Paying the price

Published : Jun 29, 2012 00:00 IST

It is a story of an insistent son and an indulgent father. The son represented Generation Next, seeking to make quick money and reach the pinnacle of power. The father was a hard-as-nails politician, a master of all that he surveyed in the political firmament of Andhra Pradesh.

This is the crux of the Central Bureau of Investigation's (CBI) narrative in the remand report it submitted to the Court of Principal Special Judge for CBI cases after arresting Y.S. Jaganmohan Reddy, the 39-year-old Member of Parliament from Kadapa. What it did not mention was the helplessness of the Congress leadership to step in and stop the wrong-doings of a Chief Minister as he was instrumental in sending 33 Congress representatives from the State to the Lok Sabha.

Y.S. Jaganmohan Reddy and his father, Y.S. Rajasekhara Reddy, who was holding a high constitutional position, have adopted several ingenious ways to amass illegal wealth which resulted in great public injury, the remand report said.

Much stronger words were in store as the narrative proceeded. Late Y.S. Rajasekhara Reddy, during his stint as Chief Minister of Andhra Pradesh from May 2004 to August 2009 abused his public office to benefit his son.

The modus operandi followed by the duo was to dole out public properties, licences, allotting/granting various projects, Special Economic Zones, mining leases, ports, real estate permissions and other benefits to the persons of their choice, violating established norms and procedures in the government with a clear understanding of quid pro quo.

The beneficiaries, in turn, have given bribes to Y.S. Jaganmohan Reddy under the guise of purchasing shares in a series of companies floated by him at huge and unsubstantiated premiums.

A few days before his arrest, Jagan debunked the CBI's claims as charges that are not backed by even a shred of evidence. For instance, Nimmagadda Prasad was accused of investing Rs.350 crore in the Sakshi media group owned by Jagan as a quid pro quo for the allotment of over 15,000 acres (one acre is 0.4 hectare) of land for his VANPIC (Vadarevu and Nizampatnam Ports and Industrial Corridor) project.

Nimmagadda earned Rs.600 crore by selling his shares in Bharati Cement in which he invested Rs.280 crore. He invested Rs.350 crore in Sakshi in April 2010, eight months after my father passed away. How can it be a quid pro quo arrangement? Jagan asked.

Jagan began nurturing political ambitions at the age of 31 when, in 2004, he insisted on contesting the Kadapa Lok Sabha seat, the family's pocket borough, then held by his father's younger brother, the low-profile Vivekananda Reddy. He finally had his way in 2009 and won the seat.

Operating his businesses out of Bangalore all the while, Jagan was by then presiding over a vast business empire encompassing interests in cement, power, media, mines and real estate.

He declared his annual income as Rs.9.19 lakh in 2003-04 and showed assets worth Rs.77.40 crore in 2009 to the Election Commission.

He was never shy about his aspiration to play a leading role in public life. In fact, the Congress high command was shocked when he went about collecting signatures of Congress legislators supporting his candidature for the Chief Minister's post even as his father's body lay in state for Sonia Gandhi and Prime Minister Manmohan Singh to pay homage.

His troubles started in early 2011 when the Andhra Pradesh High Court ordered the CBI to investigate charges levelled in petitions filed by P. Shankar Rao, a Congress Member of the Legislative Assembly, and P.K. Yerran Naidu, former Telugu Desam Member of Parliament. They accused him of exercising undue influence over his father, taking illegal gratification, floating shell companies and indulging in money laundering.

Its probe revealed a maze of companies, acquisitions and innumerable money transactions. Jagan took over the Bangalore-registered Sandur Power Company, valued at Rs.150 crore (Rs.6 crore for one megawatt for the 22.5 MW hydel company).

But Nimmagadda Prasad, an investor, purchased 21.42 lakh shares at a premium of Rs.650 per share and paid Rs.140 crore to Sandur Power Company. As a reward, he was not only allotted land for VANPIC but gifted concessions such as change of boundaries and relaxations under the Stamps and Registration Act.

A heavy price was paid for this deal. Mopidevi Venkataramana Rao, then Minister for Infrastructure and Ports, who signed the government orders, is now in judicial custody. He is charged with manipulating files to benefit Nimmagadda Prasad, who is himself in the Chanchalguda jail in Hyderabad.

That is not the end of the story, the CBI says. Sandur Power offered 1.75 crore equity shares of Rs.10 each to two Mauritius-based companies M/s 2i Capital and M/s Pluri Emerging Company at Rs.61 a share. Jagan bought these shares back at a throwaway price, and the two companies have since disappeared.

The list of the CBI's allegations is seemingly endless. The India Cements, for example, invested Rs.5 crore in M/s Carmel Asia Holdings by purchasing shares at a huge premium of Rs.252 apiece. In return, it got the land lease renewed in Kadapa district and was permitted to draw large quantities of water from the rivers for its cement plants.

Jagan's woes may increase now since the Enforcement Directorate has entered the picture. It is probing foreign investments in some of the 15 companies. It has addressed letters rogatory to courts in Luxembourg, Cayman Islands, Virgin Islands, Singapore, Mauritius and Dubai seeking information about bank deposits and money laundering.

Clearly, the YSR Congress president will have his hands full fighting legal battles for the next few years and perhaps be in and out of jail. This is exactly what the Congress high command wants until the 2014 Lok Sabha elections are over.

S. Nagesh Kumar

Comments

Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide to our community guidelines for posting your comment