Biggest scams of India post its independence – part 1

A massive list presented by Voxytalksy on the biggest scams of India post its independence
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India’s tryst with scams is endless! If you look at history a little closer, you will see that India has been embroiled in scams ever since its independence(Hawala, Bofors, Harshad Mehta etc)! These scams and political scandals amount to more than 73 Lakh Crores in current figures and this amount is ever-growing thanks to the latest PNB fraud by Mehul Choksi and Nirav Modi.

Here is a list of the most shameful scams in India post-independence which have burdened our country’s citizens for over 70 years:

Jeep Purchase Scam(1948)

Jeep Purchase Scam, Biggest scams of India post its independence including Hawala, Bofors, Harshad Mehta etc – part 1-voxytalksy,

The very first scam and political scandal of independent of India. V. K. Krishna Menon, the the-then Indian high commissioner to Great Britain, bypassed a protocol to sign a massive and dubious deal worth Rs 80 lakh with a foreign firm for the purchase of army 200 jeeps to be used in the troubled regions of Hyderabad and Kashmir. The army received only 155 jeeps although most of the money was paid upfront.

It was alleged that the then Prime Minister Nehru forced the government to accept these jeeps. The case was surprisingly closed in 1955 when Govind Ballabh Pant, the then Home Minister, announced on September 30, 1955, that the Jeep scandal case was closed for judicial inquiry ignoring suggestion by the Inquiry Committee led by Ananthsayanam Ayyangar. This was soon after Menon joined the Nehru cabinet and later he was made defence minister of the country!

Cycle Imports Scam (1951)

European Business

In the year 1951 the-then Secretary to the Ministry of Commerce and Industry, S.A. Venkataraman, was jailed for accepting a bribe in lieu of granting a cycle import quota to a company. After six years of the cycle scam in the year 1956, it was found that a few leaders of Orissa were giving commission to businessmen for cycle import licenses.

A big businessman of North India called Muhammad Sirajuddin was found guilty of this. He was the owner of many mines and a diary was found with him that proved that he had relations with many known politicians. But no action was taken in this regard. Consequently, the news got published after some time. Later, the then Minister of Mines and Fuel Keshav Dev Malviya agreed that he took Rs. 10,000 from a mining owner of Orissa commission. Later, Malviya had to resign under pressure from Nehru.

Mundhra Mess (1958)


Haridas Mundhra was a Calcutta-based industrialist and stock speculator who fooled the government-owned Life Insurance Corporation (LIC) to invest a whopping Rs. 1.24 crores in buying the shares of six troubled companies belonging to Mundhra. It was alleged that this was done under governmental pressure and eventually LIC lost most of the money. The irregularity was first highlighted in 1958 by Feroze Gandhi of the Congress party. The case compelled T.T. Krishnamachari to resign as finance minister.

To overcome this loss, the parliament passed the Life Insurance of India Act on June 19, 1956, in which 245 firms were consolidated into the Life Insurance Corporation’s ambit.

Teja Loans Scams (1960)

A classic case of bad loans. Shipping magnate Jayant Dharma Teja was appropriated loans worth Rs 22 crore to help him establish the Jayanti Shipping Company. However, in 1960, it was found that he was actually siphoning off money to his personal accounts. Before he could get caught, he fled the country.

Kairon Scam (1963)

In 1963, Punjab’s chief minister Pratap Singh Kairon was accused of misappropriating public money for personal expenses along with his family. The SR Das Commission which was constituted to investigate the allegations sheepishly exonerated the chief minister from most of the charges, but his family members were found to be guilty. However, Kairon took the moral responsibility and resigned from the post a year later under huge pressure from the opposition.

Patnaik Scam (1965)
Biggest scams of India post its independence – part 1, voxytalksy

Orissa Chief Minister Biju Patnaik was forced to resign from his post when the HR Khanna Commission investigating corruption charges against him found that he had awarded a government contract to his privately held company, Kalinga Tubes.

Nagarwala Bank Scam (1971):

In 1971, the head cashier of SBI, Parliament Street got a call from the-then PM Indira Gandhi to hand over Rs. 60 lakhs in cash to a man in connection with Bangladesh. On 24 May 1971, former intelligence agent RS Nagarwala posed as the “man from Bangladesh” and withdrew Rs 60 lakh from the same branch.

Nagarwala had smartly “mimicked” Indira Gandhi’s voice. A probe in the matter ensued, but the investigating officer DK Kashyap was killed in a mysterious car accident and 4 years later, Nagarwala died in prison. The opposition parties, primarily the Janata Party, alleged that the money actually went to Indira Gandhi which she used presumably for the funds of Mukti Bahini in its guerrilla-liberation campaign from West Pakistan.

Bofors Scandal (1987)

Bofors Scandal, Biggest scams of India post its independence – part 1-voxytalksy

The Bofors scandal was a major political scandal that occurred between India and Sweden during the 1980s and 1990s, in which members of the Indian (including Rajiv Gandhi, then the prime minister) and Swedish governments were accused of paying illegal kickbacks worth US$1.4 billion (Rs 64 crore) for giving them the contract to supply India’s 155 mm field howitzer tender. The scandal relates to the Swedish arms manufacturer Bofors who were ordered by the government of India for the sale of 410 field howitzer guns, and the supply contract almost was twice that amount. We also remember the role of Bofors in the Kargil war. It was because of Bofors guns that India could inflict huge casualties on militants and Pakistani forces.

Airbus Scam (1990)
Airbus Scam (1990), Biggest scams of India post its independence – part 1-voxytalksy, like Bofors, Harshad Mehta etc

Indian Airlines was accused of signing a Rs 2,000-crore deal with Airbus following the crash of an A-320 even though the Boeing planes were costing lesser. This caused IA a weekly loss of Rs 2.5 crore which is still in debt currently.

Hawala scandal (1991):
 Hawala scandal, Biggest scams of India post its independence – part 1-voxytalksy, Bofors, Harshad Mehta etc

Interpol’s definition of hawala is “money transfer without money movement.” The US $18 million (Rs 1.8 crores) scandal broke out when payments allegedly sent by politicians (black money) through four hawala brokers, the Jain brothers were caught by the CBI. The arrest of the Jain brothers, the hawala brokers who were bribed, led to the seizure of the now famous `Jain diaries’ that enlisted the details of all the payments. Those accused included L. K. Advani, V. C. Shukla, P. Shiv Shankar, Sharad Yadav, Balram Jakhar, and Madan Lal Khurana. The court cases of the Hawala scandal eventually all collapsed without convictions.

Securities Scam by Harshad Mehta(1992)

 Harshad Mehta, Biggest scams of India post its independence – part 1-voxytalksy, (Hawala, Bofors,etc)

Harshad Mehta, a famous Indian stockbroker was accused of manipulating Indian banks by siphon off their money and investing the funds in the Indian stock market, which eventually crashed. The loss was a whopping Rs 5,000 crore! It was alleged that Harshad Mehta engaged in a massive stock manipulation scheme financed by worthless bank receipts, which his firm brokered in “ready forward” transactions between banks. Harshad Mehta was convicted by the Bombay High Court and Supreme Court of India.

Sugar Import (1994)
Sugar Import, Biggest scams of India post its independence including Hawala, Bofors, Harshad Mehta etc – part 1-voxytalksy

Kalpnath Rai, the then Food Minister signed a deal in which the import of sugar in India took place at a price higher than that of the market. The scam cost Rs 650 crore to the exchequer. He had to resign after the allegations became public.

Read also: Biggest scams of India post its independence – part 2


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