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Were I&B Secretary Bimal Julka, NFDC MD Nina Gupta and NFDC Board of Directors involved in the Electronic Media Advertisement (EMA) scam?

The NFDC Scam, as we have begun to call it, was not possible without the active collusion of top officials of the Ministry of Information & Broadcasting (MIB) and NFDC who were aided by a suppliant and compromised NFDC Board of Directors led by Man Mohan Shetty, Om Puri and Ramesh Sippy, at various times. They were the only connections of the Indian Film Industry with NFDC.

However, they chose to be mere rubber stamps instead of acting as guiding forces. There is enough evidence to suggest that they preferred not to delve deeper into the affairs of NFDC since they were personally obliged in various ways by corrupt officials. The chairmanship of NFDC was a matter of personal aggrandizement for them apart from some of the privileges that come along with it. We have told you about the ‘amorous’ one whose ex-wife fulfilled her life’s ambition of turning a filmmaker at the cost of the public exchequer.

The response of the NFDC MD Nina Gupta to the findings of the MIB inspection team was brazen and brusque. She chose not to respond to specific findings of misdemeanor and corruption mentioned in the inspection/special audit report and tried to put forth specious arguments such as ‘NFDC is a separate entity under the Companies Act’ and ‘whatever it did had the approval of its Board of Directors’.

The Board of Directors of NFDC was not above board either

However, the inspection team had also found serious anomalies in the actions of the Board of Directors which had given post-facto approval to arbitrary and patently ‘out of order’ decisions of the MD; even the minutes of the Board meetings were not recorded until some new rule came into force that made audio recording of the Board meetings mandatory.  The NFDC Board virtually acted as a handmaiden of the existing NFDC MD who used it as an alibi and shield to cover up her acts of gross omission and commission. This issue was also raised by one of the upright officers of MIB who felt that all was not well with the composition and constitution of the NFDC Board.

Whistleblowers and NFDC employees had first revealed the NFDC Scam, but things changed as soon as Bimal Julka appeared on the scene

The misdeeds of the MD of NFDC Nina Gupta may not have come to light and she may have gotten away with this but for one stark reality – NFDC was dependent on government funding and was thus ultimately answerable and accountable to MIB. The Secretary MIB who preceded Bimal Julka had initiated the probe into the wrongdoings and corrupt practices of the MD after things were brought to his notice by some whistleblowers and NFDC employees.

As he was replaced by Julka during the last one year of UPA 2, things took a dramatic turn. Julka promptly set in motion a process within MIB to achieve two objectives:

1. Restore NFDC’s agency status under the Electronic Media Advertising (EMA) policy of the govt.
2. Hush up the inspection report that condemned the NFDC head honcho for flouting rules that were particularly created to check corruption.

Her transgressions were as serious as A. Raja’s in the 2G scam and those involved in the Coal Gate scam. She, along with the rest of the nominated directors and chairman of the NFDC board, who connived with her, should have been sacked and booked for corruption and gross demeanor. That did not happen.

What were Julka’s motives?

A serious inspection of the documents we have with us shows that in spite of being an experienced bureaucrat, Julka showed an ugly and criminal haste in taking the abovementioned steps, thereby becoming an accessory to the crime. (Any probe in the matter by the CBI or any other agency should look at this aspect very carefully.)

Did Julka succeed in his attempts? He did succeed but partially. The previous secretary, MIB had already and rightly referred the NFDC case for a detailed audit to the Comptroller & Auditor General of India (CAG). The junior MIB officials did not give in meekly to Julka’s attempts to hush things up either. They made sure everything went on record with Julka’s notings and memos. They knew things were not in order and were smart enough to create a trail of Julka’s ‘exceptional’ efforts to dump and bury the inspection report. Indian bureaucracy may be self-serving and corrupt, but it also has some intelligent and intellectually alert men and women.

