Where Angels Prey (8 page)

“Get me a bundle of
beedis
,” he says, pushing Vijaya away. “I need tobacco to kick-start my brain.”

She looks at him beseechingly.

“I beg of you! Come with me to the DM now. She will keep you safe.”

“Scoot now before I give you another blow!”

She leaves reluctantly, repeatedly turning back to look at him pleadingly.

Ramaiyya wonders if the woman has a point after all. It might be his best option, even if for a while.

Bob wonders if he is being a tad too melodramatic. Even so, there is no escaping from the truth behind the almost poignant display of emotion that they have just witnessed. The microfinance industry had indeed killed Mylaram Kavala. It kept pressing loan after loan into her hands, with hardly any thought to her capacity to absorb or repay. As it had done with numerous other women like her, if their research over the last few days was anything to go by.

Bob cannot help feeling shocked as he recalls the sheer impunity with which rules appear to have been flouted across institutions. When they had left Hyderabad in the rented SUV, Chandresh had suggested sampling the operations of SAMMAAN, DevEx, Aashray and Sowmya, the four major microfinance institutions in Andhra Pradesh across the districts of Ranga Reddy, Mehboob Nagar, Medak, Warangal, Krishna and Guntur. Since the highest number of suicides had been reported from Ranga Reddy district, they had decided to begin their research there. Despite Prasad Kamineni’s smooth assurances, Bob had observed that the branch officers at SAMMAAN and the field-level staff were not too eager to share information. While there was no open hostility, he had observed a marked reluctance to share records, a tendency to obfuscate or gloss over details whenever Chandresh pointed out or questioned any discrepancies or lack of information. Despite the language barrier that made Bob rely heavily on Chandresh, it had not been impossible for him to see through their avoidance tactics and shifty body language.

Every such visit confirmed their niggling suspicions; in fact, things turned out to be much worse than they had imagined. It soon became obvious that SAMMAAN was not alone in its methods. There were definite trends across institutions indicating a broader malaise that affected the sector as a whole.

Chandresh had shared with Bob that he had been hearing rumbles from the ground for some time now. It had seemed to Chandresh that the microfinance industry in the state was headed for yet another fall, the triggers for which had been the consequences of the 2006 Krishna crisis. The drying up of funds from public sector sources after the Krishna crisis had resulted in the industry turning heavily towards the profit motive-driven private sector. The resultant emphasis on bottom lines and profits had seen the MFIs violate their very founding principle, which was to ensure access to affordable finance for the poor.

Bob, in turn, spoke of his own initial reservations about the industry’s fairytale growth story. An industry with a self-proclaimed commitment to poverty alleviation boasted of a phenomenal growth rate at a time when the world economy had been in the throes of recession. Global investors flocked to it like bees to a honey pot, keen to invest in what they perceived as low on risk and high on returns, with a social sector tag to boot.

The discrepancies between the records and ground level realities were damning, to say the least. Bob had been prepared for some margin of error but what they uncovered was way beyond acceptable levels. Even while acknowledging that he probably had a developed nation or a Western world bias, Bob believed India to be a land where people had scant respect for the written law and found ways to bend, if not flout, rules to suit their interests. Since the unwritten law was to break the law, no one even batted an eyelid at any such instances. And yet, the degree of discrepancy or falsification of records observed on the ground during the field visits was indeed staggering. Almost every branch of every organization that they visited seemed to have ghost clients in their books of accounts. When Bob and Chandresh ventured into the villages, they found that the women named in the books either simply did not exist or had been long dead. In one of those instances, the SAMMAAN agent accompanying them even tried to cook up a story about initials being mistakenly interchanged, to cover their tracks. She then produced a woman who she claimed was the person named in the books. The fraud was uncovered soon enough when another MFI, Aashray, produced the same woman as their client, albeit under a different name. In another instance, while the MFI representative claimed that a client was recently deceased, her family revealed that she had been dead for more than five years. It became obvious that loans were being issued in the name of a dead woman and her family was certainly not the beneficiary.

