The Nation: V Balasubramaniam; The Importance of Being Balu

Charged under the Official Secrets Act, the top Reliance man has embarrassed his employers and touched many raw nerves.

It is not often that a footnote overshadows the main text, certainly not if the main copy is as rivetting as the escapades of Romesh Sharma. Yet, as the lascivious point man of Dawood Ibrahim languished behind bars, informed circles were talking about its unintended consequence: the grounding of V. Balasubramaniam (Balu), India's foremost lobbyist and the Reliance Industries Limited (RIL) ambassador in Delhi.

For those who make it their business to know, the raid on Balu's New Friend's Colony residence on October 28 by Delhi's Joint Commissioner of Police Amod Kanth was an act of breathtaking audacity. Equally audacious was the decision to charge him under the Official Secrets Act which carries a minimum prison sentence of three years. Balu's alleged crime: possession of confidential government documents. These included:

If the seized documents (Balu's lawyer denies they were found in his client's office) were revealing, their recovery was a bit too much for even the police to stomach. Even Balu was stumped. When Sharma was arrested on October 21 in connection with the theft of a helicopter, he coolly informed the police that the papers were with Balu. It was, of course, the truth but it was a revelation that was also meant to convey a message. Unfortunately for Sharma, Kanth didn't bite. The police contacted Balu who, far from denying possession, invited them to collect the papers. He even insisted on a receipt.

The next week, Balu's cockiness took a severe beating. Following Sharma's disclosure during interrogation that he and Balu were business partners in at least two companies -- Reliance Developers and Investment Private Limited and Reliance Estate Private Limited -- the police raided Balu's home and office in Delhi's Meridien Hotel. Not that they were only concerned with property deals. Now singing like a canary, Sharma also told his inquisitors that his links with Balu date back to the late '80s. If Sharma is to be believed, he was then approached by Balu to help extricate Dhirubhai Ambani's son-in-law Raj Salgaonkar from a sticky situation. The Goa-based Salgaonkar had apparently been threatened by Dawood's henchman Abu Salem. Sharma claimed he phoned Salem in Balu's presence and resolved the matter. RIL "categorically denies any connections, contacts or dealings, directly or indirectly, with Romesh Sharma and/or any of his associates".

The police, which is excessively generous with information relating to the Sharma case, is uncharacteristically reticent about details of the seizures from the raids on Balu's residence. The grapevine, however, is buzzing. Ever willing to rush in where angels fear to tread, the indefatigable Janata Party MP Subramanian Swamy has said that sensitive and classified government documents "were loaded from the finance minister's office computers and sent to Mr Balasubramanian's e-mail address". Swamy claims that the "complete VDIS (Voluntary Disclosure of Income Scheme) list was sent to Dawood by Sharma for use in extortion".

Swamy's interventions are traditionally tinged with a degree of exaggeration. Nevertheless, if his suggestion that the police "found 42 computer floppies and diskettes containing voluminous secret government papers" is reverberating through the bush telegraph, it is because of the curious conduct of the police. First, the Balu case was transferred from Kanth's charge to the Delhi Police Crime Branch. There it festered fuelling predictable speculation. Admits Home Minister L.K. Advani, "The police have been somewhat hesitant." Last Thursday, Advani was requested by Delhi's police commissioner to transfer the Balu case to the CBI, the graveyard of many cases. He obliged.

That move hasn't stopped talk of the kid-glove treatment of Balu. Every person who has been charged under the Official Secrets Act has inevitably been arrested and interrogated in custody. In 1987, for example, RSS ideologue S. Gurumurthy was arrested in Chennai, brought to Delhi and made to be present during a raid on The Indian Express proprietor Ramnath Goenka's guest house in Sundar Nagar. He was detained for 12 days and charged under the Act for possession of a government document on textile policy. At that time, Gurumurthy was Goenka's ally in his battle with RIL. Likewise, Coomar Narain was arrested under the Act in 1985 on charges of procuring secret documents from the Prime Minister's Office. It led to the resignation of P.C. Alexander as Rajiv Gandhi's principal secretary. In the wake of the Larkins espionage case in 1985, Lt-Colonel Jasbir Singh was sentenced to two-years imprisonment for possessing an internal directory of the Ministry of Defence.

