Investment schemes – and particularly crooked investments schemes – are certainly nothing new.
— Investment schemes, particularly crooked investment schemes – are certainly nothing new. As get-rich-quick techniques, they are among the oldest in the book and, in the right hands, among the most effective. Any such scheme hinges on personalities, on convincing sales pitches, and on a general disregard for the people whose money are being invested. India – and, sadly, many of the people governing India is no stranger to this kind of behavior. Last year saw the implosion of one such scheme in the form of the Osian’s Art Fund, which still has yet to pay back the initial investments it collected through banks like ABM AMRO (now part of RBS).
Some background: The Osian’s Art Fund was launched in 2006 by Neville Tuli as an alternative forum for investment among high net worth individuals. Inspired by the sudden high prices of works by Indian artists in the worldwide secondary art market, the fund was to work like a mutual fund, except it would trade in a pool of valuable art works rather than a pool of stocks. Osian’s was the first such fund founded in India and was followed by several others over the following years.
Within a month of its launch, Osian’s had gathered more than Rs. 100 crore from over 650 investors in 39 cities across India. Many of these investors were encouraged by their banks to invest in the Osian’s scheme. With a 36-month lock-in, the Fund was meant to begin paying out dividends in 2009, with a payment period of just a few months. Now it’s 2014 and many investors are still waiting to receive their payouts. Some haven’t even recouped the money from their investments. Osian’s has since been declared a fraud and banned by the regulatory body the SEBI.
Banks like ABM AMRO/RBS were more than bystanders – they were active participants in a fraudulent investment scheme. At best, these banks and people running them, failed to do their due diligence, which is to say failed egregiously to do the most essential component of their jobs. At worst, they were complicit in what was effectively a Ponzi scheme. In either case, they are no less part of the broken system than the fraudulent fund itself.
It’s irresponsible, to say the least, to promise high returns on a form of investment without any precedent in a given market. It’s far beyond irresponsible to urge people to invest their money in a fund that can’t pass muster with regulatory boards. Everyone don’t need to have years of experience in banking to figure that out.
And yet the heads of these banks do have years of experience. Maybe that’s part of the problem: Like the Wall Street heads who brought America and the world to fiscal crisis, the heads of India’s major banks are part of an establishment that values money over honesty or decency, a bloodsucking system built on cronyism and quick personal gain rather than hard work and accountability.
It’s ironic, then, that Meera Sanyal, the person who in 2006 was acting CEO for ABM AMRO, the bank most frequently implicated in the Osian’s scheme, is today running for elections on a platform of transparency and ethics for the AAP.
The AAP has given India an interesting and exciting year, no doubt. The promises made by AAP leaders in Delhi – namely for a government free from systemic corruption and greed – were appealing to voters everywhere. The prospect of a new style of government swept the AAP to an enervating victory in Delhi. Many people across India saw that moment as a victory for transparency and accountability – and with good reason.
Everyone should be excited about the prospect of a government free from the greed and corruption that has begun to bring India’s miraculous growth to a halt. Corruption is worse than an annoyance: it could be a disaster. But successfully eliminating corruption will take a lot more than voting for a party that uses that gargantuan task as a talking point or platform.
A party can make promises, but it’s up to the people who constitute that party to make changes. It’s important to look carefully at each and every one of those people, the things they claim to stand for, and the things that they have, in fact, done.
The two don’t always match up.
Investment schemes – and particularly crooked investments schemes – are certainly nothing new. As get-rich-quick techniques, they’re among the oldest in the book and, in the right hands, among the most effective.
For more information about us, please visit http://www.IntelPrograms.com
Name: Ravi Shankar
Organization: Solution Answers
Release ID: 37631