Julka’s ‘personal’ interest in the matter was ‘extra-ordinary’ and ‘unseemly’

One of Bimal Julka’s memos makes it amply clear that he was taking a keen interest in the NFDC case. It comes across as if the greatest priority of the MIB Secretary was NFDC and its affairs and he was ‘personally’ interested in making things easier for the MD who was constantly in touch with him. It is also clear that in spite of his constant prodding, the upright officers in the Ministry had refused to oblige him. The inspection and special audit report was too hot for them to hush up. Julka, for reasons better known to him, suddenly got charged up about the matter and wrote a long departmental memo on 17th July, 2014.  He referred to a letter by the Chairman NFDC (Ramesh Sippy), dated 16th July 2014, and wrote that the Chairman had been repeatedly writing to him about the non-payment of salaries, etc.

Look at the dates here. The Chairman NFDC (Ramesh Sippy) writes to Bimal Julka on 16th July 2014 and he in turn issues a LONG memo to MIB officials on 17th July 2014. If the Indian bureaucracy could show such promptness in other areas, Indian farmers would not have to commit suicide.

The question also arises as to why was Ramesh Sippy writing to Julka about a matter that concerned NFDC’s day-to-day administration. This was the job of the MD, not Sippy’s. The Chairman or the Board of Directors of a corporate entity is not supposed to be looking into its daily working. Sippy was obviously doing the bidding of Nina Gupta,  and signing on the dotted lines. It was a typical modus operandi. Clearly, he was compromised in some ways too.   

Julka runs down his officers in the memo, does another ‘extra-ordinary’ favor to NFDC MD

Julka seems to be suggesting in the memo what the NFDC MD would like him to say. He writes, ‘ We have held several meetings with our officials including MD, NFDC, but it is evident that due to hard positions being taken by both the sides, no solutions appear to be forthcoming.’ He excludes himself from ‘government officials’ and turns a self-appointed arbitrator; he does not stop at that. He spells out his pre-determined plan in his 5-point memo.

It seems as if within a day of receiving the Chairman’s letter, he has formulated a definite plan of action to help NFDC. He certainly wouldn’t have slept whole night since he was busy drafting a carefully-worded memo that was not as neat a ‘hush-up’ job as he might have believed. Upright MIB officials had created a very strong paper trail and it was not going to be easy for him to wipe it out completely.

Yet, he did not refrain from trying and resorted to a typical method to bamboozle and steamroll the opposition. He announced the formation of a ‘High-Powered’ committee in the 17th July 2014 memo itself.   

Julka gets heavyweights Somi Tandon and Bhaskar Ghose to browbeat his own officers into submission

This was unprecedented and highly suspicious and irregular. Julka, suo moto, formed the two-member committee of Somi Tandon (ex-Secretary, Finance & Defence) and Bhaskar Ghose (ex-Secretary I&B, ex-DG DD, ex-CEO LSTV) to examine the matter. Why did he bring these heavyweights to do the job that could have been done by much lesser mortals? It’s done sometimes as a favor to old friends of ‘you scratch my back I scratch yours’ club but there should be some semblance and rationale behind such ‘micro-corruption’ decisions.

Julka threw all caution to the winds for strange inexplicable reasons. One can understand this if Somi Tandon and Bhaskar Ghose were going through hard times and needed a job and money to tide over their financial crisis. That apparently could not have been the case.

The only plausible explanation for this is that Julka was trying to browbeat the officials in the ministry who were sticking to their stand and not responding to all his gentle nudges. They had to be sidelined and the enquiry pursued by them into the affairs of NFDC had to be stopped at any cost.

Julka determines ‘suo moto’ the ‘terms of reference’ of the committee too in a brazen attempt to sideline the ‘corruption and nepotism’ issue

The Terms of Reference or objectives of the Ghose-Tandon Committee (GTC) give away Julka’s real motives. GTC is asked to examine if NFDC adhered to the Electronic Media Advertisement Policy (EMA) or not and suggest actions NFDC may take to strengthen its internal control system. You have to be able to read between the lines here to understand what Julka was trying to achieve.  He used GTC to bury the inspection report for good by reinventing the wheel. The inspection/special audit report had already stated that NFDC violated EMA guidelines with definite supporting evidence authenticated by the Directorate of Audio-Visual Publicity (DAVP). Further movement and action on the inspection/special audit report was required and it had already been initiated in the form of a CAG audit. However, GTC was formed with terms of reference that made light of the serious violations by NFDC. It actually overrode the damning inspection/special audit report. 

