Jagan Illegal Assets

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COVER STORY: JAGANMOHAN REDDY
Playing For High Stakes
YS Jaganmohan Reddys inherited goodwill and uncanny business sense have catapulted him to a
politically invincible position
N MAHALAKSHMI , KRISHNA GOPALAN
The quiet hum of conversation falters briefly as two mobile phones ring simultaneously. The
man holding them peers intently at the screens and passes them to another assistant
standing nearby Anna will call back when he is free even as the discussion begins
anew. This isnt a boardroom its an all-too common scene at Chanchalguda Jail in
Hyderabad, where YS Jaganmohan Reddy has been lodged since his arrest in a
disproportionate assets case. Come November 27, it will be six months since Jagans
incarceration, but life seems to be going on with minimal disruption. It does not matter where I
am, work never stops be it business or politics, Jagan said to a family friend who visited him
a month ago. Certainly, hes been meeting some 100-odd people daily on average, including
YSR Congress party workers, friends and family never mind prison regulations on visitors.
And when hes not sorting out matters of party or business, Jagan spends his time reading,
practising yoga and playing badminton every evening. He is up to date on the national political
scene from Bihar to Jammu and Kashmir and is gearing up for the 2014 elections, says
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3/5/2014 business.outlookindia.com | Playing For High Stakes

The CBI findings
capture only the
deals that left an
audit trail; the
bigger chunk of the
money was made
in cash" Jayaprakash
Narayan, Founder, Lok
Satta

the friend. Thats true. Already his sister Sharmila is pulling in the crowds and preparing the
ground with her 3,000 km padayatra across the state.
The Yuvarajas palace: Jagans plush bunglow at Yelahanka, near the new airport in Bengaluru, is spread across 23
acres. (Photograph by Nilotpal Baruah)
And why not? The 39-year-old novice politicians thumping victory in the Andhra Pradesh
Assembly by-elections in June where YSR Congress swept 14 out of the 17 seats,
demolishing both Congress and the Telugu Desam Party (TDP) could have only
strengthened Jagans confidence and resolve. Especially given that this was an election he
won sitting in jail.
But this is not a story on Jagans spectacular victory, nor is it
about political shenanigans. This is about how Jaganmohan
Reddy came out of nowhere, amassed a fortune by getting the
best out of available resources.
The chief accusation against the Andhra Yuvaraja is that he
struck quid pro quo deals when his father YS Rajasekhara Reddy
was chief minister that resulted in disproportionate assets
Jagan had declared assets of Rs 365 crore while contesting the
by-elections for the Kadapa Lok Sabha seat in 2011. But ask
anyone in business or political circles in Hyderabad, and they will
tell you that the findings of the Central Bureau of Investigation
(CBI), which largely bring out these quid pro quo deals, barely
scratch the surface. These [findings] capture only the deals that
left an audit trail; the bigger chunk of the money, it seems, was
made in cash, says Jayaprakash Narayan, a former IAS officer
who started an anti-corruption political party Lok Satta. But really,
its not how much money was made although thats a jaw-
dropping sum in itself but how it was made that makes the story
interesting.
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How It All Began
In February 2009, when YSR was in power, the TDP-led Opposition in Andhra Pradesh
brought out a 331-page book titled Raja of Corruption, exposing blatant violation of several
laws by YSR. It made no difference, says Nama Nageswar Rao, TDP member of parliament
from Khammam.
Those were happier days for the first family of AP, and YSR was in favour with the Congress
high command. He had come a long way in a few short years. A politician of relatively modest
means, YSR had put his Banjara Hills house on the block ahead of the state elections in 2003,
and sold off a chunk of land; a few years earlier, the insecure father had approached friends to
get his only son a job that would fetch him a decent monthly salary. Now, less than a decade
later, that same son is worth several thousand crore. His house at Yelahanka near the new
airport in Bengaluru is spread across 23 acres of land. When I visited him at his house, he
would be on this enormous white sofa, dressed well and wearing a Patek Philippe limited
edition watch, says a banker, who has dealt with him on a number of occasions.
Back in the 1990s, though, nobody would have guessed Jagan would do so well for himself.
After finishing his schooling from Hyderabad Public School, Begumpet, in 1991, and Bachelor
of Commerce from Osmania University in 1994, Jagan was sent abroad to study. But he
returned almost immediately and moved to Bangalore to try his hand at real estate. By all
accounts, he wasnt too successful and soon moved to his next venture: mini hydel projects. He
raised Rs 2 crore from close friends and relatives to set up two plants, a 1 MW project in
Warangal and a 25 MW project in Mangalore. Money was tight, though: after Jagans wedding
in 1998, it was wife Bharathis family that was supporting the couple financially.
For the next four years, Jagan apprenticed with Lagadapati
Rajagopal, YSRs friend and also a Congress party leader,
learning the nuances of the infrastructure business from doing
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He had an open-
door policy any
big deal with a
large payoff was
sure to be worked
out" Lagadapati
Raj agopal , Congress
MP