There was also the matter of multiple lending. Almost all of the MFIs operating in a village had lent to the same clients concurrently without a thought to their credit absorption or repayment capacity, a blatant violation of the norms established by the Federal Banking Regulator. Bob and Chandresh found that the MFIs had been colluding among themselves and had even charted schedules for village visits, allotting specific days of the week to each of them so as to avoid any clashes. Later, of course, they would be unsparing in their efforts to recover their loan instalments, pushing their clients up against the wall or, in extreme cases like Mylaram Kavala’s, to hang from the roofs of their homes.

“They would often tell her that she should make better use of her daughters!”

Bob’s reverie is broken by Chandresh’s harsh words.

Mylaram’s younger daughter is sobbing softly, while the older one seems too weary for even that. She leans against a wall, her eyes vacant, drained of all emotion.

Bob turns to Chandresh.

“Chan, is she hinting at threats of sexual abuse?”

Chandresh nods grimly.

“Yeah Bob, she is. Maybe Mylaram thought they might act on their threats someday. Maybe she thought she was saving them from harm by killing herself.”

Bob exhales roughly.

“She might have well made them more vulnerable. Do they have any other family? Where will these girls go? What will they do now?”

Chandresh gets up abruptly.

“I think we are done here, Bob. Let’s get going.”

Not quite used to squatting on the floor, Bob struggles to raise himself and takes Chandresh’s outstretched hand.

“We don’t have any pictures of hers to give out. You can click one if you like.”

Kala points to the photograph that hangs on the wall. The garland of flowers around it is a few days old. All that remains is a sorry looking string with a few stubborn flowers that refuse to fall off, even though they are long dead. The woman in the photograph is of indefinite age and so is the expression on her face.

“Would you mind posing beside it?”

Chandresh translates Bob’s request for the benefit of the girls before stepping out of the house.

The older daughter positions herself next to the picture and continues to stare at them vacantly. The younger one wipes her face clean with a towel and tries to set her hair right before she goes and stands to the other side of the picture.

Bob takes a couple of shots and nods to the girls in acknowledgement before he steps out.

Chandresh stands in the shade of a tree a few yards away, smoking a cigarette.

Bob walks towards him.

“I asked you a question in there, Chan. What of the future of these girls?”

Chandresh is silent for a moment before he replies, without looking at Bob.

“How does it matter, Bob? We have our story. Let’s go looking for the next.”

Bob touches his shoulder.

“Don’t be so harsh on yourself.”

Chandresh turns to look at him and gives him a half smile.

“You need to be strong!”

Chandresh shrugs and walks quickly towards the car.

Bob half jogs to keep up with him, wondering if he should have given the girls some money. Would they have been offended?

“How much could you have given? And how long would it have kept them? And how many of them would you give to?”

Bob is taken aback. How had Chandresh managed to read his thoughts?

“It wasn’t too hard!”

Ignoring Bob’s incredulous look, Chandresh opens the SUV door and gestures for Bob to get in.

Bob clambers in. Just as Chandresh is about to follow him, he is hailed by a youth running towards him.

“Sir...please wait!”

Chandresh recognizes him as Ramu, the local stringer for a regional newspaper. They had met a couple of years ago when Chandresh was working on a story on farmer suicides in the region. The boy had taken to calling him whenever he thought of a local story that might interest him or merit nationwide attention. Chandresh had spoken to him over the phone just that morning to see if he could shed any further light on the ongoing crisis.

“Hello Ramu, what are you doing here?”

“Sir, I came looking for you. Your mobile was not reachable. And you had mentioned that you were going to visit Mylaram Kavala’s family.”

Ramu catches his breath.

Chandresh’s brows furrow in concentration. Ramu would not have come chasing after him unless he was on to something.

“Sir, you know that Sowjanya International School...that residential school on the outskirts of the town? I just heard that there was an IT raid there yesterday.”

Chandresh frowns.

“On a school premises? Okay, I’ll put one of the daily reporters in touch with you, Ramu. It might be of interest to them.”

Ramu shakes his head frantically.

“Sir...the raid is not the point... at least not directly. The thing is, Sowjanya is owned and run by Srinivas Potluri....”

He pauses and looks at Chandresh expectantly. Chandresh is puzzled.

“So, is this Potluri some local politican?”

Ramu looks a little disappointed.

“Sir,..he is the maternal uncle of Kumudini Potluri!”

Realization dawns on Chandresh.

