the state.
On Oct. 1, 2010, Ali’s company began work on the highway. Concrete mixers, crushers and graders were moved in and trenches cut for eight kilometres of road.
After the project’s preliminary work was completed, Ali says armed men approached his workers and told them they would be killed if they continued.
One of Ali’s employees, a retired Indian army colonel named V.C. Subramanyam, was allegedly stripped bare and beaten, Ali said. SuperBuild’s equipment was set on fire, although no one was charged.
R.B. Mangrulkal, a senior engineer for the state of Chhattisgarh, said Ali’s work was stopped by the state in January because of “poor quality.”
For months, Ali said he navigated local government channels before finally securing a meeting on April 11, 2011, with Agrawal and his personal aide, Prakash Upadhyay.
“You’ll never see a minister here take money himself,” Ali said. “The cash always is going through their personal assistants or relatives of friends who can’t be traced and forget about trying to catch them on tape discussing the bribe. They only agreed to meet me after midnight in Agrawal’s office and made sure I had no phone, no pen, no shoes, nothing that could hold a recorder.
“The minister flat out told me that he wanted 3 per cent of the contract because I was playing games with him by not coming earlier,” Ali said. “I said there was no way I could afford that, and he said he has to agree to take 2 per cent because I had come from overseas to do work here.”
Ali was told that if he didn’t pay Agrawal a bribe, his $4 million guarantee would be forfeited, ruining his credit line and effectively shutting down his business.
With Ali still refusing to pay, he said he was called for another late-night meeting on June 25 at Agrawal’s home.
“I said to the minister, ‘I’m an entrepreneur and I’m trying to do something in India for my family’,” Ali said. “The minister just said, ‘I don’t want to know any of this. You pay me the money only.’”
When Ali said he didn’t have the cash for the bribe, Agrawal allegedly suggested something else. Ali could give the minister the title to his house and a blank signed check.
Contacted by the Star, Upadhyay said “These allegations are all wrong and baseless.” He then hung up.
Despite a court order not to do so, the state has now taken $250,000 of Ali’s guarantees, he said.
The State Bank of India is now asking for the repayment of the guarantee, so Ali is searching for financing and trying to convince the government to do something about his case.
