In November 1942, the Secretary of State for India, Leo Amery, received a report from Sir Azizul Huque, High Commissioner for India in the United Kingdom, on the low pay and poor living conditions of Indian seamen serving in the British Merchant Navy. The very interesting report and subsequent correspondence on the issues are contained within a file in the India Office Records.
Sir Azizul Huque’s report exposed the poor living conditions in Liverpool and Glasgow in which Indian seamen were obliged to live. He visited Glasgow in July 1942, and found a hostel recently constructed by the Missions to Seamen which he described as excellent, and a private boarding house named Alley’s Boarding House was regarded as acceptable. However, one common lodging house named Norfolk House was described as extremely unsatisfactory. This was due to Muslim seamen having to cook their food close to where ham and bacon were cooked by other lodgers. This was a cause of considerable grievance, as was the poor standard of cleanliness and sanitary arrangements. Sir Azizul brought this to the attention of the Ministry of War Transport who arranged for the Indian seamen to be removed to approved boarding houses.
Sir Azizul also enclosed a report on a visit to Liverpool by Tomlinson, Chairman of the Ministry of Labour Seamen’s Welfare Board, to inspect the seamen’s lodgings there. The conditions at the house at Trinity Place, Springfield were described as abominable, "a veritable rabbit warren for human beings”. Another house in the city was stated to be deplorable, and in such a state that it would be impossible to make it satisfactory, badly overcrowded and dirty, with a vile atmosphere. It was recommended that the system of farming out boarders by the steamship companies should stop, and a seaman’s hostel for Indian seamen should be established in keeping with the Ministry’s standards.
There were over 30,000 Indian seamen in the British Merchant Navy at that time, forming almost one-fifth of its total strength, and yet they received lower wages than either Chinese or British seamen. In 1942, an Indian seaman received wages of £4 1s per month compared to £16 15s for Chinese seamen and £22 12s 6d for European seamen. The official explanation given for this in an internal India Office note was that they were inefficient compared to Chinese and British seamen, and that the standard of living in the villages where Indian seamen came from was very low, and so despite being poorly paid they were still better off than their fellow villagers.
The rest of the file contains some fascinating correspondence detailing attempts by Sir Azizul Huque, Ernest Bevin, the then Minister for Labour and National Service, and others to improve the wages received by India seamen in order to bring them more into line with other seamen in the Merchant Navy. As Bevin pointed out to Amery in a letter of September 1, 1945, “these men are enduring all the risks and hardships of the sea for us and… we are withholding from them the financial recognition which is being accorded to all other sailors, both white and coloured”.
This article first appeared on British Library's Untold Lives blog.
Behind the garb of wealth and success, white collar criminals are hiding in plain sight
Understanding the forces that motivate leaders to become fraudsters.
Most con artists are very easy to like; the ones that belong to the corporate society, even more so. The Jordan Belforts of the world are confident, sharp and can smooth-talk their way into convincing people to bend at their will. For years, Harshad Mehta, a practiced con-artist, employed all-of-the-above to earn the sobriquet “big bull” on Dalaal Street. In 1992, the stockbroker used the pump and dump technique, explained later, to falsely inflate the Sensex from 1,194 points to 4,467. It was only after the scam that journalist Sucheta Dalal, acting on a tip-off, broke the story exposing how he fraudulently dipped into the banking system to finance a boom that manipulated the stock market.
In her book ‘The confidence game’, Maria Konnikova observes that con artists are expert storytellers - “When a story is plausible, we often assume it’s true.” Harshad Mehta’s story was an endearing rags-to-riches tale in which an insurance agent turned stockbroker flourished based on his skill and knowledge of the market. For years, he gave hope to marketmen that they too could one day live in a 15,000 sq.ft. posh apartment with a swimming pool in upmarket Worli.