Julka wanted GTC to examine if the functioning of NFDC justified its ‘discontinuance’ as an agency under EMA

What a subterfuge! Look at the use of the word ‘discontinuance.’ Truly speaking, the term should have been if the functioning of NFDC justified its ‘continuance’ or ‘appointment’ as an agency under EMA. Julka sets forth the real motive behind this whole rigmarole with this term of reference. It’s a fixed match. All suo moto actions of Julka were only aimed at achieving this end – to restore the agency status of NFDC under EMA. He had obviously handpicked Ghose and Tandon to perform this task. And they must have done exactly what they were expected to do. The agency status of NFDC stands restored today without actually examining the justification for ‘continuance’ of NFDC as an agency.

What does it entail? With the restored agency status, the NFDC MD will have the opportunity to cover her tracks and destroy the evidences of a gigantic scam during the UPA regime that involves media groups, ministries, PSUs and NFDC officials, and even politicians.

Is the agency status of NFDC under EMA justified and was NFDC mandated or equipped to perform such a task?

It was obviously not. NFDC was not supposed to work as a media-buying agency neither did it have the expertise to perform this task. And in what way does media-buying serve the cause of ‘good cinema’ and the Indian film industry? As per the EMA policy, even the agency commission earned was supposed to be returned to the client ministries and PSUs that was not done previously by NFDC as per the inspection/special audit report.  The agency job was just an additional burden on NFDC, and not even the one that required a large staff. Media-buying agencies don’t actually need a large staff. So why was NFDC and Julka so keen to restore the agency status of NFDC? What was the pay off here for NFDC or the GOI? Apparently nothing and this is where we smell a big rat since we know the modus operandi of media-buying agencies and executives and the menace of the KICK-BACK business.

Advertising Biz, Kickbacks, & Corruption

Advertising business has a long history of ‘kickbacks’. Ad agency executives including media planners and advertisement managers on the client side indulge in what now has become an ‘acceptable’ and ‘normal’ practice. It’s another ‘you scratch my back, I scratch yours’ club.

There is every reason to believe that DAVP, various ministry and PSU officials who are clients of DAVP, and the media houses indulge in this too.  The money involved here is huge since the government and PSUs are the biggest advertisers of the nation. Diverting a part of the DAVP business to NFDC cannot be an innocent act of ‘cross-funding’ to make NFDC’s annual report look good. NFDC is a ‘grantee’ institution surviving on govt. funding and by the submission of the MD, NFDC herself, does not work for profits. By virtue of that, its ‘red bottom line’ is of little consequence and concern. It was always red and was supposed to be red in order to promote ‘good cinema’, a perpetually loss-making proposition.

Then why were the MD, NFDC and Bimal Julka in such an ugly hurry to restore NFDC’s agency status under the EMA policy citing the argument that NFDC was not able to pay the salaries of its staff?  Is it not a fact that NFDC paid its staff for decades even when it was not part of the EMA regime? And as per the inspection/special audit report, NFDC already had Rs. 8 crores in its kitty, the money it was supposed to return to MIB. It was not all that cash-strapped. 

Thus it’s clear that there is much more here than what meets the eye. NFDC was probably being used as a convenient conduit here with the active connivance of its Managing Director. The overpayment to Sun TV by NFDC in violation of all established norms, highlighted by the MIB’s inspection/internal audit team, clearly indicates the existence of a scam the contours of which can only determined by a deeper and detailed ‘criminal’ probe involving custodial interrogation of the MD, NFDC and ex-Secretary MIB Bimal Julka. 

