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India's Supreme Court rejects Congress anti-graft chief

The raft of corruption cases, which span irregularities in telecoms licensing to a housing scam for war widows, has weakened the ability of the government to push economic reforms.

NEW DELHI // India's Supreme Court on Thursday quashed the appointment of the country's top anti-graft official for involvement in a palm oil import case, in another rebuke for the Congress-led coalition government.

The rejection of PJ Thomas's appointment as central vigilance commissioner comes as Prime Minister Manmohan Singh's government is trying to defend itself against a series of graft scandals including a US$39 billion (Dh143bn) telecoms licence scam.

The main opposition Bharatiya Janata Party, seeking to pile the pressure on its rival ahead of state assembly elections in April and May, said Mr Singh owed an explanation to the nation for nominating an official facing allegations of wrongdoing to lead the fight against graft.

"It is a rebuke to the prime minister and the home minister. Governance with transparency and accountability has completely been lost," said the BJP spokesman Nirmala Sitharaman.

The raft of corruption cases, which span irregularities in telecoms licensing to a housing scam for war widows, has undermined investor confidence and weakened the ability of the government to push economic reforms.

Regulatory concerns in Asia's third largest economy, combined with the global economic slowdown, have hit foreign direct investment and contributed to making the Mumbai stock exchange the worst performing of the world's major share markets.

The top court said the appointment of Thomas was made last year without taking into account a 1992 case in which he, as a state official, had been accused of signing a deal to import palm oil from Malaysia at inflated prices.

Mr Thomas had rejected calls from the opposition to resign, saying the charges against him in the palm oil case were baseless. However, the federal law minister, Veerappa Moily, said Mr Thomas had submitted his resignation following the court decision.

Mr Singh's government had earlier sought to defend Mr Thomas' appointment, saying it was not aware of the allegations against him, and that a government panel had cleared his appointment.

"We hereby declare the recommendation by the high powered committee ... does not exist in the eyes of law," the court, headed by Chief Justice SH Kapadia, said.

"Consequently, the appointment of PJ Thomas as chief vigilance commissioner is quashed," it said.

The decision was the latest in a series of setbacks for Mr Singh who has faced increasingly harsh questions about his leadership despite a reputation for personal integrity.

Mr Singh last month said he was not a "lame duck" leader, soon before the government gave in to an opposition demand to set up a parliamentary investigation into the telecoms scam, considered to be independent India's biggest corruption scandal.

The court decision will be another weapon for the BJP to beat the government with in the campaign for a clutch of state elections beginning next month.