Of course! And Kumudini Potluri is the CEO of DevEx!

“I had no idea! So, do you expect Kumudini to use her
political connections to bail her uncle out?”

“Sir, forget that...the fact is Srinivas Potluri is her front man!”

Chandresh’s interest is piqued.

“Are you saying that she has other business interests besides microfinance?”

Ramu takes a deep breath before responding.

“I suspect that the school is a conduit to route money to and from DevEx.”

Chandresh lets out a low whistle.

“That is a big allegation to make. I am still waiting to hear from Kumudini’s office on an appointment. I’ll make sure to probe in this direction if she agrees to meet me.”

Ramu smiles broadly.

“That was the whole point of my coming here, sir. Kumudini Potluri is reaching the school premises as we speak.”

Chandresh feels a latent excitement kick in. As a reporter, he had always enjoyed corralling reluctant subjects down and coaxing them to speak. He claps Ramu’s shoulder before pumping his hand enthusiastically.

“I owe you one, Ramu!”

Ramu smiles modestly and wishes Chandresh luck before leaving.

Chandresh jumps into the SUV, eager to share the news of the lucky break with Bob.

“Bob, we’ve had a stroke of—”

He stops midway, on seeing that Bob is on the phone.

“Okay, please tell Maarten that I will call him within an
hour, as soon as I get to the hotel. He should wait for my call...okay Priya, take care.”

Bob hangs up and turns to Chandresh with a quizzical look.

Chandresh responds with a query.

“Do you have to go back to the hotel right now?”

“Wasn’t that the plan anyway?”

Chandresh shakes his head.

“Something’s come up, Bob. The woman who heads DevEx is here. I want to get to her before she leaves.”

Bob’s forehead is marred by a frown.

“That sounds important. What do we do now, Chan? I have just set up a con-call with Maarten, a financial journalist friend in Amsterdam. Apparently he told Priya he needs to speak to me pronto.”

“You head to the hotel, Bob. Let me go and try to meet the lady. For all you know, it may not even happen!”

“Don’t tell me she will turn down a meeting with the charming Chandresh Rajan?”

Chandresh gives Bob a droll look and asks the driver to drop him off at the main road.

Bob realizes that he can’t afford to waste any more time observing social niceties. He opens his mouth to call out to the man when the telephone on the desk starts ringing loudly and he wakes up with a start. Mortified at having been caught napping, he is confused whether to answer the phone or attend to the “
gora”
guest. Bob cannot quite come to terms with the embarrassingly deferential, almost obsequious treatment that the colour of his skin merits in these parts. Chandresh often pulls his leg about it, feigning gratitude because he gets to bask in reflected glory.

Having decided to answer the phone first, the receptionist hurriedly ends the conversation and turns to Bob.

“Sorry, sir...sorry to wait you...any help?”

“Not a problem, but could you please help me? I need to connect to the internet and my connection is acting up. Poor network. I was wondering if I could make use of the hotel’s business centre.”

The man looks at him in confusion.

“Business centre?”

“I mean the internet...the hotel’s internet connection?”

The man looks at him mournfully.

“Very sorry...modem repair...mechanic no come!”

Bob has a sinking feeling in his stomach. Maarten must surely have emailed him the documents by now. How is he to access them?

Bob turns away and starts walking towards the elevator when the receptionist calls out to him.

“Sir, you try opening window?”

Bob is confused for a moment. Why would he try to open the window?

“Sir...window open...then maybe connection possible? Other peoples tries...work sometimes!”

Bob nods and smiles before getting into the elevator, hoping for one of those “sometimes”.

He unlocks the door and walks into his room.

As he pulls the drapes apart, the bright sunlight filters in through the glass window panes. He switches off the air conditioning and opens the windows. A gust of hot air hits him in the face, reminding him of a ceiling fan that could still offer him some respite.

He pulls the table closer to the window and switches on his laptop.

Much to his own amusement, he mutters a prayer under his breath before trying to connect. The beliefs of the land seemed to be rubbing off on him too.

Maybe it is the window trick or just maybe, the Gods are pleased him after all!

Bob lets out a whoop of exultation when the connection goes through and he manages to log in.

The euphoria does not last long for he has no new mail.

