Known to be articulate, former diplomat Shashi Tharoor has courted many controversies as a politician. The senior Congress leader, had to resign from the post of Minister of State for External Affairs back in 2010 after being accused of giving his girlfriend Sunanda Pushkar close to INR 80 crores stake in the Kochi IPL team and failing to prove that he didn’t benefit from the dealings.
The St. Stephens Alumni got into trouble whether it was him criticizing Nehru’s foreign policies or his ‘cattle class’ tweet. The former UN official was also under the scanner when he married Dubai-based businesswoman Sunanda Pushkar and later when she died in 2015 over whether or not her death was a suicide. Recently a petition to nominate Tharoor as the UPA’s Prime Minister candidate for the 2019 elections has been doing rounds.
In 2015 January, a close aide and distant relative of Tharoor, Nandakumar Radhakrishnan was penalised for fraud and dishonesty by the Dubai International Financial Centre Court. The company, Afras Limited and Nandakumar, Managing Director of Afras were known to device fraudulent schemes and siphoned close to USD 24 million from Corinth Pipeworks. The issue came to light when the Greek company filed a claim against Barclays Bank.
Corinth and Afras entered into an agreement that Corinth would sells pipes to Afras which would in turn sell these steel pipes to be used for construction of gas pipes to companies like Bechtel Overseas, Inc. and Petroleum Development Oman LLC (PDO). Over a period of two years, Corinth shipped these pipes to be sold to these companies, but never received any payment amounting to USD 24 million. Corinth therefore filed a claim against Barclays alleging Business Manager, Joseph Figueredo had conspired with Afras and Nandakumar to defraud Corinth of the USD 24 million.
The bank reacted stating that if indeed the bank was found to be liable, this would prove Nandakumar liable to pay the amount to Corinth too. The Court did find Nandakumar guilty of defrauding Corinth by siphoning monies owed to Corinth to personal accounts, dishonestly misrepresenting trade finance from Barclays in order to pay Corinth for previous contracts, fabricating e-mails to Corinth to have come from the bank’s Business Manager, Figueredo, and fabricating commission claims in order to justify the non-payment of monies to Corinth. The Court had therefore penalised Afras Limited and Nandakumar to pay a sum of USD 3,900,000 plus interest to Corinth.
The Court in its judgment said, “I grant judgment to the Bank against Afras and Mr. Kumar in the sum of US$3,900,000. As regards costs this is a paradigm case for the award of indemnity costs. The case for Afras and Mr Kumar was fundamentally dishonest. It was conducted and concluded in an irresponsible fashion. Furthermore Afras and Mr Kumar were, as the Bank puts it, the architects and financial beneficiaries of the fraudulent scheme. It follows in my judgment that they should pay the costs incurred by the Bank in defending the claim brought by Corinth on the same basis that they have been held liable for the entire settlement sum.”
On fabrication of e-mails the Court said,
“In respect of each of such allegedly doctored emails, Mr Kumar came out with the same stock answer in his witness statement. This was to the effect that Mr Kumar does not recollect receiving the original emails from Mr Figueredo but denies that he forwarded the emails in doctored form to Corinth. He says that he has no knowledge of how the emails came to be altered. I unhesitatingly reject that purported explanation. The expert evidence is clear and supports the Bank’s case that Mr Figueredo’s emails (including the above email dated 28 April 2010) were indeed doctored after they had been sent by Mr Figueredo to Mr Kumar. The only person who had the opportunity and motive to doctor the emails was Mr Kumar. The suggestion that it is theoretically possible that some of the emails were doctored after receipt by Corinth can be rejected as absurd. In addition, as noted below, there is information contained in some of the emails sent to Corinth which is only consistent with the emails having been sent by Mr Kumar.”
The Court also noted,
“The doctoring of e-mails by Mr Kumar is not something of direct relevance to the Bank’s cause of action. But they go further than merely undermining if not eliminating Mr Kumar’s credibility. As the bank put it, Mr Kumar’s conduct in sending the e-mails supports the conclusion that Mr Kumar participated in a dishonest conspiracy because otherwise the sending of them is inexplicable.”
Coming down heavily on Afras and Nandakumar the Court remarked,
“All of Afras’ and Mr Kumar’s dishonesty proves that their real intention was not to pay Corinth for the Pipes it was supplying. Afras and Mr Kumar acted in accordance with that intention by siphoning off monies received from Bechtel to another Afras bank account and not passing on to Corinth the monies that it received under the PDO Contract. Indeed, even in February 2010 when Afras owed Corinth USD 24 million, Mr Kumar was still taking substantial sums out of the company and transferring them to his personal bank accounts.”
