Enron Case & And Chidambaram

ONE VERY COSTLY UPA SCAMS

SARASIJ MAJUMDER

This was when Chidambaram ensured that Vajpayee Government had to pay $300MM to corrupt Multinational as fine, for an unacceptable contract.

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The Life of P Chidambaram has been mired with too many controversies; one such case is the Dabhol Power Company case or what is known as the Enron case in popular media stories. In Western World, people like similar records are rotting in JAIL.

In 1992, Enron proposed to setup 2,184 MW  power plant at Dabhol, Ratnagiri.  Initially,  for the first phase, it was to use NAPTHA as fuel, and later, as per the contract, LNG for the project would be imported from Qatar and produced electricity will be purchased by Maharashtra government for 20 years. American companies namely Enron, GE and Bechtel were majority shareholders in the company which got ‘sovereign guarantee’ for the project by bribing ministers and government officials of INDIA. The Shard Pawar led government agreed to buy electricity from the Dabhol Power plant and provided state guarantee to the power project. The whole CONTRACT was lopsided towards contractor, with unsustainable very  high tariff to be paid by Maharashtra for purchasing Electricity. Too many GUARANTEES signed!!

But in 1995, Shiv Sena BJP alliance government came to power and the project was reviewed, and found to be inefficient, and very costly. The government refused to buy electricity from the company as the agreed rates were very high. The company took the case to court and P Chidambaram became legal advisor to Enron. But because the ‘sovereign guarantee’ given by Congress government ensured that the state has to pay for maintenance of the plant even if it does not purchase power. Chidambaram was paid a ‘hefty fee’ in return to advice to the company which was fighting against the government. Enron was a highly controversial company and had an abysmal global reputation for corruption. The company became eventually bankrupt. But Chidambaram continued to advice the company in exchange of a fat wad of money.

As per Vanderbilt Journal of Transnational Law, “there were allegations that India’s Commerce Minister P. Chidambaram had “strongly supported Enron’s Dabhol power project in public forums in India and abroad without disclosing the fact that he was paid for providing legal opinion to Enron,” and that “Enron had paid Mr. Chidambaram a ‘substantial fee’ when he was practicing law in between holding two Cabinet posts.”

Enron took the case to International Court of Justice in 2002 when Atal Bihari Vajpayee was in power and the government appointed Harish Salve as Indian representative.

But soon UPA government came to power in 2004 and Chidambaram was appointed as the finance minister. Chidambaram officially resigned from the case before being appointed as finance minister but a Pakistani origin lawyer named Khawar Qureshi, who was to become Pakistan’s counsel in Kulbhushan Jadhav case, was appointed to present Indian side at ICJ.

Qureshi was appointed in 2004 and he took less than a year to lose the case. India was made to pay millions of dollars to foreign multinationals. The government had to pay 160 million dollars to Bechtel and 145 million dollars to General Electric. These companies had bought 65 percent stake of Enron in 2004 after the company went bankrupt.

Salve who represented India from 2002-2004 said, “I thought we had a pretty good defence. But again, I am talking about 2002-04. So, I thought it was a pretty good case. But, memory fades and then there was change of lawyer, then I have absolutely no idea of what happened.”

P Chidambaram is in the first finance minister of India to face probe in financial irregularities by any investigation agencies. He certainly disgraced himself, and lowered  the sanctity of the post of finance minister. There could not be anything worse than a country’s finance minister to be involved in several financial crimes. He was  involved in many other illegalities including changing the affidavit in the Ishrat Jahan encounter, creating the myth of saffron terror, Aircel Maxis scam, and 2G scam.\ There may be some other cases as well which didn’t see the light of the day.

There are very very strong Circumstantial evidences of corruption against him. He is a very cunning fellow knowing the loopholes of LAW, and financial transactions in layered manner.  He could manage to evade prosecution, and the due punishment. His crime was to cheat the country financially for personal gain by a very large amount,  in alliance with ENRON, and through various other scams.

CHIDAMBARAM  made money when Dabhol of ENRON was borne, as well as when ENRON died.

Sources:-- While working in EIL, I was associated with the technical review committee after the court case completed for the plant’s revival , and subsequent operations of DPP. I read  the  complete contract document, and court case reports. NTPC was looking after power generation part after ENRON left, and plant ownership transferred. I visited the plant couple of times.

The whole information is now in PUBLIC DOMAIN.