The one-step-at-a-
time approach will
not work you will
be dead, Jagan
said, when we
were launching"
Ramakri shna Reddy,
Di rector, Sakshi

learning the nuances of the infrastructure business from doing
project appraisals right down to managing execution at
Rajagopals company, Lanco. Jagan had both the aptitude and
the appetite he was smitten by the concept of the big project,
recalls Rajagopal, who is a two-time member of parliament (MP)
from the Vijayawada constituency. As the 2004 Assembly
elections approached, it became evident that the TDP would be
voted out and that the stars were turning favourable for YSR and
his family. People began taking him very seriously. As easily as
that, money or the lack of it stopped being an issue.
Surprisingly, YSR was not keen on Jagan joining politics. YSR
knew his son was ambitious and aggressive. As a good father, he
wanted to keep him away from controversy, says veteran Andhra
politician MV Mysoora Reddy, who recently left TDP to join Jagan.
It didnt really matter, though. Jagan himself was not in the least
interested in politics for him, politics was only a means to further business interests, says a
business associate who has worked with him closely.
And business interests were becoming evident. The boom in mineral and land prices two
resources over which the government had complete control was just beginning when YSR
was made chief minister, and Jagan understood the value of both. With 48 minerals, from iron
ore and bauxite to granite, limestone and beach sand, Andhra Pradesh accounts for over 10%
of Indias mineral production, and land became much sought-after especially as rising real
estate prices coincided with the governments grand plans to set up SEZs. Both these
developments meant the state machinery could be exploited to cut deals in favour of
interested parties.
Underground Operation
YSRs determination to keep his son away from politics extended to barring him from even
entering the secretariat in Hyderabad. But that didnt stop Jagan from getting off to a rocking
start in Bangalore from 2003 onwards. At the heart of his empire-building were his close ties
with a partner who ruled a country of his own making, the kingdom of Bellary.
In that country, miners would barter a third of their output to conduct hassle-free business in
the state. Some 120-odd companies were mining 300,000 tonnes of iron ore each day across
Andhra Pradesh and adjacent Karnataka barring a handful of companies, all the miners has
acceded to pay protection money, says Lok Sattas Narayan. Given that many, if not most,
mine-owners had been given mines gratis or through some push-and-pull in the past,
negotiating a fixed output in exchange for no harassment wasnt a bad idea at all. And given
that iron ore prices were soaring, there was more than enough money to go around. It costs
not more than Rs 300 to produce a tonne of iron ore and at the peak, the selling price was
more than 10 times that price, so the arithmetic of mining deals was mind-boggling. Assuming a
selling price of Rs 3,000 per tonne, a third of the daily output (that is, 100,000 tonnes) would
fetch Rs 30 crore. That translates to nearly Rs 11,000 crore per annum, and roughly Rs
55,000 crore for five years.
The self-styled Raja of Bellary was Gali Janardhan Reddy, and
Jagan and Gali initially came together because of the Reddy-
community connection. Until the BJP came to power in Karnataka
in 2008, Gali was a nobody in the state. But he had quickly
realised the advantage of leaning on his powerful friends in the
community. Galis real riches and those of Jagan were the
result of illegal mining through a company that is named after a
small village in Anantapur district, 315 km from Hyderabad. The
YSR administration bent over backwards to accommodate Galis
Obulapuram Mining Corporation (OMC), from helping in extending
the lease and doctoring the lease renewal dates and resisting
fresh survey of mines that would have stopped illegal mining, to
withholding allotments in adjoining lands so illegal mining could
continue and giving land liberally at throwaway prices. OMCs
turnover in FY04 was Rs 35 crore, with a nominal profit of Rs 1.05
crore; by FY09, it had crossed Rs 3,000 crore with a net profit of
Rs 700 crore. Much of the money was made flaunting rules or
exploiting loopholes using various state-owned institutions. A prime vehicle was Andhra
Pradesh Mineral Development Corporation, whose then-chairman VD Rajagopal is now behind
bars for being an abettor (see story on page 87).
In exchange for these favours, Jagan received 50% of the booty. Not directly, of course. OMC
agreed to sell 50% of its output at operational cost and nominal 5% profit to a company called
Red Gold Enterprises whose CEO was also the CEO of Sajjala Iron & Steel, Bellary. That
company is owned by Sajjala Diwakar Reddy, whose brother Sajjala Ramakrishna Reddy
heads Jagans media business and is a close friend. Ramakrishna was also a key face for the
YSR Congress Party during the recent elections.

