YSR, Jagan Mohan indulged in systematic looting, says CBI

Former Andhra Pradesh Chief Minister late YS Rajasekhara Reddy and his MP son YS Jagan Mohan Reddy indulged in ‘systematic looting’. They leased out mines and prime land in the state, allowed cement manufacturers to draw millions of gallons of water from the Krishna and provided several concessions to private industries in exchange of benefits. A part of the illicit money was laundered through the Mauritius route, according to the FIR filed by the CBI in connection with wealth amassed by Jagan. The agency’s FIR follows a directive of the Andhra Pradesh High Court (dated 10 August, 2011) on separate writ petitions filed by two politicians – P Shankar Rao, MLA, Secunderabad Cantonment, and former MP Yerran Naidu. [caption id=“attachment_65473” align=“alignleft” width=“380” caption=“The petitions say Jagan floated a number of companies to make quid pro quo investments possible. PTI”]  [/caption] The petitions say Jagan floated a number of companies to make quid pro quo investments possible. He, with the help of his father, gave away prime properties for SEZs, facilitated irrigation contracts, relaxed rules for real estate ventures and mines. The Income Tax authorities, in their assessments, show ‘unexplained’ huge cash credit. The two writ petitions, which are now part of the CBI FIR, rip apart the father-son duo and give point-by-point details on how the two allegedly adopted ‘several ingenious ways’ to amass wealth. The CBI has slapped charges of criminal conspiracy, cheating, criminal breach of trust, falsification of accounts and criminal misconduct against Jagan and several others. There can be no case against his father, because he is no more. Jagan is perhaps the richest MP with unaccounted wealth. His Income Tax returns for 2003-2004 show annual income of only Rs 9 lakh. But it went up phenomenally to Rs 77.40 crore in 2009 — this according to his disclosure before the Election Commission before he contested and subsequently won from Kadapa parliamentary constituency. Jagan used his father’s influence as Chief Minister between 2004 and 2009 to get into shady deals, according to the FIR. He allegedly floated 36 companies, including M/s Sandur Power Company, M/s Carmel Asia Holdings Private Ltd, M/s Silicon Builders Private Ltd, M/s Jagathi Publications Private Ltd, M/s Indira Television Private Ltd and M/s Raghuram Cements Ltd, subsequently renamed as M/s Bharathi Cements, says the FIR. It goes on to elaborate how he used these companies for laundering money that he received as quid pro quo. See it for yourself: • Jagan raised Rs 797 crore through M/s Sandur Power Company. How? i) Two Mauritius-based companies – M/s Pluri Emerging Company and M/s2i Capital - bought Rs 124.60 crore worth equity shares of Rs 10 each at a premium price of Rs 61 each. Later Jagan bought back these shares from the Mauritius companies and the companies disappeared. This is suspected to be the bribe amount routed through Mauritius. ii) Jagan sold out 82 lakh shares of M/s Sandur Power Company at Rs 675 per share to five companies. This was a ‘fictitious transaction’, as these five companies later merged with M/s Keelawn Technologies in which Jagan has a major stake. Keelawn paid only Rs 4 crore to buy these five companies, while they had invested Rs 533 crore in M/s Sandur Power Limited. Continues on next page.. • M/s India Cements invested Rs 5 crore in Jagan’s M/s Carmet Asia Holdings Pvt Ltd to buy shares at a huge premium of Rs 252 per share. In return, the FIR alleges, M/s India Cements got land lease renewed in Kadapa District, given permission to draw 10 lakh gallons of water from the Krishna and 13 million cubic feet of water from Kagna River. • Nimmagadda Prasad, promoter of M/s VANPIC Projects Private Ltd, bought shares worth Rs 20 crore in M/s Carmel Asia at a premium of Rs 252 per share. In return, his company was allotted 15,000 acre of land in Prakasam district and was given several concessions under Stamp and Registration Act. [caption id=“attachment_65476” align=“alignleft” width=“380” caption=“The CBI’s FIR goes on to count endless corrupt deals that the father-son duo was involved in. Screengrab/ibnlive”]  [/caption] • M/s Penna Cements Group bought Rs 23 crore worth shares in M/s Carmel at Rs 252 a share. In return, he was allotted huge chunk of land with prospecting licence for limestone in Kurnool District. He was also sanctioned mining lease for limestone in 822 acre of land in Ranga Reddy District. • M/s Jubilee Communications of Lagadapati Sridhar invested Rs 20 crore in M/s Carmel the similar way. Sridhar’s company did no business, excepting investing Rs 20 crore in M/s Carmel and Rs 30 crore in another Jagan’s company M/s Jagathi Publications. • Jagan’s M/s Classic Realty Ltd bought a commercial complex in the heart of Bengaluru, earning rent of Rs 30 crore per annum and valued at least Rs 500 crore, for just Rs 206 crore from M/s mantra Developers. In return, M/s Mantri was allotted to take M/s Brahmani Infra Tech under the guise of a technical collaborator in AP and thus becoming owners of 250 acres of prime land in Hyderabad. M/s Classic did only this deal throughout its existence. •Jagan allegedly divested his shares in M/s Bharati Cements, another company of his, in favour of a Swiss company M/s Parficim SAS and got huge amounts running into thousands of crores. A French company acquired the Swiss company, but the management is still left with Jagan though on papers the French Company is a major stakeholder. • M/s Dalmia Cements invested Rs 50 crore in M/s Bharati Cement at a premium of Rs 110 a share in 2007 and Rs 1440 a share in 2008. In return, M/s Dalmia Cements allegedly gets a mining lease in 407 hectare of land in Kadapa district. * Jagan’s Jagathi Publications was his media business company. Thirteen companies invested Rs 844 crore in the media company, even when it had not started its 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’s FIR goes on to count endless corrupt deals that the father-son duo was involved in. Even Income Tax authorities, while assessing Jagan’s media company, reveal that eight companies, who invested in Jagan’s media company, are ‘simply bogus’. These companies are ‘briefcase companies’ and fictitious addresses in Mumbai, Kolkata and Bangalore. The CBI began its investigations by raiding residences and commercial complexes and offices of Jagan in AP, Bangalore and elsewhere. They are assessing the documents, computer records and other valuable articles seized during the raids.