Noose tightens around Jagan; CBI seals key statements

Hyderabad: The Central Bureau of Investigation (CBI), which is probing scams involving Jagan Mohan Reddy, son of the late former Andhra Chief Minister YS Rajasekhara Reddy (YSR), believes it has iron-clad evidence in the form of over a dozen section 164 statements from various witnesses and is leaving no stone unturned to keep them secret . A statement made under section 164 of the Criminal Procedure Code (CrPC), done under the supervision of a magistrate, is valid evidence in a court of law and it cannot be retracted even if the person making it claims he did it under duress. The section 164 statements that the CBI claims to have recorded are wrapped in a veil of secrecy and have not even been disclosed in the first charge sheet filed against Jagan and 12 others on 31 March. Thanks to this secrecy, Special Judge Nagamarutha Sharma recently granted bail to Vijay Sai Reddy, the CA and financial wizard behind Jagan Mohan’s wealth build-up during the years his father was chief minister. Reason: the CBI would not disclose why it wanted his bail denied by giving evidence. On Monday, the CBI filed its second charge sheet in the Jagan case. [caption id=“attachment_286386” align=“alignleft” width=“380” caption=“Reddy is accused of getting investments in his firms due to his father’s influence. AFP”]  [/caption] The section 164 statements the CBI has managed to obtain seek to close the circle between alleged government favours shown by YSR to corporates and their investments in his son’s companies, including Jagathi Publications and Bharathi Cements. The Jagathi group of companies runs 23 colour editions of the Telugu Sakshi newspaper (one for each district in Andhra Pradesh) and the Sakshi TV channel. Last fortnight, the CBI was desperate to keep Sai Reddy in prison, but it wasn’t able to justify it on the basis of the first chargesheet filed. The CBI made veiled references to the section 164 statements, arguing that Sai Reddy’s role was the biggest in the conspiracy and that if he was given bail, he might try to influence the witnesses who had given those statements. Not convinced with the CBI’s oral arguments, Special Judge Sharma had then asked the CBI: “Why don’t you give me these statements and extra evidence that you have in a `sealed’ cover. I will read the evidence and will return the same in a `sealed’ cover.’’ The CBI did not do so even at the risk of Sai Reddy getting bail. However, the CBI later moved the Andhra Pradesh High Court and got the bail cancelled. The trial court will now hear the bail plea again. Jagan Mohan Reddy’s lawyers tried to get hold of these statements by approaching the court. The CBI, however, strongly opposed the move and succeeded. Jagan Mohan’s lawyers have so far maintained that he was a private businessman and he had nothing to do with the government run by his father YSR. He was legitimately running a business venture and people invested in his company because they saw good prospects. The `link’ between his father distributing government largesse and his son receiving money in return is missing, Jagan’s lawyers have contended. The CBI believes that the section 164 statements it has obtained provide the missing link. One such statement given by Poondi Narayanan Sudharshan, senior director of Deloitte Touche Tohamatsu India Pvt Ltd, reveals that Jagathi Publications had pre-dated its `valuation’ report. Deloitte had been appointed to evaluate Jagathi Publications, and gave a figure of Rs 3,000 crore some time in April 2008. But the same valuation was pre-dated to November, 2007. “We have completed this engagement (valuation) in mid-April 2008. To the best of my memory, Sri VS Reddy (CA of Jagan Mohan Reddy’s family and founder director of Jagathi Publications) telephoned me and strongly urged me to date the report as at November, 2007,’’ Sudharshan is believed to have said in his section 164 statement. “The valuation report was issued with the explicit understanding that the report was for internal use only and cannot be relied upon by any third party. We are given to understand that this report has been circulated to potential investors,’’ Sudharshan adds. Four persons associated with a company called Vanpic, owned by Nimmagadda Prasad, who is also named in the FIR, have also reportedly given their respective section 164 statements. These statements  allegedly link the allotment of 16,000 acres of a coastal corridor to Vanpic by YS Rajasekhara Reddy and a subsequent Rs 800 crore investment in Jagan’s companies, including Jagathi Publications (Rs 350 crore) and Bharathi Cements (Rs 450 crore), by Nimmagadda Prasad. Auditor and Company Secretary Nagendaran Jagannathan has allegedly told the CBI that Vanpic invested in Jagathi Publications despite strong opposition from some directors. It wasn’t a wise investment, but he and others were told by Nimmagadda Prasad that the investment had to be made in Jagathi Publications . Vanpic was allotted 16,000 acres of land in several installments. CBI sources said there was a pattern whereby Vanpic made investments in Jagathi Publications or Bharathi Cement every time it was allotted some land. The CBI is further investigating the money trail. Four statements (one by an old director of the company and three employees) have come from Keylawn Technology, a group of six companies. It is alleged that Jagan forced the owners to sell the company at Rs 1 per share. The line of defence taken in Jagan’s case is simple: All the shareholders of Jagathi Publications are legitimate and they will be paid dividends as and when the company issues them. However, an NRI based in Dubai, Madhav Ramachandran, has stated in his section 164 statement that YS Rajasekhara Reddy and Sai Reddy had come to Dubai and they had held a meeting to exhort NRIs to invest in Jagathi Publications. He invested Rs 17 crore in 2007 and he has not got a single penny in return. The CBI is expected to file more charge sheets in the case, as it is awaiting responses to its Letters Rogatory issued to Singapore, Mauritius, Hongkong, Luxembourg, UK and British Virgin Islands. The money trail linked to these section 164 statements will complete investigations against Jagan.