Many players were
keen on setting up
cement capacities
in AP; instead of
taking a cut and
making quick
money, Jagan
decided to set up
his own cement
plant

Shooting stars: The alliance with Gali Janardhan Reddy helped Jagan capitalise quickly on the boom in commodity prices.
(Photograph by AP)
Empire Building
Mining became the fodder for most other businesses Jagan would enter into. Much of the
mining output was under-invoiced and exported to China through benami front companies, and
the illegal income parked in tax havens to be repatriated as investments through shell
companies. For instance, in Sandur Power, one of Jagans first business ventures, he allegedly
routed money through two foreign companies that are said to be his own (See: Jaganmohan
Reddys business empire). The CBI charge against Jagan is that not only did he move money
out of the country through hawala and then bring it back to plough into his businesses, but
also that he whitewashed his money through corporates that allegedly benefited from the
YSR administration.
Aiding him in all this was a coterie of friends and associates. But
those close to Jagan say that all decisions are ultimately his
alone. And it was he who decided the modus operandi and the
terms of all deals. His inner circle includes two brothers involved in
diamond trading in India and the Far East. The brothers, one of
whom is based in Mumbai, are well-known in political circles for
their clean way of doing a dirty business the business of
hawala transactions and changing the colour of money. Before
the state elections in 2004, sources say, the brothers gave Jagan
an unsecured loan of Rs 2 crore and soon after, made a Rs 4-
crore preferential capital investment in Sandur Power.
Later, a Rs 125-crore investment from 2i Capital and Pluri
Emerging Company into Sandur Power was structured through
Asia Infrastructure, a protected cell company (PCC). PCC companies are routinely used to
route hawala money as investments. CBI enquiries reveal that Asia Infrastructure, in turn, got
money from Whitehall Associates and Wellmade Incorporated and one of the brothers is the
director of Whitehall. Incidentally, when Asia Infrastructure was started it had a capital of Rs 1
crore; five years later when it shut down (conveniently after Jagan bought back shares from 2i
and Pluri), the capital had risen to Rs 1,100 crore. The local press in Andhra Pradesh says the
deal is still being investigated by the CBI.
The mastermind of this labyrinthine deal and, indeed, all others was Jagan himself. The deal
with the Gali brothers set the stage for an open-door policy any big deal with a large payoff
was sure to be worked out, says Rajagopal.
Despite his political background, Jagan wasnt well-connected most deals happened at the
instance of businessmen. Take, for instance, the Vadrevu and Nizampatnam Port Industrial
Corridor (Vanpic). It was industrialist Nimmagadda Prasad the biggest investor in Jagans
businesses, deploying over Rs 500 crore across media, cement and power who came up
with the proposal for an integrated port-based industrial area. Prasad negotiated with Ras Al
Khaimah, one of the seven emirates that constitutes the UAE, to come in as partner, which
would enable the AP government to approve the contract without competitive bidding. The


Jagan was a
master strategist.
With the Gali
alliance, he ensured
that be it Congress
or BJP at the
Centre, he would be
insulated" Nama
Nageswar Rao, TDP
MP