One such marketman was Ketan Parekh who took over Dalaal Street after the arrest of Harshad Mehta. Ketan Parekh kept a low profile and broke character only to celebrate milestones such as reaching Rs. 100 crore in net worth, for which he threw a lavish bash with a star-studded guest-list to show off his wealth and connections. Ketan Parekh, a trainee in Harshad Mehta’s company, used the same infamous pump-and-dump scheme to make his riches. In that, he first used false bank documents to buy high stakes in shares that would inflate the stock prices of certain companies. The rise in stock prices lured in other institutional investors, further increasing the price of the stock. Once the price was high, Ketan dumped these stocks making huge profits and causing the stock market to take a tumble since it was propped up on misleading share prices. Ketan Parekh was later implicated in the 2001 securities scam and is serving a 14-years SEBI ban. The tactics employed by Harshad Mehta and Ketan Parekh were similar, in that they found a loophole in the system and took advantage of it to accumulate an obscene amount of wealth.
Call it greed, addiction or smarts, the 1992 and 2001 Securities Scams, for the first time, revealed the magnitude of white collar crimes in India. To fill the gaps exposed through these scams, the Securities Laws Act 1995 widened SEBI’s jurisdiction and allowed it to regulate depositories, FIIs, venture capital funds and credit-rating agencies. SEBI further received greater autonomy to penalise capital market violations with a fine of Rs 10 lakhs.
Despite an empowered regulatory body, the next white-collar crime struck India’s capital market with a massive blow. In a confession letter, Ramalinga Raju, ex-chairman of Satyam Computers convicted of criminal conspiracy and financial fraud, disclosed that Satyam’s balance sheets were cooked up to show an excess of revenues amounting to Rs. 7,000 crore. This accounting fraud allowed the chairman to keep the share prices of the company high. The deception, once revealed to unsuspecting board members and shareholders, made the company’s stock prices crash, with the investors losing as much as Rs. 14,000 crores. The crash of India’s fourth largest software services company is often likened to the bankruptcy of Enron - both companies achieved dizzying heights but collapsed to the ground taking their shareholders with them. Ramalinga Raju wrote in his letter “it was like riding a tiger, not knowing how to get off without being eaten”, implying that even after the realisation of consequences of the crime, it was impossible for him to rectify it.
It is theorised that white-collar crimes like these are highly rationalised. The motivation for the crime can be linked to the strain theory developed by Robert K Merton who stated that society puts pressure on individuals to achieve socially accepted goals (the importance of money, social status etc.). Not having the means to achieve those goals leads individuals to commit crimes.
Take the case of the executive who spent nine years in McKinsey as managing director and thereafter on the corporate and non-profit boards of Goldman Sachs, Procter & Gamble, American Airlines, and Harvard Business School. Rajat Gupta was a figure of success. Furthermore, his commitment to philanthropy added an additional layer of credibility to his image. He created the American India Foundation which brought in millions of dollars in philanthropic contributions from NRIs to development programs across the country. Rajat Gupta’s descent started during the investigation on Raj Rajaratnam, a Sri-Lankan hedge fund manager accused of insider trading. Convicted for leaking confidential information about Warren Buffet’s sizeable investment plans for Goldman Sachs to Raj Rajaratnam, Rajat Gupta was found guilty of conspiracy and three counts of securities fraud. Safe to say, Mr. Gupta’s philanthropic work did not sway the jury.
The people discussed above have one thing in common - each one of them was well respected and celebrated for their industry prowess and social standing, but got sucked down a path of non-violent crime. The question remains - Why are individuals at successful positions willing to risk it all? The book Why They Do It: Inside the mind of the White-Collar Criminal based on a research by Eugene Soltes reveals a startling insight. Soltes spoke to fifty white collar criminals to understand their motivations behind the crimes. Like most of us, Soltes expected the workings of a calculated and greedy mind behind the crimes, something that could separate them from regular people. However, the results were surprisingly unnerving. According to the research, most of the executives who committed crimes made decisions the way we all do–on the basis of their intuitions and gut feelings. They often didn’t realise the consequences of their action and got caught in the flow of making more money.
The arena of white collar crimes is full of commanding players with large and complex personalities. Billions, starring Damien Lewis and Paul Giamatti, captures the undercurrents of Wall Street and delivers a high-octane ‘ruthless attorney vs wealthy kingpin’ drama. The show looks at the fine line between success and fraud in the stock market. Bobby Axelrod, the hedge fund kingpin, skilfully walks on this fine line like a tightrope walker, making it difficult for Chuck Rhoades, a US attorney, to build a case against him.