Dossier on Montek Singh Ahluwalia filed with CM 1223/ 2013 in W.P. (Civil) 1280/ 2012 in the Delhi High Court

Annexure P-3 to CM 1223/ 2013 in W.P. (Civil) 1280/ 2012 

Conflict of Interest and Corruption involving Mr Montek Singh Ahluwalia

By Seema Sapra

1.      Mr Montek Singh Ahluwalia is the Deputy Chairman of the Planning Commission and sits in all Cabinet meetings and is invited to all Government of India Committee meetings on economic and financial policy matters. He issues press/ public statements everyday on almost every economic policy matter of the Central Government. He has been charged with having a finger in every pie. A study of his press statements and news reports about the Planning Commission discloses the latter’s interference in government matters of several ministries. The Planning Commission is de-facto interfering in government matters, processes and decisions that fall within the domain of Central government ministries. Mr Montek Singh Ahluwalia’a statements on government policy and on executive decisions are capable of and in fact affect stock prices of firms listed in India and overseas. 

2.      Mr Montek Singh Ahluwalia’s elder son, Mr Pavan Ahluwalia has worked with McKinsey, and later with a Hedge Fund (Old Lane) established by Mr Vikram Pandit and subsequently taken over by Citigroup.

3.      Mr Pavan Ahluwalia presently manages an India based/ focused hedge/investment fund (Laburnum Capital) that is registered with SEBI as a portfolio manager. This hedge fund was established in 2009 with assets under management (AUM) exceeding Rs. 100 crore. The assets under present management with Laburnum Capital are most likely significantly higher than Rs. 100 crore.

4.      Laburnum Capital operates in complete secrecy with no public disclosure of the source or destination of the large amounts of funds moving in and out of its accounts. The website of Laburnum Capital claims that it manages investments for several high-net worth Indians, business houses, corporate and business families.  

5.      A court document filed for Mr  Rajat Gupta’s sentencing hearing before the United States District Court refers to an admission by Mr Pavan Ahluwalia of his close relationship with his former boss at McKinsey (Rajat Gupta) who has also invested funds with Mr Pavan Ahluwalia in Laburnum Capital.

6.      Mr Pavan Ahluwalia’s entire career has placed him in conflict of interest situations with his father, Mr Montek Singh Ahluwalia’s career and role in the Indian government. After graduating from Princeton, Mr Pavan Ahluwalia appears to have worked with McKinsey both in New York and in India. The time period includes the late 1990s and the first half of the 2000s. At this time, Mr Pavan Ahluwalia possessed a basic economic degree. During this time, Rajat Gupta was heading McKinsey and McKinsey made significant inroads into Indian policymaking with government engagements at both the Central and State levels and with significant private business engagements focused on India. (Rajat Gupta left McKinsey in 2007.) There are documented reports that during this period, Mr Montek Singh Ahluwalia was a strong supporter of McKinsey in India and actively recommended McKinsey’s highly priced consulting services to several government departments/ ministries (see Deccan Herald report dated September 24, 2004). Mr Montek Singh Ahluwalia had even appointed McKinsey on official Planning Commission committees in 2004 for a mid-term appraisal of the 10^th plan. During this time, Mr Pavan Ahluwalia was employed by McKinsey and received a lucrative salary.

7.      McKinsey’s private clients at any given time are kept confidential.

8.      During the time that Mr Pavan Ahluwalia worked for McKinsey, Mr Rajat Gupta developed and enjoyed unrestricted access to top Indian government functionaries including to the Prime Minister, Mr Manmohan Singh. 

9.      In 2005, Mr Pavan Ahluwalia obtained a graduate degree from Harvard Business School after leaving McKinsey.

10.  A document in Rajat Gupta’s sentencing hearing (Case 1:11-cr-00907-JSR Document 123 Filed 10/17/12) contains the following statement from Mr Pavan Ahluwalia:

“Pavan Ahluwalia, who in 2006 was being recruited to return to McKinsey from

graduate school, writes that “[a]t the insistence of [a] McKinsey partner, I had a telephone conversation with Rajat, expecting to have to defend my reasons for not returning to the firm. To my considerable surprise, he listened intently, understood why I was making the decision I was making [not to return], and told me that he objectively thought it was the correct decision for me. Rather than try to ‘sell’ his firm, or score a point in the recruiting process . . . he was able to put my own concerns front and center and evaluate the decision from my perspective.