would enable the AP government to approve the contract without competitive bidding. The
level of corruption was huge: the project was originally allotted 400 acres of land for the two
ports, but ultimately 13,000 acres was acquired from farmers in cash. More importantly, says
TDPs Revanth Reddy, MLA from Kodangal constituency in Mahbubnagar district, while the
government bought the land at Rs 70,000 per acre, it was sold to Vanpic at Rs 3-4 lakh per
acre and Vanpic started re-selling the land at Rs 7-12 lakh an acre. Moreover, Prasad
eventually sold off a substantial part of his stake in Vanpic to infrastructure company
Navayuga, while the emirate also sold 25% of its holding, so Navayuga ended up with a 60%
stake in the project without competitive bidding.
An Opportunistic Businessman
Take a good look at Jagans decisions and its obvious that he has a natural instinct for
business, knowing just when to cut and run and when to settle in for the long haul. His choice
of key businesses cement and media then, not only display his opportunistic streak but
also his prowess as a strategist.
A banker of a state-owned bank tells this tale. His bank had lent to a couple of jewellers in
Hyderabad, who started defaulting. Their properties were attached but there was no hope of
any recovery because the jewellers had underworld ties and would not concede. Jagan
bought out the banks outstanding loan of Rs 45 crore, confidently, says the banker. With
those assets, he must have made a killing.
And then, consider cement. Andhra Pradesh has Indias largest
limestone reserves. Owning limestone reserves is not only a key
source of competitive advantage, it also creates an entry barrier
for new companies in the business. Obviously, many players,
including multinationals, were keen on setting up capacities in AP;
instead, Jagan, too, decided to set up his own cement plant. Any
politician would have just said yes to each of the businessmen
and quickly made his cut. This is where the businessman in Jagan
came to the fore, says Rajagopal. In 2007, Jagan acquired
Raghuram Cements, renamed it Bharathi Cement and quickly
ramped up capacity to 5 million tonnes with an outlay of Rs 1,700
crore at its plant in Kadapa. He roped in Prasad, Dalmia Cement
and India Cement as investors and in April 2010, sold 51% in the
company to Frances Vicat for Rs 2,500 crore, offering a profitable
exit to the investors. The three investors, who put in
approximately Rs 440 crore between 2007 and 2009, must have
tripled their money, at least, on exit in 2010.
In FY12, Bharathi clocked revenues of Rs 1,200 crore and is a
debt-free company with presence in six states: Maharashtra accounts for 60% of sales while
25% comes from Andhra Pradesh. Not surprisingly, once Bharathi Cement was established,
very few limestone quarrying leases were given in the Kadapa region.
Media The Business Of Politics
Turn on Sakshi TV and youll see flowers being conferred every second on an image of a
smiling man on the right corner of the screen. Hes no god or even godman YSRs place of
pride on the channel is a telling sign of the political underpinnings of a channel that claims to
be a purely party-neutral, for-profit business.
The man who would oversee Jagans media business, then, had to be a trusted lieutenant from
the existing set-up. Enter Sajjala Ramakrishna Reddy, an old media hand who had previously
worked with Eenadu, Andhra Bhoomi and Udayam before settling into the family business. The
diverse experience across regional publications would have made Ramakrishna the ideal
candidate to launch Jagans media business, but he would have still fallen short without his
Kadapa link. Ramakrishna prefers to downplay the link. I knew YSR from Pulivendula as we
belonged to the same region, he says mildly.
Cracking the media business in AP was no mean task. Ramoji Raos Eenadu, which has been
around since 1974, had a near monopoly with circulation of 1.05 million; its closest rival,
Vaartha, had a circulation of approximately 650,000.
Dislodging Eenadu from the top was near impossible, but it had to be done. Rao was close to
TDP supremo N Chandrababu Naidu both belonged to the Kamma community, which
begrudges Reddys and Eenadu was increasingly becoming a TDP mouthpiece.
Ramakrishna then had a seemingly simple diktat from Jagan when setting up Jagathi
Publications in 2007, the year before the paper was launched: Have all the qualities of
Eenadu and then some more.
Jagan went straight for the jugular when he launched Telugu newspaper Sakshi, unveiling 23
editions on the same day across the state no media company has had a more aggressive
launch ever. In 2008, Eenadu was selling 1.05 million copies daily; Sakshi debuted in March
with a print run of 1.2 million out of 19 printing presses. The one-step-at-a-time approach will
not work you will be dead, Ramakrishna recalls Jagan saying. Unlike Eenadu, Sakshi
printed all pages in colour, hired the best machines and brought in Mario Garcia as designer.
Ramakrishna recounts an incident that brings out Jagans thinking. When the designer
suggested a yellow masthead, many people had reservations since that is the colour of the
TDP. Jagan, on the other hand, gave the shade the go-ahead: We cant let go of something
good just because someone else used it first, was his reasoning.
Now, his newspaper owns that yellow. At present, Sakshi has a circulation of around 1.45
million, with a readership of 14.7 million, and ranks as the eighth-largest publication in India.
million, with a readership of 14.7 million, and ranks as the eighth-largest publication in India.
