CBI cases against Jagan may be stronger than against Maran

It took three days for the Central Bureau of Investigation (CBI) to finally arrest YS Jagan Mohan Reddy, Kadapa MP and son of the late former Andhra Pradesh Chief Minister YS Rajasekhara Reddy (YSR), in Hyderabad on Sunday evening. Jagan was arrested allegedly for his evasive answers to questions put by the CBI, which forced the latter to seek custodial interrogation.

“We gave ample chance to him (Jagan) to answer our queries. He didn’t cooperate and thus it is important for us (the CBI) to have him in custody and then interrogate him,’’ a senior CBI official told Firstpost on Sunday. (At the time of writing, Jagan was to be produced before the magistrate later in the day on Monday.)

On Friday, after the first round of nearly seven hours of interrogation at Dilkusha Guest House, Hyderabad, Jagan had told media that “the CBI officials were very cooperative. They asked for some clarifications and I clarified. They have called me on Saturday as well to clarify more on the issue and I will come here at 10 am on Saturday.’’

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Jagan was questioned on Saturday and Sunday as well. On Sunday, at around 7.20 pm, the CBI announced that Jagan stood arrested.

The CBI has filed three chargesheets in a case alleging that YSR Reddy misused his powers as CM under the influence of his son Jagan in respect of the allotment of lands, mines, licences, etc, and Jagan amassed huge wealth by way of illegal gratification. He also invested the same in various companies floated by him through money laundering.

The CBI contends that like Abdul Karim Telgi — who was behind the fake stamp paper scam — there were several criminal conspiracies between Jagan and private persons for illegal gratification and thus there are going to be many cases filed against Jagan. “The corruption case against Jagan is much stronger than the one against Dayanidhi Maran in the 2G case. In Dayanidhi Maran’s case, his family business SunDirect was benefited by only one company. But in Jagan’s case over a dozen companies invested money in his Jagathi Publications and other companies and each one of them was benefited through the allotment of land, etc, by his father YSR. The CBI is going to file separate chargesheets against each individual, with Jagan being Accused No 1,’’ the CBI official says.

In the three chargesheets filed so far, Jagan has figured as Accused No 1, though the CBI had initially arrested only Accused No 2 Vijay Sai Reddy, Jagan’s family CA and financial wizard behind Jagan’s wealth build-up during the YSR stint as chief minister. The CBI upped the ante last week by arresting Andhra businessman Nimmagadda Prasad, whose company Vanpic was allotted 16,000 acres of land. He, in turn, is alleged to have invested Rs 800 crore in Jagan’s Jagathi Publications.

Apprehending his imminent arrest, Jagan had written to the Election Commissioner last week that the state government and the Congress had plotted his arrest, as the Congress feared losing the assembly byelections to 18 seats scheduled to be held on 12 June. Jagan’s mother YS Vijayamma has already held Sonia Gandhi responsible for his son’s arrest.

The CBI had filed a case against Jagan in August 2011 and since then it claims that it had gathered iron-clad evidence against him in the form of over a dozen section 164 statements from various witnesses. 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. It cannot be retracted even if the person making it claims he did it under duress.

The CBI has made a case of disproportionate income and assets against Jagan. He, with help of his father YSR, is alleged to have indulged in systematic looting. YSR, the CBI claims, under the influence of his son, leased out mines and prime land in Andhra Pradesh, allowed cement manufacturers to draw millions of gallons of water from the river Krishna and gave several government concessions to private industries as a quid pro quo in exchange for illegal gratification.

The CBI alleges that Jagan even used the Mauritius route to launder money. And for this purpose, Jagan had floated a number of companies to make quid pro quo investments possible. Even the income-tax authorities, in their assessments, show ‘unexplained’ huge cash credits to Jagan.

Thus, the CBI is proposing to prosecute Jagan under charges of criminal conspiracy, cheating, criminal breach of trust, falsification of accounts and criminal misconduct. YSR has been spared because he is no more.

From just Rs 9 lakh as income in 2003-2004, Jagan’s assets grew to a huge Rs 77.40 crore by 2009. And today, he is considered to have companies with turnover running into hundreds of crores of rupees. Besides Jagathi Publications, Jagan allegedly floated 36 companies, including Sandur Power Company, Carmel Asia Holdings Pvt Ltd, Silicon Builders Pvt Ltd, Jagathi Publications Pvt Ltd, Indira Television Pvt Ltd and Raghuram Cements Ltd, subsequently renamed as Bharathi Cements.

Jagan’s Jagathi Publications was his media business company. Thirteen companies invested Rs 844 crore in this  company, even when it had not started commercial operations. Not only this. This media company continues to get investments from these 13 companies to the tune of a total investment of Rs 1,246 crore. Worse, these companies turned out to be paper companies and have no income or verifiable means to make such large investments. The CBI, during its investigations, discovered that these companies were “briefcase companies” with fictitious addresses in Mumbai, Kolkata and Bangalore.

Given the sheer number of cases, the CBI versus Jagan saga is going to continue for years.