“Over the years that followed . . . I found him to be and incredibly generous and wise mentor. . . . [H]e went out of his way to introduce me to people, and when I decided to start my own investment firm, he became one of my first investors, as he had been for several young McKinsey alumni starting off on their own.

“Rajat never once mentioned money or wealth creation while discussing either his own involvement in principal investing or my career choices.”

11.  This statement shows that Mr Rajat Gupta continued to be “incredibly generous in helping Mr Pavan Ahluwalia’s career even after the latter left McKinsey by introducing him to important people and by even investing funds with Mr Pavan Ahluwalia’s investment firm, Laburnum Capital.

12.  In 2006, after graduate school, Mr Pavan Ahluwalia joined Old Lane, a hedge fund launched by Mr Vikram Pandit, who would later head Citigroup. Old Lane was subsequently acquired by Citigroup.

13.  Old Lane had substantial India focused investments/ activities during the time that Mr Pavan Ahluwalia was employed by Old Lane.

14.  One significant investment by Old Lane in India was in the Maytas group, a group affiliated to the scam ridden Satyam group. Maytas won the lucrative contract for the Hyderabad metro soon after Old Lane’s investment in Maytas. The contract for the Hyderbad metro awarded to Maytas was later disclosed as a scam and Mr Montek Singh Ahluwalia’s role in the formulation and award of this contract has been highlighted in his lack of adequate response to Mr E Sreedharan’s letter highlighting serious concerns with this contract. A document filed in Writ Petition No 18483 of 2008 in the Andhra Pradesh High Court challenging this contract refers to a letter dated 25 July 2008 written by Mr Montek Singh Ahluwalia to the Prime Minister (Dr Manmohan Singh) that disclosed that Mr Montek Singh Ahluwalia anticipated the award of the contract to Maytas even before the successful bidder was formally announced.

15.  Old Lane also invested in the KVK group of companies (KVK Energy and Infrastructure) which was awarded the 1,200Mw KVK Nilachal power project in Orissa. Old Lane funds were also used by Hyderabad-based KVK Energy and Infrastructure Ltd (KEIL) to buy back all the Rs 45 crore equity (25.5%) held by the troubled Maytas Infra in KVK Nilachal Power Ltd after concerns were raised about Maytas stake in the power project. KVK raised Rs 106 crore from Old Lane India Opportunities Fund in October 2007 and later raised an additional US$20 million from Old Lane (approximately Rs 100 crore).

16.  KVK Nilachal first signed an MoU with the Orissa state government on September 26, 2006 for 600 MW, which was enhanced to 1200 MW through the supplementary MoU signed on October 17, 2008 for setting up the power plant at Rahangol village in Cuttack district at a cost of Rs 5,000 crore. KVK Nilachal was to finally set up three units of 350 MW coal-fired power plant at a total cost of Rs 4,500 crore. Mr Hari Aiyer was appointed as nominee director on the Board of KVK Energy. He was a Founder-Member of Old Lane Partners, and also Chairman & Advisor, India Opportunities Advisors Pvt. Ltd., and the Indian Advisor for Old Lane India Opportunities Fund.

17.  Mr Hari Aiyar is also the Managing Partner of Build India Capital Advisors (BIC). Citi’s joint venture India infrastructure business, was according to its website, established to seek long-term capital growth potential within India’s Infrastructure sector by managing the risks particular to greenfield/brownfield development infrastructure projects. The website of Build India Capital Advisors states: “Driven by high demand, financing shortages and implementation constraints, BIC’s investment team, which possesses extensive investment expertise in major sub-sectors such as power, roads, ports/logistics, airports, development of land and real estate infrastructure, believes there is a unique opportunity for investments within India’s burgeoning private sector.”

18.  Old Lane had special Indian focussed funds including the Old Lane India Opportunities Fund, established in July 2006, and sized at $518 million with a 10-year life. This fund was dedicated for long-term investment opportunities in India, primarily in the infrastructure and real estate sectors. There was an Old Lane Mauritius fund for investments into India.

