The use of letters of credit (L/C) in questionable deals involving some of India's top politicians and contractors working in and around the massive Bangalore-Mysore Infrastructure Corridor (BMIC) economic development area may re-emerge as rival politicians seek to discredit each other.

Currently controversy is focused on Chief Minister H D Kumaraswamy, who is facing questions about the value of assets he has allegedly picked up at bargain prices. The assets are already thought to have appreciated significantly and may be worth much more once the BMIC becomes operational.

Land ownsership

For his part, Kumaraswamy is threatening to disclose property deals made by his opponents and has reportedly sought details on land ownership in and around the BMIC area.

Local sources say revenue officials are currently compiling a list of which politician owns how much land.

Embarrassing L/Cs

One way that Kumaraswamy's opponents could be embarrassed is if L/Cs issued to contractors favoured by politicians are released.

According to Kumaraswamy's brother, H D Revanna, L/Cs would reveal names of BJP party leaders who had approached him last year for L/Cs when he held the post of public works minister.

Allegations

Over the last two years, allegations have surfaced suggesting that politicians representing several parties and their "favourite" contractors had been working in cahoots to persuade government departments to release L/Cs in their favour.

Contractors would approach the departments bearing letters of recommendation from their political contacts recommending that L/Cs in favour of them should be released.

Since the name of the contractor is specified on the L/C documentation, the contractor would be assured that in due course they would have the opportunity to perform the contract and earn the L/C proceeds.

This article represents the views of the author and not necessarily those of the ICC or any of the other partners in DC-PRO.