Congress has scored another own-goal on Lalit Modi job offer to Swaraj Kaushal

The dirty tricks department of the Congress party is working overtime to find something to beat the BJP government at the centre and states with. The latest is the charge that on 15 April 2015, Lalit Modi had offered the job of alternate director to Swaraj Kaushal in Indofil Industries Ltd, one of the group companies controlled by his family, as quid pro quo for getting Sushma Swaraj, External Affairs Minister, to intercede on his behalf for obtaining travel documents from the British government. [caption id=“attachment_2318974” align=“alignleft” width=“380”]  Lalit Modi. Reuters[/caption] It redounds to the credit of Kaushal that he did not accept the offer, as clarified by him and KK Modi, father of Lalit Modi. Section 161(2) of the Companies Act, 2013, which regulates the appointment of alternate directors, has not yet been notified. So much so that section 313 of the Companies Act, 1956, the predecessor law, is still in force. Alternative directors come in handy for non-resident directors of joint venture companies in India - i.e. companies where a foreign company is the FDI partner. It is de rigueur for such non-resident directors to nominate Indian proxies to do their bidding at board meetings though the law requires the board to appoint an alternate director and not the expat director himself. An alternate director can be appointed only if the original director is away from the state in which the board meetings are ordinarily held for not less than three months. In many Indian companies where foreign companies call the shots, a farce is enacted by making a pliable Indian stand in for several non-resident directors at the same time. The new law enshrined in section 161 (2) of the Companies Act 2013 says a person can stand in for only one original director. It also rightly talks of the original director being away from India rather than from the state where the board meetings are normally held. This is in recognition of the reality that the regime is by and large used by non-residents. However, it does not cover a purported “fugitive” appointing a stand-in director. Be that as it may, Lalit Modi knew on 15 April 2015 that he is not going to return to India within the next three months and, therefore, proposed the name of Kaushal as alternate director to stand in for him. Indeed he would have had to do Modi’s bidding because section 313 says in so many words that the purpose of appointing an alternate director is to act on behalf of the original director. Lalit Modi might have sought to reward Kaushal for the so-called act of influence peddling by his wife Sushma Swaraj, but by rejecting the offer Kaushal has saved embarrassment for himself, his wife, and indeed the entire ruling NDA at the centre. That is why the Congress has scored a self-goal. Had Kaushal accepted the offer, the Congress’ charge would have carried conviction and indeed it could have gone to town with another charge of impropriety by Sushma Swaraj. But by rejecting the offer Kaushal saved the day. Indeed, the Congress would look sheepish if people understand the true import of Kaushal’s rejection. To be sure, alternate directorship is not a great honour for any appointee, since the status is that of a stooge, but Kaushal would have courted trouble for himself and his wife had he accepted the offer and the remuneration that goes with the office. Congress spokesperson Abhishek Manu Singhvi is a no mean lawyer. Of all the persons in Congress, he should not have led the charge against Sushma Swaraj on this account. It has fizzled out even before it was hurled. The Congress has truly got egg on its face by trying to make a villain out of Kaushal who, in fact, showed remarkable prescience in rejecting the offer. Acceptance of a bribe or a quid pro quo is a crime but anyone who rejects such overtures actually grows in stature. It is a common joke in bureaucratic circles that a minister or bureaucrat sometimes contrives to institute a CBI inquiry against himself or his family members with an eye on the clean chit that would send his stock soaring. It cannot be anybody’s case that Kaushal got Lalit Modi to make an offer so he could reject just to send his stock skyhigh. Levity apart, the Congress’ charge lacks in substance and has, in fact, come as manna from heaven for a beleaguered foreign minister. That Kaushal gets a retainership from the Modi family companies is beside the point because he has been offering his legal services for more than two decades and none of this had anything to do with favours from Sushma Swaraj. In any case, it is ridiculous to suggest that Sushma Swaraj would have stuck her neck out to obtain a bit of income for her husband as it emerges, in hindsight, that her interceding in the matter did not result in any dilution of any charges against Lalit Mod. The favour she did was no big deal - once again in retrospect - because the Delhi High Court had restored his passport.