19.  There is no transparency about whose money was being invested in India by Old Lane and also about what contributions and deals resulted from Mr Pavan Ahluwalia’s employment at Old Lane. There is also no transparency about the compensation that Mr Pavan Ahluwalia earned from Old Lane during his time there.

20.  Mr Montek Singh Ahluwalia has been a significant and very vocal proponent of private investment in Indian infrastructure in his capacity as a policymaker and as participant in important infrastructure related executive decisions for the government of India. Yet for the last seven years, he has been in direct conflict of interest situations on account of his son, Mr Pavan Ahluwalia roles at Old Lane and later at Laburnum Capital.

21.  Old Lane (which was set up in 2006) was acquired by Citigroup in 2007 and if Mr Pavan Ahluwalia worked for Old Lane between 2007 and 2009 (as it appears he did), then Pavan Ahluwalia was, during this period, a Citigroup employee.

22.  In 2007, Mr Montek Singh Ahluwalia was appointed to the Group of 30. (Mr Montek Singh Ahluwalia has since then left this group.) Established in 1978, the Group of Thirty is a “private, nonprofit, international body composed of very senior representatives of the private and public sectors and academia.” Its stated aim is “deepen understanding of international economic and financial issues, to explore the international repercussions of decisions taken in the public and private sectors, and to examine the choices available to market practitioners and policymakers.” The groups website describes its influence as impacting “the current and future structure of the global financial system by delivering actionable recommendations directly to the private and public policymaking communities.” This association with the Group of 30 by Mr Montek Singh Ahluwalia also raises conflict of interest concerns.

24.  A January 4, 2007 Asian Age news report reported that Mr Montek Singh Ahluwalia at that time was also a member of the Commission on Growth and Development set up by
the World Bank and the Institute of International Finance (The Global Association of Financial Institutions). According to the Asian Age report the “Institute of International
Finance has included Dr Ahluwalia in the group of trustees for overseeing the "principles for stable capital flows and fair debt restructuring in emerging markets". The Commission on Growth and Development (informally known as the Growth Commission) is described on the website of the World Bank in the following terms:

“Launched in April 2006, the Commission on Growth and Development brings together twenty-two leading practitioners from government, business and the policymaking arenas, mostly from the developing world. The Commission is chaired by Nobel Laureate Michael Spence, former Dean of the Stanford Graduate Business School, and Danny Leipziger, former Vice-President, World Bank, is the Commission's Vice-Chair.

Over a period of four years the Commission sought to gather the best understanding there was about the policies and strategies that underlay rapid and sustained economic growth and poverty reduction. The Commission's audience is the leaders of developing countries.

The Commission was supported by the Governments of Australia, Sweden, the Netherlands, and United Kingdom, the William and Flora Hewlett Foundation, and the World Bank.

Motivation

The Commission has been brought together by the belief that the world's challenges - poverty, environment, misunderstandings within and between nations, vast differences in living standards within and across countries - are best met in conditions of rising and sustained prosperity, and expanding economic opportunities.

The Commission was established "to take stock of the state of theoretical and empirical knowledge on economic growth with a view to drawing implications for policy for the current and next generation of policymakers."

…

The Commission was funded by the William and Flora Hewlett Foundation, the governemnts of Australia, Netherlands, Sweden, and the United Kingdom, and the World Bank.”

25.  While Mr Montek Singh Ahluwalia’s participation in the Commission on Growth and Development raises certain questions about whether he obtained prior Government authorisation and whether his participation was in his personal capacity or as a representative of the Government of India, Mr Montek Singh Ahluwalia’s association with the Institute of International Finance was clearly a case of conflict of interest and more so, because his son – Mr Pavan Ahluwalia, was at that time employed by Vikram Pandit/ Citigroup. 

