Sting operation highlights Modi's anti-corruption agenda

New Delhi

INDIAN Prime Minister Narendra Modi said uncovering and penalising corruption would be a focus of his government when he won a landslide victory last May. Now he's putting those words into action.

In a sting operation last week, police arrested five people and recovered stacks of stolen documents from the coal, power and oil ministries, according to Sunil Kumar, the investigating officer. They included details of exploration sites, natural gas pricing and the Oil Ministry's arbitration with Reliance Industries, the Indian Express reported on Feb 21, citing unidentified police sources.

The probe widened over the weekend, with seven people detained. Among those held are officials from Reliance Industries, Essar Oil, Cairn India, Jubilant Energy and Reliance Group, according to police spokesman Rajan Bhagat.

As with Chinese President Xi Jinping's anti-corruption campaign targeting the powerful and wealthy, Mr Modi seems ready to take on some of India's richest and most influential families. The probe may widen further as the government looks to prevent confidential documents from falling into the hands of private companies and media outlets.

"It's not just the petroleum ministry - it happens everywhere," said Mohan Guruswamy, chairman of the Centre for Policy Alternatives in New Delhi and a former finance ministry official under a previous government led by Mr Modi's Bharatiya Janata Party. "There are leaks everywhere."

Billionaires who own companies at the centre of the investigation include Reliance Industries chairman Mukesh Ambani, India's wealthiest man, and his brother, Anil Ambani, who heads Reliance Group. Billionaire brothers Shashikant and Ravikant Ruia own Essar, while Anil Agarwal's Vedanta Resources controls Cairn India.

"The recent actions by the government are unprecedented and will definitely boost India's and the prime minister's image," said Deven Choksey, managing director at KR Choksey Shares & Securities. "Investors will feel happy and would want such clear message on corruption issues."

The arrests were the culmination of a four-month investigation initiated by intelligence agencies on the instruction of National Security Advisor Ajit Doval, The Times of India reported, citing sources it didn't identify. In a letter to Mr Modi's cabinet secretary last October, Mr Doval said leaks of classified information to newspapers were undermining national security, the report said.

"This government won't allow anybody to breach the system or bend the rules," Oil Minister Dharmendra Pradhan told reporters on Feb 21. "This is not directed against anyone. We had some information, we had some discomfort and that is when we wanted investigation."

India's stocks and currency are among the world's best performers as investors bet that Mr Modi will make it easier to do business and boost economic growth. His government is due to release its first full-year fiscal budget on Feb 28.

Police laid the trap on the evening of Feb 17. Three people arrived at Shastri Bhawan, which houses India's Oil Ministry, with two heading inside and one staying by the vehicle. When they returned about two hours later carrying official documents, the police moved in and arrested all three. Their car had an unauthorised "Government of India" sign and was seized.

Other arrests followed, including ministry officials, a journalist running a website and a consultant, with charges ranging from trespassing to theft, Delhi Police Commissioner Bhim Sain Bassi said on Friday. He added that police were considering charges under the Official Secrets Act, which could lead to a prison term of as much as 14 years.

On Friday, police brought five of the arrested to re-enact the crime before dozens of journalists and cameramen. According to police, it worked like this: the officials would open offices with duplicate keys, disable any CCTV cameras and photocopy every document sitting on the desks. They then sold them to private petroleum companies and consultants.

"A nexus between the government, large companies and journalists has existed for many, many years," said N Bhaskara Rao, chairman of the New Delhi-based Centre for Media Studies, a policy research group. "This incident reminds the people of India about corporate lobbies, middlemen and the extent people can go to for information." BLOOMBERG