In the entire ICICI Bank – Videocon controversy what I have been admiring most is the PR strategy being followed by ICICI Bank which according to me is shrewd and manipulative.
Ever since the news broke out that ICICI Bank was part of a consortium of banks that had lent Videocon Industries Rs 3250 crores, of which the whistleblower claimed Rs 325 crores ( exactly 10% ) had come back to NuPower Renewables, the firm in which Deepak Kochar was a partner along with Venugopal Dhoot of Videocon it has been interesting to note the ICICI Bank PR releases. The actual mechanics of what is being called the ‘quid pro quo’ which means ‘ for ‘ in Latin must be quite familiar to all the readers. Quid pro quo is a frequent tactic to compensate anyone for what might seem a legal and kosher transaction. This is how it goes.
A has been done to Person X by person B. However B cannot be directly paid for as it could draw unnecessary attention. So person B nominates person A to be the beneficiary. In real life, person A and B are likely to be very close, so that there is no question of losing that money. Person A has a firm or company and requests X to invest in that company. Person X invests and later quits the company since he has completed his duty of returning It is a very common ploy in transactions of this nature.
Here is an example that I once heard of twenty years ago, although I can’t swear to its authenticity. Nevertheless, it makes a great example. A is Chairman of the Indian counterpart of a multinational company. The overseas company wants to buy a majority stake in A’s company but the share price is high. So, the overseas company asks A the Chairman to undervalue the shares which he does. The company promises to compensate him generously for doing this. Then they ask him to buy stock in a relatively unknown company. To compensate A for helping to undervalue the shares, the overseas company buys the unknown company at an unusually high price. A who is a major shareholder in the unknown company sells his shares to the overseas company at that unusually high price and later quits the unknown company. The quid pro quo is complete.
I would like to focus on how ICICI Bank has handled the situation since it first blew up by appearing in the Indian Express a few weeks ago.
Misdirection in Magic
Psychological misdirection in Magic is an important ploy to distract the audience from what is going on. It is a form of deception where if the audience can be made to focus on one thing, they may lose interest in the surrounding deception. A typical example of misdirection in magic is the vanishing ball trick.
In the case of ICICI the constant hammering in the press that the board had declared the loan kosher, and that all due processes for the loan to Videocon were above board is the misdirection. Because that is not the question the public was asking. These major announcements in the press by the Chairman of ICICI Bank did manage to quell the storm created by the initial article on the controversy. I think it was a very smart strategy to avoid the question being asked, and give the answer to another question.
What the ICICI board refused to give any information on was the transaction between Venugopal Dhoot and Nu-Power which is known to be owned by close relatives of the ICICI Bank Chairman. Although to be fair, this is technically beyond their purview.
The problem with this is that when misdirection is employed repeatedly the audience watches for it and is no longer deceived. You will notice this is true of magic as well. When the same trick is performed many times, you kind of guess how it is done. The same might have happened in the ICICI bank case, where now the entire public is asking the real question regarding the transfer of funds to Nu-Power which is at the crux of the issue, rather than the procedure for the loan given to Videocon. This is also being termed conflict of interest in the newspapers. The conflict of interest arises because of the possibility of it being a pay-back for the loan given as explained by the whistleblower and not the procedure followed for the loan itself which itself may or may not be kosher.
Cognitive illusions in the practice of magic give us new learnings into the psychological and neural principles of perception, attention, and cognition. When used in commercial cases like the ICICI – Videocon case it is more appropriately called Social Misdirection.
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