10The Mundhra Scam worth ₹1.24 cr
The Mundhra Scam was the 1st scam of free India which came or was rather thrust into the limelight due to the vitriolic relationship between the then Prime Minister, Jawahar Lal Nehru and his son-in-law and MP, Feroze Gandhi. It started with an innocuous looking report in the newspaper, The Statesman that an amount rising to 1 crore rupees had been withdrawn from the funds of the Life Insurance Company (LIC) and has been invested in a private enterprise based out of Kanpur. The unravelling of the 1st scam of India began after Feroze Gandhi asked the government in the parliament if premiums from 5.5 million LIC policyholders had been used to purchase shares at inflated prices in companies controlled by a certain Haridas Mundhra. In response, the then finance minister, Krishnamanchari could only fathom, “You are basing your allegations just on newspaper reports. This is not proper. Do you have evidence?” Feroze Gandhi had in his possession confidential correspondence between Krishnamachari and the finance secretary, HM Patel and was willing to produce them.
The Prime Minister, Jawahar Lal Nehru responded by setting up an enquiry commission under former Chief Justice, M.C Chagla. Mr. Chagla got on with the task at hand in a diligent and quick manner and was able to submit his report in less than a month. His report confirmed that LIC had bought 1.24 crore rupees worth of illegal shares in 6 companies owned by Haridas Mundhra. Mundhra was in turn bleeding these companies and siphoning away all the money that was invested. On paper, LIC had bought these shares to stabilize the market but in reality, it was done to help Mundhra from going bankrupt. The orders to do so seemed to have come from the highest echelons of the government.