CBI to follow multiple leads in Jagan case

The Central Bureau of Investigation (CBI), which is probing the financial misdeeds alleged to have been committed by Kadapa MP YS Jagan Mohan Reddy, has a huge task as it has listed out instances of quid pro quo investments spanning five years between 2004 and 2009 when his father, YS Rajasekhara Reddy, was the chief minister.

Each instance has a potential to become a separate case if the CBI is able to establish the truth.

According to the FIR issued by the investigative agency, since May 2004 Jagan started floating companies - at least 36 known and many more unknown - with the sole objective of laundering the ill-gotten wealth obtained by misusing the office of his father.

“Apart from exercising influence with his father, he also exercised his influence with other ministers and other top bureaucrats in the government for benefiting selected persons, violating rules and regulations and received gratifications/corrupt money through various methods,” it said.

According to the CBI, most of the money was disguised and routed through purchase of shares in various holding companies floated by Jagan, namely Sandur Power Limited, Carmel Asia Holdings Private Limited, Silicon Builders Private Limited, Jagathi Publications Private Limited, Indira Television Private Limited and Bharathi Cements Corporation Limited. Jagan owes his growth in personal networth and investments post 2004 to some of these companies.

71 firms and individuals
The CBI has named 71 firms and individuals, including Jagan, as accused in the ongoing case. However, it has also kept the list open by naming directors and promoters of unknown companies, unknown public servants of government of Andhra Pradesh and unknown others.

Oddly, CBI joint director VV Laxminarayana has given a clean chit to L Sridhar, brother of Congress MP Lagadapati Rajagopal, who invested Rs 30 crore in Jagathi Publications, when a section of media pointed out the absence of his name in the FIR. Sridhar though was questioned during the preliminary inquiry conducted by the agency.

Prominent companies and individuals named in the report, including Penna group of companies, Aurobindo Pharma, PVP Business Ventures, Hetero, India Cements, Ramky, Nimmagadda Prasad group of companies, Mantri Developers and Dalmia Cements, are alleged in the FIR as beneficiaries of allotment of lands, mines, projects and other favours by the YSR government.

The CBI alleged the commission of cognisable offences of criminal conspiracy, cheating, criminal breach of trust, falsification of accounts and criminal misconduct involving all these accused. All these companies had invested in Jagan's firms by paying hefty premiums for shares, which has been cited by the petitioners and the FIR as one of the chosen ways of paying kickbacks in the present case.

The CBI has also mentioned two groups of firms -- 16 of them from Hyderabad and 22 from Kolkata, Mumbai and other locations outside AP —that had invested Rs 107 crore and Rs 195.70 crore respectively. The first group has no significant income or assets comparable to its investments into Jagan's companies while the second comprises professional money laundering and source arranging companies, raising a strong suspicion about the source of funds, according to the FIR.

Illegal wealth
Coming to Jagan's companies, the FIR quoting the petitioners alleged that Sandur Power that runs a 22.5 Mw hydel power plant in Karnataka has been used by him to pump in his corrupt money. “While its total worth could not have been more than Rs 150 crore, its shares were sold to various companies and persons at huge premiums with the objective of receiving bribes and routing the illegal wealth,” it said.

Nimmagadda Prasad, whose company is involved with Vanpic, a huge port-cum-industrial corridor project, alone paid Rs 140 crore to Sandur Power by purchasing shares at a premium of Rs 650 per share. A total of Rs 797 crore was allegedly raised by Jagan in Sandur Power, some of which came from a couple of Mauritius companies currently non-existent, according to the FIR.

Apart from this, Prasad, Sridhar, Penna group and India Cements among others have made investments in Carmel Asia Holdings Private Limited, a holding company of Sandur Power, by subscribing to the shares at a huge premium.

Prasad also invested Rs 244 crore through various companies in Bharathi Cement promoted by Jagan along with Dalmia Cement and India Cements among others. Firms and individuals that put Rs 844.13 crore in Jagathi Publications include Hetero Group, India Cements, Potluri Varaprasad of PVC Ventures, Nimmagadda Prasad, Penna Cements, Lanco and Sajjala group, which acquired equity by paying huge premium, according to the CBI

The investigative agency has so far collected close to 100,000 documents in this case and reportedly submitted a report on the progress of the ongoing inquiry to the special CBI court. It has started serving notices to individuals and companies for further questioning following the completion of initial searches.