Local leaders involved, TDP in a huge spot over call money sex racket

Hyderabad: The ruling Telugu Desam Party faces huge embarrassment as details emerge of local leaders being complicit in a loan racket in Vijayawada that coerces women into flesh trade to repay the debts.

The names of TDP MLA Bode Prasad from Penamalur in Krishna district, MLC Buddha Venkanna, his brother Buddha Nageswara Rao, kingpin Venigalla Srikanth, a former Congress minister’s right-hand man, Dudala Rajesh and chairman of West Godavari Zilla Parishad MullapuDi Bapi Raju have figured in the controversy that has so far taken the state by storm. Buddha Venkanna and Bode Prasad, though, have vehemently denied the charges against them.

The racket, which has apparently been running for several years, came to light with a woman drawing the attention of Vijayawada police commissioner Damodar Gautam Sawang on how she was forced into a sex racket.

Sawang told Firstpost that three out of seven accused have already been arrested and several others were being questioned. The police have booked the accused under criminal conspiracy (Sec. 120), cheating (420), rape (376), extortion (384), sexual harassment (354) and defamation (120 B), of IPC.

In her complaint, the victim said the lenders charged exorbitant interest on her loan and when she failed to repay, they forced her into flesh trade and even ordered her to service their clients. So far, investigation has revealed that most of the alleged offenders have strong political backing, said the police.

While as many as 120 arrests have been made across the state in different cities in the call money racket, the police have formed special teams to investigate into the crime, according to director-general of police J V Ramudu.

“We will not spare anybody. We will take stern action if those involved in the call money case. We will not hesitate even to slap the new Criminal Amendment Act against the offenders, who are involved in assaulting women sexually,’ he had said.

Under pressure from the opposition and also the National Human Rights Commission,  Chief Minister N Chandrababu Naidu has instituted a probe by a retired High Court judge. As the Winter Session of the Parliament kicked off, the government also came under fire for forcing to send Sawang on leave.

What is call money?

Anybody who needs money can make a phone call to obtain instant loan. The lender delivers the money at the doorstep of the borrower. The conditions laid down in the promissory note are the real catch. The interest rate ranges between 120 and 200 per cent. And, in some cases, it can even go up to 300 per cent (in case of low valued surety or collateral security). The borrower needs to pledge a lot of documents of property, vehicles and other valuables towards collaterals for securing the loan. The money can be recovered by the lender anytime.

When the borrower cannot pay, the sureties are appropriated and pledged properties are encashed. The lenders earn huge sums by doing so.

Though there is no official confirmation for estimating the turnover of the call money racket, it is said that at least Rs. 750 cr to Rs. 1,000 cr could be changing hands annually across the State.

Lending of money for higher interest rates in a micro-economic model is a common place. However, goons in Vijayawada made it dubious by coercing women into sexual harassment, said the Commissioner.

The lenders usually take general power of attorney (GPA) and pledge registration and adopt all methods to keep the borrower on tenterhooks.

In case the borrower is unable to repay, vehicles, houses and other movable and immovable properties, pledged as guarantee, would be seized by the lenders.

A victim informed the police that her 450 sq. yard house site was taken and also that she had paid Rs. 9 lakh for clearing a loan of Rs. 1.50 lakh and she was not still rid of the debt.

When the first case was probed, the police did not realise that they had just scraped the surface of a bigger racket.