The Delhi Police has cited a Supreme Court judgement on the guidelines for arrest to explain its cautious approach in the Balu case. This has caused acute embarrassment to Home Minister Advani who has elevated the Sharma prosecution into a "test case" to demonstrate how the "Indian state has become so porous, frail and soft". Last Thursday, Advani instructed Home Secretary

B.P. Singh to ensure no unwarranted exceptions are made in Official Secrets Act cases. The CBI has promised speedy action in a "day or two".

If Balu is indeed arrested and interrogated in custody, it is certain to set the cat among the pigeons. At stake is not merely the formidable connections of the 61-year-old self-made man from Thanjavur in Tamil Nadu who rose from a clerk in Burmah Shell to the post of president (Delhi operations) of one of India's largest corporations with a turnover of Rs 13,400 crore. The reputation of RIL is involved. After all, Balu was no ordinary employee indulging in a bit of hanky-panky on the side. He was a trusted -- some say the most -- confidant of the Ambani family, with an association dating back to 1974. He was their eyes and ears in Delhi, the person who knew everyone who mattered and who was reputed to have instant information of the passage of every important file. This mattered in the heyday of the licence-permit raj when success depended on what Dhirubhai once described as "managing the environment". In RIL's phenomenal growth during the '80s, not least when Pranab Mukherjee was finance minister, Balu's role was seminal. He complemented the entrepreneurial genius of Dhirubhai.

Balu's loquaciousness and his colourful profanities endeared him to many politicians. He enjoyed unrestricted access to G.K. Moopanar. As former general secretary of the Congress, the present Tamil Maanila Congress chief apparently used his influence to scuttle a Home Ministry inquiry into Sharma's activities in 1992, following the latter's tenancy dispute with former Lok Sabha secretary-general Sudarshan Agarwal. Similarly, AIADMK's former minister of state for finance R.K. Kumar is the auditor of Morgan Industries Limited, a Chennai-based company manufacturing adhesives owned by Balu's son Ashok.

Petroleum Minister V.K. Ramamurthy is another Balu associate, having championed the Reliance cause in the past. Ramamurthy's private secretary A.S. Bhalla was recruited by Balu into the Petrochemicals Manufacturers' Association and subsequently assigned to the minister. Indeed, so deep is Balu's political influence that it is being said that "the draft budget papers were not leaked to Balu. Balu leaked the budget to the ministry".

Officially, RIL has distanced itself from Balu's extra-curricular activities. Yet, it refuses to be drawn into specifics. The Ambanis, it is clear, are deeply embarrassed. Having successfully transcended a manipulative image acquired in the '80s, RIL is now professionally-run, forward-looking and blessed with a global vision. It doesn't want to relive the past. "Balu is a Dhirubhai relic," said an Ambani friend. He doesn't correspond to the Wharton Business School image of Anil and Mukesh. He brings back bad memories. Managing the environment means something else today. Maybe Balu realised it and turned increasingly to private practice after 1991.

The problem is real. Not so much because Balu had a free run of sensitive government papers -- in India's over-regulated economy, information is power -- but because he was openly associated with a man who was intimately linked to Dawood, the man responsible for the 1993 Bombay blasts. It was the second time that Reliance and the underworld got intertwined. In August 1989, RIL general manager (PR) Kirti Ambani was arrested in Mumbai for trying to organise a supari killing of Bombay Dyeing Chairman Nusli Wadia, the bete noire of the Ambanis.

Discounting Sharma's claim of establishing contact with Salem at the behest of Balu, the underworld knew of the helicopter thief's Dawood links.

D-Company renegade Chhota Rajan told India Today that "Sharma, Dawood and I have spent a lot of time with each other. Sharma even came to Dubai for my wedding".

Balu, it is clear, has a lot of explaining to do. The CBI will inquire into the possibility that he also passed on some of his cherished information to Sharma, who in turn could have forwarded it to Dubai. But before this can happen, the Government will have to muster the political will to ensure thorough investigations. When it comes to Balu, that's easier said than done. Even if Advani insists it's a "test case".

POWERFUL FRIENDS

V K Ramamurthy
Petroleum Minister
The raid on Balu's office yielded classified documents of the Petroleum Ministry.

R K Kumar
Former AIADMK Minister
He is the author of the Chennai-based Morgan Industries owned by Balu's son Ashok.

G K Moopanar
TMC Leader
A long-time Balu associate, he is said to have stalled a Home Ministry probe against Sharma.