Court notice spells fresh trouble for Jagan, his firms

HYDERABAD - The notices issued by Andhra Pradesh High Court to former Congress MP Y.S. Jaganmohan Reddy and dozens of companies which invested in his businesses may well be the beginning of troubles for the son of late chief minister Y.S. Rajasekhara Reddy.

It was the main opposition Telugu Desam Party (TDP), which had long been trying to expose the young businessman-politician for his ill-gotten wealth during the reign of his father, but now the ruling Congress party, which was once defending him, is out to target him on the same issue.

With Jagan recently resigning from the Congress party, deciding to float a new outfit and openly challenging the government with the support of over two dozen legislators, political observers say Congress now appears to have decided to hit back.

Shankar Rao, a minister, took cudgels on behalf of the ruling party by writing a letter to the high court seeking a probe by the Central Bureau of Investigation (CBI) into the ill-gotten wealth of Jagan.

Accusing Jagan of amassing public money during his father’s reign and committing several violations of laws of the land, Shankar Rao said the former MP indulged in money laundering by floating fictitious firms and routing the black money through some companies in Mauritius.

Rao, a bitter critic of the late YSR and his son, pointed out in his letter that Jagan’s assets, which were only Rs.11 lakh in March 2004, had now gone up to Rs.43,000 crore. YSR, who became chief minister in 2004, died in a helicopter crash Sep 2, 2009, a few months after he assumed office for the second term.

Treating Rao’s letter as a writ petition, a division bench of the high court Monday issued notices to Jagan, his newspaper Sakshi, Indira Television, his companies Carmel Asia Holdings Limited, Sandur Power and to 43 entities and individuals who invested in Jagan’s companies. Notices were also issued to the CBI and six government departments.

The court gave three weeks’ time to the respondents and posted the next hearing to Feb 14.

The court also took up hearing on the first letter written by Rao against Jagan on the alleged irregularities in Emaar-APIIC deal. The minister alleged that Jagan, by misusing his power as the son of the then chief minister, made money in this deal, sent the same to Mauritius and re-routed it to his companies in the form of investment.

The minister alleged that the share of APIIC (Andhra Pradesh Industrial Infrastructure Corporation) was brought down in the township and golf course joint venture with Emaar in Hyderabad, causing huge losses to the state exchequer.

Rao alleged that Jagan made money through allotment of mines, lands and licences during his father’s rule and even used hawala and money laundering routes.

TDP chief N. Chandrababu Naidu had been raising this issue both in the state assembly and outside when YSR was alive. He had alleged that several laws were violated in the investment made in Jagan’s Jagati Publications, which brings out Telugu daily Sakshi, and Indira Television, which runs Sakshi Telugu news channel.

YSR and his Congress party had denied the allegations and strongly defended Jagan. But with political equations changing in the state following the death of YSR, the ruling party is digging into the past to take on Jagan.

The Jagan camp reacted sharply to the development and alleged that the Congress had now joined hands with the TDP to target him. Sakshi even claimed that the central leadership of the Congress party was involved in the conspiracy.

The letter written by Shankar Rao smacks of political vendetta, said Jagan loyalist Ambati Rambabu. Unable to fight the political battle against Jagan, Rao “has made baseless allegations to tarnish the image of our leader”, he said.