26.  The mission statement of the Institute of International Finance (of which Citigroup would be a constituent) reads:

The Institute of International Finance, Inc. (IIF), is the world’s only global association of financial institutions. Created in 1983 in response to the international debt crisis, the IIF has evolved to meet the changing needs of the financial community. Members include most of the world’s largest commercial banks and investment banks, as well as a growing number of insurance companies and investment management firms. Among the Institute’s members are commercial and investment banks, sovereign wealth funds, asset managers, hedge funds, insurance companies, multinational corporations, law firms, export credit agencies, multilateral agencies, development banks, and other organizations providing products and services to financial services community. The Institute currently has over 450 members headquartered in more than 70 countries in Africa, the Middle East, North and South America, Europe, and Asia.

Mission

The Institute of International Finance is committed to being the most influential global association of financial institutions. We strive to sustain and enhance our distinctive role on the basis of the professional excellence of our research, the unmatched breadth of our membership, our extensive relationships with policymakers and regulators, and the strength of our governance.

Our mission is to support the financial industry in prudently managing risks, including sovereign risk; in developing best practices and standards; and in advocating regulatory, financial, and economic policies that are in the broad interest of our members and foster global financial stability.

Main Activities

In fulfilling this mission, the IIF’s main activities are to:

· Provide high-quality, timely, and impartial analysis and research to our members on emerging markets and other central issues in global finance.

· Systematically identify, analyze, and shape regulatory, financial, and economic policy issues of relevance to our members globally or regionally.

· Develop and advance representative views and constructive proposals that influence the public debate on particular policy proposals, including those of multilateral agencies, and broad themes of common interest to participants in global financial markets.

· Work with policymakers, regulators, and multilateral organizations to strengthen the efficiency, transparency, stability and competitiveness of the global financial system, with an emphasis on voluntary market-based approaches to crisis prevention and management.

· Promote the development of sound financial systems, with an emphasis on emerging markets.

· Provide a network for members to exchange views and offer opportunities for effective dialogue among policymakers, regulators, and private sector financial institutions.

· Define, articulate, and disseminate best practices and industry standards in such areas as risk management and analysis, disclosure, corporate governance and regulatory compliance.

· Support education and training efforts of our members in priority areas.”

27.  The Public Health Foundation of India is another example of unsavoury and undesirable links between McKinsey and Mr Montek Singh Ahluwalia. There are several controversies surrounding the PHFI which are not covered by this note. PHFI’s bank account is with Citibank. PHFI’s status as a public authority or a private entity is in doubt. The CIC has called PHFI a public authority and stated that a contrary opinion would cast doubt on the integrity of public officials on the PHFI board like Mr Montek Singh Ahluwalia. The PHFI itself contended that Mr Montek Singh Ahluwalia was part of PHFI in his private capacity. The constitution of PHFI raises many conflict of interest questions quite apart from Mr Montek Singh Ahluwalia.

28.  According to its website, PHFI’s legal status is as follows:

“The Public Health Foundation of India (“PHFI”/ “the Foundation”) was registered under the Societies Registration Act, 1860 vide registration certificate number 54840 dated 8 February 2006.

PHFI has been granted an exemption under section 12A of the Income Tax Act, 1961, vide letter number DIT(E)/12A/2005-06/P-1044/05/313 dated 16 June 2006. The Foundation has also obtained exemption u/s 80G(5)(vi) of the Income Tax Act, 1961.

The Foundation has been registered under the Foreign Contribution (Regulation) Act, 1976 for carrying out activities of social nature with registration number 231660927 dated 26 September 2008.

PHFI has been registered as a Scientific and Industrial Research Organisation (SIRO) by the Department of Scientific and Industrial Research under the Scheme on Recognition of Scientific and Industrial Research Organisations (SIROs), 1988 Vide No. 14/482/2008-TU-V dated 23 April, 2011 for the period from 1 April 2011 to 31 March 2014.”

29.  OECD guidelines titled “Managing Conflict of Interest in the Public Service” dated 2003, recognize that family interests can create a potential conflict of interest situation for public officials. Reproduced below are extracts from these OECD guidelines:

“A “conflict of interest” is:

A conflict between the public duty and private interests of public officials, in which public officials have private-capacity interests which could improperly influence the performance of their official duties and responsibilities.

A sound conflict-of-interest policy pays particular attention to:

● Policy-makers and public office holders working in the most senior positions.