Julka also asks GTC to find out the accounting rules that are conducive to producing good cinema

Yes sir, this is what the then secretary I&B, Bimal Julka, wanted to be explored. This is a first in cinema biz. The quality of films is also dependent on how the film unit maintains its books of account. If you were looking for a laugh-out-loud (LOL) moment in this article this is the one. Two much-celebrated, retired and jaded bureaucrats who had nothing to do with filmmaking were tasked to suggest if the procedures and rules attached to a ‘plan scheme’ are ‘conducive to producing good cinema’. This is another fait accompli. GTC is being advised to endorse the NFDC stand, which actually means absolute freedom to flout tendering and funding norms to let NFDC get away with its misdeeds and corruption.  The ‘plan scheme’ or any funding scheme can only specify financial and accounting methods, controls, and standards. They are universal in nature. All industries, including the film industry, follow them. Why does Julka preposterously suggest a term of reference to GTC to explore if the GOI’s funding norms are conducive ‘to producing good cinema’?

Julka sets it up for his special friend Nina Gupta but his memo is effectively and factually challenged by one of his own subordinates

If Julka presumed that his blatant moves would succeed in browbeating the lower-level bureaucrats into abject submission, he was in for surprise. The Additional Secretary & Financial Advisor (AS & FA) of MIB strongly rebutted the points made in Julka’s 17th July 2014 memo in her rejoinder on 21st July 2014 and exposed his malafide intent in reinventing the wheel. She countered each of his inferences and careless conjectures and conclusions with strong irrefutable arguments. She took a particular objection to Julka’s comment in his memo where he had said that in spite of the Additional Secretary Films (AS - Films) and AS & FA being on the board of NFDC, no meaningful results could be achieved. She termed the charges as biased, baseless and unfounded. She referred to the obduracy of the MD NFDC who did not allow the compliance audit and questioned Julka if the work of the new committee, GTC, will supersede the work already done. She also asked Julka to peruse the audio recordings of the meetings of the NFDC Board of Directors to ascertain what happened during those meetings. She hinted at the fact that apart from the two MIB officials, AS (Films) and AS & FA, who were nominees of the NFDC Board, the others hardly came prepared for the meetings.

She enumerated the background of the inspection/compliance audit to Julka

She put the entire background of the inspection and internal audit of NFDC in proper perspective and recounted how Nina Gupta stonewalled and finally forced MIB to invoke a rarely-used clause in the Memorandum of Association of NFDC and seek a Presidential order to investigate its financial affairs. She specifically asked Julka if CAG should be informed about the formation of the new committee. Julka responded to her. He reiterated that no conclusive decisions could be arrived at the NFDC Board meetings without even mentioning about the audio-recordings of the board meeting. He again referred to the issue of salaries not being paid. It was a bogus issue though. He said that for transparency sake, CAG could be informed of the new committee and then added, “We should ‘collectively’ adopt a positive approach to running of the organization.”

In fact, in the name of ‘collective’ decision-making, Julka was asking the upright AS & FA to ‘collude’ with him in his pre-meditated conspiracy to save the MD, NFDC. And as he was not sure she would oblige, Julka finally delivered his knock-out punch in no uncertain terms, “If there is still resistance, then AS & FA can discuss with me.”  

‘If there is still resistance then AS & FA can discuss with me’ threatened Julka

If a senior bureaucrat uses this kind of threatening language with a junior, it’s like putting a gun over his/her head and saying, ‘fall in line or else…’ Indian bureaucracy or ‘naukarshahi’ also follows the cosa-nostra approach to managing its affairs. If you do not fall in line with the wishes of your senior bureaucrat, your career may be doomed. And juniors generally give up the fight after a point of time.

The AS & FA in question did not succumb to Julka’s threat fully, yet she had to step back. The self-respecting upright officer passed the file on to the Finance section with remarks that she had already expressed her views in the matter but the department may ignore a few things in the report and forward the file for further processing to the Film section. Though Julka got what he wanted, he could not take away the self-respect of the officer. This irked him a great deal and he used his authority to harm her career prospects.  

The NFDC Expose will continue and soon we shall be delving deep into still more specific examples of the corrupt practices followed by the NFDC head honcho.