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In Tribute: The IAS Officer Who Stood Up To the PMO & Cleaned Up The Stock Market

GV Ramakrishna, a 1952-batch IAS officer of the Andhra Pradesh cadre, passed away this weekend. His legacy is marked by events like challenging the PMO during his stint as petroleum secretary and as the most effective chairman in the history of SEBI, where he oversaw the cleanup of the stock market.

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GV Ramakrishna, one of the most outstanding officers in the history of the Indian Administrative Service (IAS), passed away on 20 March in Chennai. Born on 27 March 1930, this native of Bengaluru, who was popularly known as GVR, was a civil servant whose career in and out of service exemplified the best of what we expect from our IAS officers.

(Above image courtesy Twitter/Vice President of India)

A 1952-batch officer belonging to the Andhra Pradesh cadre, GVR had an illustrious career in public service stretching 50 years even though he officially retired in 1988. His career in the IAS saw him becoming chief secretary of Andhra Pradesh in 1983, besides stints in the union government in the ministries of finance, steel, coal and petroleum and industry. He even obtained a Masters in Public Administration from Harvard University early in his career, studying economics under giants of the field like John Kenneth Galbraith and Ed Mason.

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Combining honesty with integrity, consultative spirit and a penchant for getting things done, GVR stood up to a myriad of powerful politicians and vested interests to do his job.

Two events stand out from his illustrious career in public service.

The first was cleaning up and transforming the Indian capital markets as the chairman of the Securities and Exchange Board of India (SEBI) in the early 1990s despite intense pressure and lobbying by powerful stockbrokers with political connections. The second was standing tall against an interfering Prime Minister’s Office in the late 1980s as petroleum secretary and overseeing a clean tendering process for the Rs 1700 crore Hazira-Vijaipur-Jagdishpur (HVJ) pipeline project.

Challenging The Powers That Be

In his autobiography, titled ‘Two Score and Ten: My Experiences in Government’, the standout chapter is the one describing his stint as petroleum secretary. Appointed to the post in February 1985, one of GVR’s key tasks was to oversee who would be awarded the Rs 1,700 crore HVJ (also known as HBJ) pipeline contract. The pipeline was expected to transport natural gas for ONGC across 1,000 kilometres from the fields of South Bassein (off the coast of Mumbai) to fertiliser plants in Rajasthan, Madhya Pradesh and Uttar Pradesh.

Although a consortium of companies led by the French Spie-Capag won the pipeline project bid in an open and fair tendering process, a coterie of political forces within and outside the Prime Minister’s Office (PMO) under Rajiv Gandhi sought to sabotage the process.

Through subjecting the bidding process to probes by various committees, the PMO sought ways to hand over the contract to Snamprogetti, an Italian firm represented by Ottavio Quattrocchi, who was also later accused of being a conduit for bribes in the Bofors scandal.

In their tribute to GVR, reputed journalists Debashis Basu and Sucheta Dalal, the reporter who also exposed the famous 1992 stock market scam executed by Harshad Mehta, wrote:

GVR braved the wrath of the prime minister and refused to bow to pressure and ensured a clean bidding process with legal opinions to back all his actions and absolutely no slip up. In fact, petroleum minister, Naval Kishore Sharma paid the price and was shunted out. But there is a twist in the tale. After the deal was done, the Spie Capag representative met GVR to offer him a 5% kickback — a massive Rs 34 crore for making the deal happen. A stunned GVR called in his financial advisor and director and asked the representative to repeat the offer before them. He then forced Spie Capag to offer a further Rs 34 crore discount on the project cost ‘as a gesture of goodwill’, without informing the minister about the reason for this generosity.

In the book, GVR recollects how the prime minister called eight meetings just to review the implementation of the project even after the contract was signed, but would often cancel them on very short notice. By the time the fertiliser plant in Bijapur was ready, GVR was so annoyed by the process that he refused to attend the inauguration. Despite going toe-to-toe with him in the HVJ episode, Rajiv Gandhi maintained his respect for the experienced officer. GVR notes in the book how in May 1991, Rajiv asked him if he would be available to his government after the general elections.

