It's the archetypal rags-to-riches story. In 1962, Muthukrishna Varatha Raja, a small-time businessman from Thanjavur district in Tamil Nadu, first started dabbling in the cashew trade with a Rs 3 lakh loan from Indian Bank. More than three decades later, MVR, as he is referred to, self-admittedly controls 40 per cent of the world trade in cashews. With friends in high places and cutting across political parties, getting to the top hasn't been difficult for the Singapore-based NRI. But staying there may be difficult. Today, MVR owes Rs 375 crore to Indian Bank, his accounts have been frozen and the CBI and Enforcement Directorate (DOE) are hot on his trail. In a candid telephonic interview, the 57-year-old cashew magnate spoke to Charu Lata Joshi about his friends, foes and finances. Excerpts:
The CBI has charged you with defrauding Indian Bank of nearly Rs 400 crore and the DOE has also slapped a case for over-invoicing against you.
The main charge that the DOE has pressed against me is about non-realisation of export bills. They have simply summoned me. I have told them that I am an NRI and have approached the Madras High Court to quash the summons. So the matter is sub judice. As far as the CBI matter is concerned, they haven't summoned me at all. They have not got in touch with me. I have not received any official intimation from them. I have generally heard from people like you that they are probing the affairs of Indian Bank.
Ten of your companies figure in the RBI's list of Indian Bank's top-20 defaulters. Do you deny your role in the scam?
I don't think this is a scam at all. It is simply being painted as a scam. What has happened is that there are some leading accounts which may, due to various business-economic factors, go through some ups and downs. The bank has to cooperate in these periods. The new chairman suddenly stopped all financing to these companies and froze the accounts. Meanwhile, the CBI started investigating. This was done without giving any time to the clients. It is not that we have said we won't pay. But we need time and we have offered the bank a rehabilitation scheme.
Do you mean to say that the new CMD is wrong in preventing his bank from bankruptcy?
The new CMD just wants to let down Gopalakrishnan. According to my knowledge, Gopalakrishnan is a very clean and honest banker and he does not expect anything from anybody. Had he continued, all these problems would not have arisen. In fact, he was instrumental in raising foreign exchange levels.
It is said that you used your money power to ensure that Gopalakrishnan continued to get extensions?
That is absolutely wrong.
But isn't it true that you enjoy immense political clout in India?
I am not a politician. I am a businessman. But yes, whenever these politicians come here (to Singapore) we entertain them and take care of them. For instance, Mrs Margaret Alva was introduced to us by former Indian high commissioner D.M.C. Nayar. She is a very nice lady. We have invited her to our residence and she is quite close to my wife. Her husband also comes to Singapore and we extend hospitality to him.
Are there others? G.K. Moopanar, Narasimha Rao and other Congressmen have been mentioned...
Yes. I do enjoy a good rapport with most of these leaders. When the former prime minister was in Singapore in 1994, we hosted a dinner for him. And then he invited me for his grand-daughter's wedding in Hyderabad. Both my wife and I attended the wedding and then flew to London since I was not keeping well. I am certainly quite close to Mr Moopanar also. We both belong to same district, Thanjavur, in Tamil Nadu. But at no time have I taken any assistance from him. You see, I am an absolute Congressman. My father was an active participant in the district Congress politics, so it is not unusual for me to know these people and be close to them.
But isn't it unusual for the CBI to be prevented from registering cases against you and for you to be continuously granted loans despite defaulting?
I don't know about that. There was nothing wrong in what the former CMD did. My feeling is that some political rivals may be behind this. Gopalakrishnan belongs to a Congress family and is a man of the TMC. The main thing is that these people want to defame Mr Moopanar. Though my relations with Chief Minister Karunanidhi are quite cordial, maybe the Karunanidhi faction is behind it. But I am closer to Moopanar.
It has been alleged that you diverted money to politicians through Chandraswami and certain hawala operators in Mumbai?
I don't have any particular relationship with Chandraswami. I met him first when he came to Singapore at a dinner hosted by the Indian high commissioner. We then invited him over to our place at Sarangoon Apartments. This was probably two years back. But we met him because he was supposed to be a holy man. He did offer to give us any political assistance we needed in India. But I did not use any assistance from him.
There are suggestions that there were financial transactions between your five benami companies in Rotterdam with an LTTE front company. The funds you received from Indian Bank have also been transferred to your companies in the UK.
I do have five companies based in Rotterdam where we just have current accounts. We operate through Bank Meese in Rotterdam and we don't have any limits on the transactions. But to say that I have connections with the LTTE is totally incorrect. We are purely business people and I deny this.
But you have had old dealings with Sri Lanka and there is information with intelligence agencies that you put in money in the shipping business which ultimately went to LTTE front companies.
We are not in the shipping line. I totally deny any involvement with the LTTE. These are all rumours which are being floated.