Bob wonders what could possibly be keeping Maarten. It is quite unlike him to be so late. Maybe there had been another development that distracted him....

Maarten had answered the phone almost immediately and came straight to the point without bothering with customary pleasantries.

“Bob, this must be the mother of all coincidences. I mean...I had called to get you to put me on to Chandresh Rajan and Priya tells me you are in India and with the man himself!”

Bob chuckled.

“Hello Maarten, I am good and hope you are too! So tell me, what do you want with Chandresh, if you don’t mind my asking?”

Maarten barrelled on, ignoring Bob’s not-so-subtle dig at the lack of a greeting.

“Bob, I need some information on microfinance institutions in India. I assume Chandresh will be able to help me with this?”

“What...are you working on a story on the microfinance sector?”

“Well, not exactly, I’m actually working on a story on pension funds. You know, how they are managing their investments given the economic meltdown and all that.”

Bob’s interest was piqued.

“Okay, is it that you notice a pattern with pension funds being invested in the microfinance sector in India?”

Maarten let out a whistle.

“Okay that was sharp, even for you!”

Bob let out a shout of laughter at the backhanded compliment.

“Actually, no. Just that I happen to be doing a story on the microfinance sector in India, obviously focusing on the international investment pouring into the sector, Wall Street being at the top of the list.”

Maarten replied after an infinitesimal pause.

“Looks like my job is going to be a lot easier than I thought. So have you analysed the investment patterns, investor profiles...who are the big boys out there?”

“Well, it’s the usual suspects. Most of the big venture capital funds are on the bandwagon: Lemoia, Alexander Zaimis—he has a big stake in at least two of the blue-chip MFIs—then there is the IT moghul, Jay Gupta, and of course the Indian IT giant, Raghav Shetty.”

“Ever heard of Tejasvi Enterprises?”

Bob frowns.

“No, can’t say the name rings a bell.”

There was a pause.

“They are big players, with big money invested in two of the global giants among the MFIs—SAMMAAN Microfinance in India and Kapo in Nigeria. A few of our pension funds in turn have invested heavily in “Tejasvi.”

The mention of SAMMAAN set off warning bells in Bob’s head. Could this possibly be a lead? What was Tejasvi and who were the people behind it?

He hadn’t realized that he’d said it out loud until Maarten responded.

“I am trying to find out. All I know from a Google search is that the company was incorporated in Mauritius.”

Bob chewed his lower lip as he tried to activate his tired brain cells.

“Mauritius...who can we tap there... Wait, I know! I have a contact there, a guy called Abdul. Let me call him and ask him to dig around a bit.”

Maarten was excited.

“That’s excellent! I knew I could count on you, my man!”

“Let us not get ahead of ourselves, Maarten. The lead
may take us nowhere.”

Bob struck a note of caution, if only to dampen his own rising excitement.

After promising to get in touch as soon as he got hold of some information, Bob ended the call.

He checked his watch. It was a quarter past one in the afternoon.

What was the time difference between India and Mauritius?

A quick Google search revealed that Mauritius was an hour and a half behind.

He suspected Abdul would be at work by now. Abdul ran a tourist agency in Mauritius and was extremely resourceful. Bob crossed his fingers and called him.

The phone was answered after a couple of rings.

“Hello Abdul, this is Bob from
The New York Post
. How are you?”

“Bob sir! How are you? It is so nice to hear from you after all this time...are you coming over?”

Not a bad idea. Maybe once he was done with the story, he could check with Priya if she could take some time off and join him in Mauritius. The idea appealed to him.

“Hopefully soon, Abdul, but right now I called to ask you for a favour.”

“Anything, sir, Abdul is always at your service!”

“That is very kind of you, Abdul. I need information on a company called Tejasvi Enterprises, which was incorporated in Mauritius.”

Abdul sounded hesitant.

“What kind of information? Are they doing illegal things?”

Bob hastened to clarify.

“Not really, at least not as far as I know. Just that they seem to have invested big money in the sector that I am doing a story on. I wanted to check out their background, their promoters, their line of business and so on.”

“Okay, give me a few hours. Let me see how much I can find out and I’ll call you back.”

After hanging up, Bob tried calling Chandresh to check on his whereabouts, but there was no response.