The financial or pecuniary interests of officials are generally considered as the principal causes of conflict of interest. However, a forward-looking policy should also describe examples of other causes, such as related-party business undertakings, personal relationships and non-financial personal interests that can be relevant in a very complex public sector environment. In addition, affiliations with for-profit or non-profit organisations, or with political or professional organisations, can also give rise to new and difficult examples of conflict. Public organisations have the primary responsibility to define particular situations and activities that are incompatible with their public function.

Organisational procedures should enable public officials to identify and disclose relevant private interests that potentially conflict with their official duties. Such procedures should make public officials aware that they must promptly disclose all relevant information about a conflict when taking up office (initial disclosure), and later, when relevant circumstances change (inservice disclosure). An effective disclosure process ensures that the responsibility for providing sufficient details on the conflicting interest rests with individual officials, and this requirement is explicitly communicated in employment and appointment arrangements and contracts.

Organisations need to consider reviewing existing management arrangements on a regular basis, to assess whether they remain adequate in recognizing potential risk areas. Changing practices and expectations, for example in areas such as additional employment and “outside” appointments, post-public employment, use of “inside” information, public contracts, new forms of gifts and other benefits, and different family and community expectations in a multicultural context, can generate new forms of risk.

New forms of relationship have developed between the public sector and the business and non-profit sectors, giving rise for example to increasingly close forms of collaboration such as public/private partnerships, selfregulation, interchanges of personnel, and sponsorships. New forms of employment in the public sector have also emerged with potential for changes to traditional employment obligations and loyalties. In consequence, there is clearly an emerging potential for new forms of conflict of interest involving an individual official’s private interests and public duties, and growing public concern has put pressure on governments to ensure that the integrity of official decision-making is not compromised.

While a conflict of interest is not ipso facto corruption, there is increasing recognition that conflicts between the private interests and public duties of public officials, if inadequately managed, can result in corruption. The proper objective of an effective conflict-of-interest policy is not the simple prohibition of all private-capacity interests on the part of public officials, even if such an approach were conceivable. The immediate objective should be to maintain the integrity of official policy and administrative decisions and of public management generally, recognising that an unresolved conflict of interest may result in abuse of public office.

This objective can generally be achieved by ensuring that public bodies possess and implement relevant policy standards for promoting integrity, effective processes for identifying risk and dealing with emergent conflicts of interest, appropriate external and internal accountability mechanisms, and management approaches – including sanctions – that aim to ensure that public officials take personal responsibility for complying with both the letter and the spirit of such standards.

A “conflict of interest” involves a conflict between the public duty and private interests of a public official, in which the public official has private-capacity interests which could improperly influence the performance of their official duties and responsibilities.

           

Where a private interest has in fact compromised the proper performance of a public official’s duties, that specific situation is better regarded as an instance of misconduct or “abuse of office”, or even an instance of corruption, rather than as a “conflict of interest”.

In this definition, “private interests” are not limited to financial or pecuniary interests, or those interests which generate a direct personal benefit to the public official. A conflict of interest may involve otherwise legitimate private-capacity activity, personal affiliations and associations, and family interests, if those interests could reasonably be considered likely to influence improperly the official’s performance of their duties. A special case is constituted by the matter of post-public office employment for a public official: the negotiation of future employment by a public official prior to leaving public office is widely regarded as a conflict-of-interest situation.

Public officials should avoid private-capacity action which could derive an improper advantage from “inside information” obtained in the course of official duties, where the information is not generally available to the public, and are required not to misuse their position and government resources for private gain.

Supporting transparency and scrutiny

● Public officials and public organisations are expected to act in a manner that will bear the closest public scrutiny. This obligation is not fully discharged simply by acting within the letter of the law; it also entails respecting broader public service values such as disinterestedness, impartiality and integrity.

● Public officials’ private interests and affiliations that could compromise the disinterested performance of public duties should be disclosed appropriately, to enable adequate control and management of a resolution.

● Public organisations and officials should ensure consistency and an appropriate degree of openness in the process of resolving or managing a conflict-of-interest situation.

● Public officials and public organisations should promote scrutiny of their management of conflict-of-interest situations, within the applicable legal framework.