Rajiv told his secretary, Vincent George, to ensure GVR was “given priority on appointments” and a direct line to his personal number. Tragically, he was assassinated a few days later.

This wasn’t the first or the last time he challenged powerful politicians.

Another positive feature of his work was the ability to bring different parties together during disputes and taking inputs from all stakeholders concerned.

Within days of taking charge as chief secretary of Andhra Pradesh in August 1983, he resolved a massive strike organised by thousands of government employees over the then Telugu Desam Party government’s decision to lower the retirement age from 58 to 55 and an ordinance which got rid of certain employment safeguards. Prior to his arrival, the government had sought to mobilise public opinion against the employee strike and refused to offer any written assurances that their demands would be met. GVR stepped in and resolved the strike within a week of taking over.

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Speaking to India Today in 1983, the ‘cigar-chomping chief secretary’ said:

“It was more like a family quarrel. Neither the employees nor the Government can do without the other. Some misunderstandings had to be cleared up and confidence restored.”

GVR

Cleaning Up the Stock Market

After retiring from the IAS in 1988, he was appointed India’s Ambassador to the European Union the following year. Like he did previously, GVR shone in his role, but that, unfortunately, rubbed some senior colleagues in the service the wrong way.

Therefore, in August 1990, he was sent to Mumbai to head SEBI, which at the time was considered a dead-end posting since it had no statutory powers at the time. Moreover, it was seen as a posting beyond his area of competency. But none of that mattered to GVR.

This was a time when brokers exercised incredible control of stock exchanges. Investors were helpless in front of unscrupulous brokers who didn’t respect settlements and often defaulted. He took steps to project investors and enhance transparency and accountability in stock market dealings. Besides asking intermediaries to register themselves with SEBI, he named and shamed listed companies with the highest number of investor complaints.

Mind you, he was taking on brokers who had large pockets and deep political connections. He didn’t hesitate to take on the power structures at the Bombay Stock Exchange (BSE). After SEBI was given statutory powers in April 1992, GVR really took off.

One of the biggest steps he took was banning ‘badla’, the name given to BSE’s carry forward system. This was largely responsible for the 1992 speculative bubble which eventually led to the massive securities scam.

According to a 18 December 1993 editorial by the Times of India, “It [the ban on badla] only requires buyers and sellers to make their payment and delivery within a fortnight and stops speculators from selling shares they do not possess and postponing payment for shares they cannot afford.”

Fortunately, GVR had the support of then Prime Minister Narasimha Rao, and Finance Minister, Dr Manmohan Singh despite intense lobbying by powerful stockbrokers. In a span of two years, he laid the foundation for the regulatory framework that governs stockbrokers, mutual funds, investment banking and prevents insider trading, among other facets, today.

However, that political support withered away once one of Narasimha Rao’s sons was accused in a scam associated with leading stockbroker Hiten P Dalal and brokers decided to shut down the market following the introduction of the badla ban. By the end of December 1993, he was shunted and made a member of the Planning Commission in January 1994.

“By the time GVR left SEBI, he had used his deadly combination of brilliance, strategy and scrupulous honesty to challenge and change every entrenched capital market lobby. He had brought mutual funds, brokers, sub-brokers and stock exchanges under regulation, introduced Application Supported by Blocked Amount (ASBA) for public issues, introduced the idea of Self-regulatory organisations (SRO) under which the Association of Mutual Funds of India (AMFI) was set up,” Basu and Dalal wrote in their Moneylife tribute.

This is just a glimpse into GVR’s fascinating career where there are multiple lessons to be learned. In his book, he wrote, “During the early years after independence the country was fortunate to have gentlemen politicians and cultured ministers with a history of sacrifice, and dedicated civil servants. What we see today is a far cry from those days.”

We hope that civil servants today and future generations take note of the lessons his career has to offer. After all, there are few civil servants today who can match his dedication to public service.

(Edited by Yoshita Rao)

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