Biting into an apple, Bob opened his laptop and started browsing through the DRHP (Draft Red Herring Prospectus) of SAMMAAN Microfinance that he had downloaded from their website. Next, he ran a search for “Tejasvi”.

Sure enough, there it was!

On page 95, it said that Tejasvi Enterprises had bought a large number of shares, totalling up to nearly 15% of SAMMAAN’s share capital. The DRHP suggested that Tejasvi Enterprises had bought the shares at par value during SAMMAAN’s first round of institutional equity sales.

Bob was intrigued. An investor who was virtually unknown in the microfinance sector was part of the very first round of institutional equity sales. What made the MFI invite Tejasvi to partake in its equity sales? There had to be a connection there. Something didn’t quite add up.

Tired of trying to solve the puzzle, Bob ended up dozing off on the chair.

The incessant ringing of his phone woke him up. His sleep-addled brain took a minute to process his whereabouts before he sat up with a start. The phone had stopped ringing by then, but he had grabbed it to check who had called. A cursory glance at the time revealed that he had been sleeping for more than an hour. He wondered if it was the heat that had brought on the spell of drowsiness. He had clean forgotten to shut the window and switch the AC back on.

The missed call was from Abdul. Did he have some information already?

With impatient fingers, he hit the call button.

It rang for a while before Abdul answered. He sounded a little out of breath.

“Sorry, sir, I was just making some lunch.”

“I am sorry I did not take your call earlier, Abdul. I was actually sitting around waiting for you to call, and then I just fell asleep!”

Bob laughed.

“Must be the heat, sir.!”

“I guess so, Abdul. So, tell me, do you have news for me?”

“A bit, sir, not everything.”

“I will need some more time to get details on the company’s operations and interests, etc., but basically it is a venture capital fund. And the major stakeholder is a company called KPK Enterprises, based in Singapore.”

Bob was intrigued. The trail seemed to be growing!

Taking his silence for disappointment, Abdul apologized profusely.

“I’m sorry I couldn’t get you more information. Give me another day?”

Bob hastened to reassure him.

“Abdul, you’ve done a great job. This is a very important piece of information, thank you so much for your help. And please do let me know if you find out anything else.”

After hanging up, Bob immediately dialled Maarten.

Maarten picked up after a few rings, his voice a mix of surprise and excitement.

“Don’t tell me you have some news too!”

Bob grinned as he told him what he’d discovered.

“I don’t know why, but I get the feeling that the trail is headed somewhere big. We need to follow this one for sure. Do you have any sources in Singapore or should I employ mine? If something emerges I could even fly out to Singapore, it’s a matter of four odd hours from here.”

“But wait, tell me what you’ve got? Sorry, I got carried away in my excitement!”

He could almost hear the smile in Maarten’s voice as he had responded.

“No sweat, Bob. The news I have is that Tejasvi just made an exit from SAMMAAN and made a killing in the process.”

“What?”

“The news item just showed up while I was digging around. They’ve made huge profits. And there is pattern to it...they have already been down this road once...and come back through yet another QIP
⁶
...!”

Bob was stunned.

“You mean they had already sold out once before from SAMMAAN and then re-entered?”

“Exactly...let me read out a small piece from the report for you. I will, of course, mail you the entire piece along with some other material I have.”

Bob listened intently as Maarten began to read.

“Interestingly, Tejasvi Securities Mauritius held 15%
of SAMMAAN’s shares up to August 2010 but exited the company during the first week of September as per shareholding data available on BSE. Tejasvi Securities then strangely re-entered SAMMAAN through yet another QIP offered at a lower price per share, at a very steep discount on the prevailing stock price. The QIP issue opened in the second week of September 2010 and closed five days later…. Tejasvi sold the stocks subsequently on October 1, making a huge profit of Rs 270 crores on the entire transaction.”

“That is another huge killing!”

“So it appears, Bob...so it appears!”

“So what do we do next?”

“What do you think? Should we dig deeper? To be honest, this is not really the focus of my story.”

Bob quickly interjected.

“Maarten, can I ask you for a favour? This whole thing has me thinking in a whole new direction. I’m going to scratch some more to get to the bottom of the holding company trail. And I might need your help with some of the legwork.”