More focused examples of unacceptable conduct and relationships should be provided for those groups that are working in at-risk areas, such as the public-private sector interface, government procurement, regulatory and inspectorial functions, and government contracting. Specific attention needs to be given to functions which are subject to close public scrutiny or media attention.

Review “at-risk” areas for potential conflict-of-interest situations

a) Additional employment – Define the circumstances, including the required authorisation procedures, under which public officials may engage in ancillary (“outside”) employment while retaining their official position.

b) “Inside” information – Make sure that information collected or held by public organisations which is not in the public domain, or information obtained in confidence in the course of official functions, is understood to be privileged, and is effectively protected from improper use or disclosure.

c) Contracts – Consider the circumstances in which the preparation, negotiation, management, or enforcement of a contract involving the public organisation could be compromised by a conflict of interest on the part of a public official within the public organisation.

d) Gifts and other forms of benefit – Consider whether the organisation’s current policy is adequate in recognising conflicts of interest arising from traditional and new forms of gifts or benefits.

e) Family and community expectations – Consider whether the organisation’s current policy is adequate in recognising conflicts of interest arising from expectations placed on public officials by their family and community, especially in a multicultural context.

f) “Outside” appointments – Define the circumstances, including the required authorisation procedures, under which a public official may undertake an appointment on the board or controlling body of, for example, a community group, an NGO, a professional or political organisation, another government entity, a government-owned corporation, or a commercial organization which is involved in a contractual, regulatory, partnership, or sponsorship arrangement with their employing organisation.

g) Activity after leaving public office – Define the circumstances, including the required authorisation procedures, under which a public official who is about to leave public office may negotiate an appointment or employment or other activity, where there is potential for a conflict of interest involving the organisation.”

“Where an official has failed to declare a relevant interest situation, or has allowed a conflict-of-interest situation to continue unresolved, or has in fact allowed a private-capacity interest to improperly influence the performance of their duties, the definition provided by the Guidelines encourages clarification of what is actually at stake. For example, where the official concerned has failed to declare a relevant interest, the draft Guidelines suggest that such a situation would be better regarded as an instance of misconduct, and not as a simple “conflict of interest”. By contrast, where an official has acted improperly or corruptly so as to receive a bribe or to give an illegitimate advantage to a family member (etc.), it would be preferable to treat the matter as “abuse of office”, or as corruption (depending on the specific circumstances), rather than as a conflict-of interest situation, even though a conflict of interest was fundamental to the corrupt conduct.

In this definition, “private interests” are not limited to financial or pecuniary interests, or those of direct personal benefit to the official. Personal affiliations or relationships, debts and other obligations, religious or ethnic associations, professional and party-political alignments, and family interests, may come within the scope of the definition if those interests could reasonably be considered as likely to influence improperly the official’s performance of their duties.”

30.  Several OCED countries also include extra-occupational activities within the definition of a potential conflict of interest.

31.  Another example of conflict of interest involves Dr Isher Ahluwalia who is married to Mr Montek Singh Ahluwalia. Dr Isher Ahluwalia was appointed Chairperson of a government committee constituted in May 2008 called the High Powered Expert Committee for estimating the investment requirements for urban infrastructure services. The final report was released in March 2011. The McKinsey Global Institute published a report in April 2010 titled “India’s urban awakening: building exclusive cities, sustaining economic growth”. This report was described as the result of a study also commenced by McKinsey in 2008 The McKinsey report thanked members of McKinsey’s academic advisory committee for this project which included Dr Isher Ahluwalia and three others. The McKinsey report attracted a lot of publicity for McKinsey and presumably resulted in several new business engagements. Dr Isher Ahluwalia’s contemporaneous association with and advice to McKinsey’s project on urban development while she was Chairperson of a High Powered Government of India Expert Committee for estimating the investment requirements for urban infrastructure services was a clear case of conflict of interest.

32.  Mr Montek Singh Ahluwalia’s younger son, Mr Aman Ahluwalia is a lawyer practicing in Delhi. Mr Aman Ahluwalia’s wife, Ms Shilpa Mankar, is also a lawyer and is a partner in the Banking practice at the law-firm, Amarchand Mangaldas. This family connection again raises a conflict of interest concern regarding Mr Montek Singh Ahluwalia as he plays a key role in formulating and implementing banking and financial policies in the Government of India.

