A marriage of corruption and politics in 'mango' republic


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The claim was shocking: had Robert Vadra, son-in-law of Congress president Sonia Gandhi, really been involved in illegal sweetheart deals with a property company, DLF? And had DLF really received undue favours from the Congress-run state government of Haryana?

The allegations, made early this month by whistle-blower-turned-politician Arvind Kejriwal, brought a standard denial from the 43-year-old Mr Vadra: "I am a private law-abiding citizen who has been engaged in business over the last 21 years. The allegations levelled against me ... are utterly false".

But then, on his Facebook account, he added this: "Mango people in a banana republic."

In Hindi, "mango people" sounds like "common man". Everybody claims to be the common man - the phrase is part of the slogan of Mr Kejriwal's activist group India Against Corruption, but is also used in Congress party rhetoric and literature. Mr Vadra seemed to be calling India a banana republic, thereby poking fun at his own mother-in-law.

The Facebook post was soon taken down but the damage had been done. In India, small things like this still matter. Indians expect those in public life to behave with a modicum of courtesy, especially if they want respect as well as votes.

Mr Vadra is not a politician - except that his wife Priyanka is the granddaughter of Indira Gandhi and the daughter of Sonia Gandhi, India's most important politician. Married into this family, Mr Vadra is a public figure by any measure.

And so his ill-chosen quip fuelled suspicion that there is something not totally right about his dealings with DLF, a property giant. Mr Vadra, a small-time dealer in brassware a few years ago, has now become a considerable property tycoon.

According to one of Mr Kejriwal's accusations, the Haryana government allotted 142 hectares of land to DLF to build a hospital, but DLF built a special economic zone instead, and a year later Mr Vadra was given a 50 per cent stake in it. Moreover, Mr Kejriwal said, DLF gave Mr Vadra an unsecured interest-free loan worth Rs650 million (Dh45million), money he used to buy luxury apartments at a fraction of their value.

Such claims are all too familiar. India's rapid economic growth in the last two decades has come about in what can only be called a climate of corruption. In the last three years alone, all major political parties have been tarnished by scandals in which the state is said to have lost more than $100 billion in revenue. These include a $35 billion coal-mine-rights allocation case; the $37.8 billion Karnataka Wakf Board land scam; and the $33.26 billion 2G spectrum scam, in which the Dravida Munnetra Kazhagam party was said to have been the lead beneficiary.

Last month another case arose. Anjali Damania, Mr Kejriwal's ally in India Against Corruption, accused the BJP party president, Nitin Gadkari, of refusing to inquire into a $13.6 billion irrigation fraud in Maharashtra state. The Congress and the Nationalist Congress Party are in power in Maharashtra; the BJP is in opposition and so should have been interested in the scandal allegations. However, Ms Damania claimed that Mr Gadkari had admitted to her that he had business interests with Sharad Pawar, a senior politician of the Nationalist Congress Party, and so would not pursue the issue.

Mr Gadkari, denying wrongdoing, has sued Ms Damania for her comments.

Through all these cases, the sticky finger of blame has until now always pointed away from the Gandhi family. When Mr Kejriwal began to gun for Mr Vadra, it seemed as if a barrier had been breached.

On the eve of the winter session of parliament, battle lines are being drawn. But nobody has been able to explain why the Corporation Bank, a public-sector firm, loaned Mr Vadra's companies money to help purchase some of his DLF land, when the bank's directors have stated nothing of the sort happened.

For the time being, the accusations against Mr Vadra are nowhere near the scale of the Bofors scandal of the 1980s and 1990s. That affair, over which then-prime minister Rajiv Gandhi was accused of colluding in kickbacks from the purchase of artillery, lost him the 1989 election.

But in the current highly unstable political situation, the wind could end up blowing in any direction. In India, the season of political discontent seems to have only begun.

Jyoti Malhotra is a political and foreign affairs analyst based in Delhi

On Twitter: @jomalhotra

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Step by step

2070km to run

38 days

273,600 calories consumed

28kg of fruit

40kg of vegetables

45 pairs of running shoes

1 yoga matt

1 oxygen chamber

Name: Peter Dicce

Title: Assistant dean of students and director of athletics

Favourite sport: soccer

Favourite team: Bayern Munich

Favourite player: Franz Beckenbauer

Favourite activity in Abu Dhabi: scuba diving in the Northern Emirates 

 

MATCH INFO

Manchester United 2 (Heaton (og) 42', Lindelof 64')

Aston Villa 2 (Grealish 11', Mings 66')

World record transfers

1. Kylian Mbappe - to Real Madrid in 2017/18 - €180 million (Dh770.4m - if a deal goes through)
2. Paul Pogba - to Manchester United in 2016/17 - €105m
3. Gareth Bale - to Real Madrid in 2013/14 - €101m
4. Cristiano Ronaldo - to Real Madrid in 2009/10 - €94m
5. Gonzalo Higuain - to Juventus in 2016/17 - €90m
6. Neymar - to Barcelona in 2013/14 - €88.2m
7. Romelu Lukaku - to Manchester United in 2017/18 - €84.7m
8. Luis Suarez - to Barcelona in 2014/15 - €81.72m
9. Angel di Maria - to Manchester United in 2014/15 - €75m
10. James Rodriguez - to Real Madrid in 2014/15 - €75m

Ten tax points to be aware of in 2026

1. Domestic VAT refund amendments: request your refund within five years

If a business does not apply for the refund on time, they lose their credit.

2. E-invoicing in the UAE

Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption. 

3. More tax audits

Tax authorities are increasingly using data already available across multiple filings to identify audit risks. 

4. More beneficial VAT and excise tax penalty regime

Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.

5. Greater emphasis on statutory audit

There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.

6. Further transfer pricing enforcement

Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes. 

7. Limited time periods for audits

Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion. 

8. Pillar 2 implementation 

Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.

9. Reduced compliance obligations for imported goods and services

Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations. 

10. Substance and CbC reporting focus

Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity. 

Contributed by Thomas Vanhee and Hend Rashwan, Aurifer

Skewed figures

In the village of Mevagissey in southwest England the housing stock has doubled in the last century while the number of residents is half the historic high. The village's Neighbourhood Development Plan states that 26% of homes are holiday retreats. Prices are high, averaging around £300,000, £50,000 more than the Cornish average of £250,000. The local average wage is £15,458. 

How to protect yourself when air quality drops

Install an air filter in your home.

Close your windows and turn on the AC.

Shower or bath after being outside.

Wear a face mask.

Stay indoors when conditions are particularly poor.

If driving, turn your engine off when stationary.

Andor
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Position: legal consultant with Al Rowaad Advocates and Legal Consultants.