In May 2007, Shashi Tharoor has accepted a position as chairman of Afras Limited, a with a view to promote foreign investment in India, specifically Kerala. He was roped in as a chairman for the company by Nandakumar Radhakrishnan who had interests in developing his home state of Kerala. Tharoor is said to have been offered a hefty pay package by Afras for merely being the face of the company and that package included access to company cars in Trivandrum and New York.
In 2007, explaining how he came to be the chairman of the Dubai-based company – Afras, Tharoor told Rediff, “There is another company, Afras Limited, which is the principal activity of my partner, that is one of the world’s leading suppliers of pipes for the oil and gas industry. He gets them from European manufacturers and sells them to the Saudis, Omanis and others.”
Tharoor added, “This gentleman, who had a family connection, got in touch with me and told me what he has been doing in Dubai and that he had made a success with Afras Ltd. And if I would be willing to come in with him in this new venture in a 50:50 partnership and try seriously to focus on India.”
According to the many references of Nandakumar in TP Sreenivasan’s book, Mattering to India, he is known to have been actively involved in Shashi Tharoor’s political campaign. Nandakumar is said to have an important say in strategy and is said to have come to Tharoor’s aid at crucial times during the campaign.
Infact, Afras Ventures, a division of Afras had setup Afras Academy for Business Communication (AABC) in Technopark, Thiruvananthapuram as a launchpad for Tharoor’s political career and to get him local influence. To quote from Sreenivasan’s book:
“The Afras Academy for Business communications (AABC) came up in Technopark as a Shashi Tharoor venture. This was in response to the crying need for business communications skills in Kerala, about which several CEOs had spoken to Tharoor on his visits to the Technopark campus. His activities generated a Shashi Tharoor wave in Kerala and people were dazzled by his personality and oratorical abilities. However, the AABC itself was ill-conceived and poorly executed without any understanding of the reality on the ground. I was asked to serve on the Board of AABC, but by the time the first meeting of the Board was held under the Chairmanship of His Highness Uthradom Thirunal, the head of the Trvanacore royal family, most of the decisions had already been taken. The basic premise was that the heads of most companies in Technopark who had mentioned the need for such an institution to Tharoor, would send their employees to the Academy. The initial investment, it was announced, would be Rs. 3 crore, which appeared excessive.
A speech therapist from the United states, Tina Parsons was brought in at immense expense as the Director and expensive equipment was imported. Far too many teachers were also hired from the open market at high salaries. Consequently, the fees charged from the students was very high, and there was no guarantee of placement after completing the course. As an investment, it made no sense, and when this was brought to the attention of the investor, Nandakumar, he frankly admitted that the purpose of the Academy was to give Tharoor local influence. Both the Governor and the Chief Minister attended the gala inaugural, but it was soon realized that, commercially, AABC would not be a success.
My younger son Sreekanth, had just retuned from New York, and we wanted him to work somewhere in India or in the neighbourhood. Tharoor gladly recruited him in a managerial position in Dubai, but since the paperwork for Dubai was taking time, Sreekanth was asked to help out at the AABC. He did considerable work in marketing and increased the intake of students, but the AABC never had enough students to make the investment worthwhile.
An effort to save AABC by cutting costs was made by terminating the contract of Tara Parsons and inducting Smita Tharoor, but it was not possible for her to set it right. Since she continued to live in London and travelled to Thiruvananthapuram, the costs rose even higher. When she left for personal reasons, the management was taken over by a Bangalore-based trainer, Yeshasvini. The AABC was simply a platform from which Tharoor could launch himself into politics. Therefore, its failure did not reflect on the organizational skills of Tharoor or the business acumen of his partner.”
The Kochi Post wrote an email to Tharoor on the controversy seeking his comments but we are yet to receive any reply. Questions raised in the email are listed below.
You have held a position previously at Afras Limited. Do you still hold a stake in the company?
If you have resigned from the company, can you please let us know your date of resignation?
Are you still associated with Mr. Nandakumar in any other manner?
Lastly, please share your thought’s on Nandakumar being penalised by the Dubai Court.
From the time Tharoor has joined Indian politics, as a Congress MP to his speeches seeking a rightful place for India in world politics, he is assuming more power and gaining more importance as a leader. And hence, it is important that he answers these questions to clear the air around his association with his long-term business partner.
You can read the judgment of the Dubai International Financial Centre Court here.
Editor’s note: Though this judgement regarding Nandakumar came out in 2015, it was important to highlight it as it hasn’t been mentioned any other media so far. Being a free and fair news portal, we owe it to our readers to publish a matter of such importance.
Cover Image By TED, CC BY-SA 3.0 via Wikimedia Commons.