33.   Even more curious is Mr Montek Singh Ahluwalia’s association with the International Center for Alternative Dispute Resolution (ICADR). ICADR functions under the Ministry of Law & Justice, Department of Legal Affairs, Government of India. The ICADR website introduces the organization as follows:

“The justice dispensing system in India has come under great stress for several reasons, chief of them being the huge pendency of cases in courts underlining the need for Alternative Dispute Resolution (ADR) methods. The Government of India thought it necessary to provide a new forum and procedure for resolving international and domestic commercial disputes quickly.

The ICADR is an autonomous organization working under the aegis of the Ministry of Law & Justice, Govt. of India with its headquarters at New Delhi and Regional Centres at Hyderabad and Bengaluru. The Regional Centres of ICADR are fully funded and supported by the respective State Governments.

The Chief Justice of India is the Patron of ICADR. At the regional level, the Chief Justice of the concerned High Court is the Patron of the Regional Centre of ICADR. Dr. H.R.Bhardwaj, Former Union Minister for Law & Justice, Government of India is the Chairman of ICADR. The Governing Council of ICADR comprises of several eminent personalities drawn from various fields.”

34.   The Governing Council of ICADR comprises of a long list of persons including Mr Montek Singh Ahluwalia, some well-known and influential lawyers, and the law Secretary. Mr Montek Singh Ahluwalia’s presence in the governing council of ICADR is very surprising. It appears that Mr Montek Singh Ahluwalia is extending his influence into legal circles in order to help his son, Mr Aman Ahluwalia’s career as a lawyer.

35.  Even a cursory survey of news reports about Mr Montek Singh Ahluwalia (who incidentally garners more press coverage than any of his colleagues in the Government of India including the Prime Minister) shows that Mr Montek Singh Ahluwalia routinely comments on/ lobbies for government policy issues and government decisions that do not fall within his domain as Deputy Chairman of the Planning Commission. Several of such interjections by Mr Montek Singh Ahluwalia raise conflict of interest concerns. 

36.  Mr Montek Singh Ahluwalia uses official government resources for his extra-occupational activities and for his private interests including those of his immediate family.

37.  As an example, during a trip to the United States in June 2009 (around the time that Mr Pavan Ahluwalia was engaged in transitioning from Old Lane to his own investment firm, Laburnum Capital), Mr Montek Singh Ahluwalia addressed investors in New York as part of a USIBC meeting (See Business Standard article dated June 29, 2009).  Mr Montek Singh Ahluwalia had travelled to Washington DC to participate in a meeting of the High Level Commission on the Modernization of World Bank Group Governance. Addressing investors and asking them to invest in India is not the job of the Deputy Chairman of the Planning Commission. It would be relevant to determine how many of the investors addressed by Mr Montek Singh Ahluwalia during this trip invested in his son, Mr Pavan Ahluwalia’s hedge fund.

38.  Mr Montek Singh Ahluwalia’s role in approving the Enron Dabhol project (for which act of corruption the Indian exchequer continues to pay the price) has already been highlighted.

39.  The Government of India and Indian citizens should note that while Mr Montek Singh Ahluwalia touts private investment in Indian infrastructure, his own son, Mr Pavan Ahluwalia is the direct beneficiary of such investment opportunities for the private sector in Indian infrastructure. The Planning Commission under Mr Montek Singh Ahluwalia set up a High Level Committee on Financing Infrastructure. This Committee proposed that private equity funds and venture capitalists could be permitted to be part of bidding consortia for infrastructure projects. Again Mr Pavan Ahluwalia runs such a private equity fund and Mr Montek Singh Ahluwalia’s role involves clear conflict of interest and corruption.

40.  Even Mr Pavan Ahluwalia’s engagement under a World Bank funded Project on privatization of water supply in Delhi several years ago was the subject of conflict of interest concerns because of Mr Montek Singh Ahluwalia’s connections to the World Bank.

41.  Mr Montek Singh Ahluwalia has throughout his career displayed a brazen attitude towards and has openly flouted basic principles of good governance and conflict of interest. His conduct would never have been tolerated in an OECD country with their strict laws about conflict of interest and public officials.