Black money funds political parties: Rahul Bajaj

Industrialist and Member of Parliament Rahul Bajaj on Wednesday added a new dimension to the debate over black money, saying it funds political parties.

"Where does the political party gets its funds from? Come on, I've been in Parliament for four years. It's not cheques, it's not by small members. All money comes in through black money. Black money doesn't come from heaven," Bajaj Auto chairman said addressing a CII conference.

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However, he maintained that the Bajaj family does not fund parties in cash and pays only through cheques to ensure accountability.

He further hinted that promoters of companies also indulge in diverting some of the company's money illegally turning it into black money in the economy.

"Corporates do take it out from the company. Most of us know some of the ways of taking that money out...taking out black money from a company is cheating minority shareholders," he said.

Bajaj's comments come even as a debate rages nationally over black money of Indians stashed in Swiss Bank accounts, with demands being made to get the money - quantum of which is unknown but speculated to be huge - back to India.

Bajaj said principles of corporate governance cannot help if the top management of a company, including its promoters, chairmen and CEOs, is corrupt and further expressed regret that nobody like to talk about this facet.

The ex-president of industry body CII also made public his reservations clear about the role of industry associations, naming CII and FICCI. He said they take no action against its members indulging in corruption and do not even censure the wrongdoers.

However, he also spoke against the prevailing "presumption" in government to see every promoter as a "crook" and asked for better legislative systems to boost the economic climate.

"One bad egg should not mean that you shackle the entire corporate sector. The 95 per cent who do business well should not suffer," he said, pointing out to the Satyam case involving R Raju and the company's external auditors PricewaterHouse Coopers.

"Raju shamed us, PwC shamed the auditing fraternity. That (PwC's misdoings) was either corruption or downright incompetence," he added.

On independent directors, he said, many-a-time, they are cronies appointed by the promoters themselves. Independent directors should decide whether "to be led or to lead", he said.