In the ongoing H.D. Deve Gowda vs Infosys spat, the former prime minister had alleged a "nexus" between Maharashtra governor S.M. Krishna and the IT major. Now, a curious fact has emerged from the mandatory affidavit declaring assets filed by Krishna when he contested the assembly elections from Chamarajpet (Bangalore Urban) in 2004. In the affidavit dated March 30, 2004, under the column bonds, debentures and shares in companies, Krishna declares that he has invested Rs 1,50,000, and his wife Prema Krishna Rs 4,23,859, in Infosys Technologies.

Krishna says the Infosys shares were acquired before he became CM, adding that he sold the shares after he lost the 2004 Assembly polls.

Incidentally, Krishna, as per the affidavit, has not invested in any other technology company.

The affidavit, of course, does not reflect the interests of the other members of S.M. Krishna's family in Infosys since they are not dependents. Krishna has two daughters and one of his sons-in-law, V.G. Siddhartha, is a successful businessman. He started Global Technology Ventures in 2000 and has been a successful stockmarket investor. He had earlier taken over Sivan Securities Limited and turned its fortunes around. He also heads the Amalgamated Bean Coffee Trading Company that owns the Coffee Day chain across the country.

When Outlook contacted Krishna, he said the figures reflected in the affidavit was the "market value of the shares on the day" and that the shares were acquired prior to him becoming the chief minister in 1999. He also said he had disposed of the shares a year ago after he lost the assembly elections. So, crucially, during his tenure as Karnataka chief minister, he did hold Infosys shares.

However, it is not clear whether the shares were purchased at IPO value or at market price. Looking at Infy share prices historically, the IPO price in February 1993 was about Rs 95; on March 30, 2004, when Krishna filed his affidavit, it was approximately Rs 4,938; its current value (on November 10, 2005) is around Rs 2,638 (not adjusted for 3:1 bonus issued in July 2004).

There is no overt illegality that one can attribute to the investment of the Krishnas because Infosys is a publicly listed company and as private citizens they are entitled to invest in any company that they think would yield good returns. But, there may be an ethical issue when it comes to a person holding public office. Was there a clash of interest? Did Krishna's business interests in the company make him biased towards the company when he was CM? Did it cloud his neutrality and colour his judgement as his political rival Deve Gowda has charged?

The onus is on Deve Gowda and other critics to prove the allegations. All that we know is chairman and chief mentor of Infosys, N.R. Narayana Murthy, was appointed chairman of the Bangalore International Airport Limited (BIAL) during Krishna's tenure as chief minister and that the Bangalore Agenda Task Force (BATF) that Krishna set up was headed by Infosys CEO Nandan Nilekani. In the present coalition set-up, these two organisations have come under fire. Right from the dispute over the excess land notified to set up the international airport, to the resignation of Murthy following Gowda's allegations, the BIAL has been a hot topic all through. The tenure of the BATF, of course, was not renewed by the present dispensation.

Krishna claims the fact that he had invested in Infosys never coloured his judgement. "Infosys never got preferential treatment. All IT companies, minor or major, were given the same treatment as recommended by the national task force on IT," he said and added that declaring the shares in the affidavit is "transparency per se".

But there are some rigorous practices in place in Western democracies when it comes to personal assets and public office. This is not to say they are always followed but Jayaprakash Narayan, national coordinator of ngo Lok Satta and member of the Administrative Reforms Commission set up by the Union government, offers the example of Jimmy Carter: "When Carter became president of the US, all his assets were transferred to a blind trust managed by a board of trustees. Carter did not keep track of his assets. After four years, when he stepped down as president, he realised that he had become a pauper. The trust had managed his assets poorly. It is another story that he rebuilt his life. Even the resignation of British minister David Blunkett last week, for not seeking the advice of the ethics commissioner, could be interesting to note in this context," he says.

Narayan clearly warns though that we cannot use such exacting standards of accountability to judge our politicians. "Systems are beginning to fall into place in India. We should take care not to drive away someone who has honestly declared his assets. There are many politicians in India who hide their investments. We certainly need to aspire for higher standards in public life, but it is a little too early to expect."

Trilochan Sastry, an iim Bangalore professor who's also with the Association for Democratic Reforms, says: "If Krishna had purchased the shares at market price, then there is no issue. But if it had been allotted under some special consideration, then there is a problem."

When Outlook contacted some Karnataka politicians on the issue, they maintained a neutrality quite unusual to their strident nature. While some admitted that in a politically volatile environment, when fresh realignments are taking place and when there are rumours that Krishna may return to state politics, they did not want to take a risk. Here's how an Opposition party politician put it: "Most senior politicians have invested in different companies and the fact that Krishna has duly declared it makes it less dangerous. Will somebody probe Deve Gowda's benami investments? Is he completely innocent of the charges that he his making against Krishna?" he asks.

There is also an uneasy quiet in the IT industry after the recent public spat over Infosys. Some insiders argue that it was Krishna who had cultivated the IT industry and credible people within it than the other way round, because it suited his "white-collared image" and gave him loads of legitimacy, besides a lot of good press.