Rival Eenadu sells 1.6 million copies a day. Ramakrishna says apart from 13,000 agents, the
company has 8,000 employees, with 1,500 in marketing alone. Sakshi has 180 offices across
the state and the head office alone employs about 600 people. But that isnt the only reason
for its success. Jagan created a stranglehold on distribution, giving sales targets to partymen
and political allies in every constituency. Andhra has 294 constituencies and Sakshi carries
four pages every day on each constituency. Using the army of party workers earlier
Congress, now YSR Congress ensures a deep distribution thats achieved with little
manpower costs in the P&L. Jagan wanted to get the circulation numbers on Day 1 and
everyone, including the MLAs, MPs, Congress mandals and local panchayats, were roped to
achieve that objective, points out TDPs Revanth Reddy. Its a strategy that worked because
the MLA would either have to sell or bridge the gap by buying copies themselves.
Sakshi has been doing pretty well in terms of advertising, too again, thanks to help from the
party in power. Of the Rs 600 crore advertising in Telugu print, Sakshi rakes in Rs 240 crore,
while Eenadu gets Rs 350 crore. But there are allegations that Sakshis share includes about
Rs 150 crore from government advertising, which helped it clock revenues of Rs 365 crore in
FY11. In FY12, after the government ads stopped, our revenues are only a tad lower than the
previous years, says Ramakrishna, without revealing the exact figures. Sakshi TV, on the
other hand, isnt doing as well. Launched in March 2009, the news channel has become No.2
in the state (outside Hyderabad), next to TV9. But then, its a cut-throat market with 23
channels, the largest number of news channels in India is in Telugu.
Two steps ahead
The common thread across Jagans main businesses, including Sandur, Jagathi Publications
and Bharathi Cement, was that he would sell stake to investors in these company at
abnormally high valuations well before they had engaged in any tangible business. Apart from
capitalising his main companies before they earned the required credentials, many local
networks were also exploited in the whitewashing exercise in order to protect the identity of
investors. The CBI has recorded that two tax consultants in Kolkata, Navneeth Kumar
Singhania and Ratan Babulal, were apparently asked by an industrialist in Andhra Pradesh to
route money into Jagans companies. Accordingly, two companies Sukuma Kamodian and
Shongliar were born in Singhanias office with his employees listed as directors; they
invested Rs 60 crore into Jagathi Publications making 25 cheque payments in all.
And really, thats been Jagans failing. Unlike politicians who prefer keeping their money safe
and anonymous in Swiss bank accounts, Jagan wanted to legitimise his wealth. And as he
brazenly grew in affluence and influence the bigger corporates in the state increasingly
started looking outwards, perhaps preferring not to play by his rules. Rues Suresh Chukkapalli,
chairman of the Hyderabad-based Rs 800-crore infrastructure developer Phoenix Group,
Business has been badly affected in the last seven years or so; there have been no
significant investments or industrialisation.
Tellingly, the biggest companies out of AP, namely GMR, GVK and Lanco, are not embroiled in
any of the Jagan-related controversies. Not so large companies such as Aurobindo Pharma,
Hetero Drugs and Ramky Infrastructure, which are alleged to have benefited from cheap land
in lieu of investments in Jagans media company, although they deny any reciprocal benefits.
Listed company Indiabulls Real Estate, too, has invested Rs 78 crore in Jagathi Publications,
although its not been named in any of the CBI investigations. Just for the various SEZ
projects, some 200,000 acres were allotted. Jagan himself is believed to own a lot of land that
is still benami, says Nageswar Rao of TDP.
The investigating agencys charges notwithstanding, not all charges of quid pro quo may be
legitimate. If you get an investment proposal from the chief ministers son soliciting a few
crores, what choice does any businessman have? asks a promoter who invested in Jagans
company, explaining why companies may have invested in Jagans businesses without getting
anything in return. Of course, it is not only about the implicit obligation towards the powers-
that-be. The AP culture is give bribes upfront and hope something will happen, says
Rajagopal ruefully.

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The Alliances
In June 2010, TDPs Rao raised a stink in the Parliament on the contentious issue of 146,000
acres allotted to Rakshana Steel in Bayyaram area (a mandal in Khammam district where Rao
is the MP) as part of its mining lease. But the point was never taken up for discussion. I was a
part of the Business Advisory Committee and it took them as much as nine months to bring up
the issue. The BJP was reluctant since the Reddy brothers were involved and Congress did
not want to antagonise Jagan, says Rao. Finally, on August 17, 2010, the issue came up for
discussion. Both the mining lease and the land allotted to Jagans brother-in-law, Anil Kumar,
were cancelled. As was the 14,000 acres of land allotted to Brahmani Steel, promoted by Gali
Janardhan Reddy, for a steel plant in Kadapa. The alliance between the Gali brothers and
Jagan Reddy was a strategic partnership to protect their political interests. Whether you have
Congress or BJP at the Centre, you would be insulated. Jagan was a master strategist, says
Nageswar Rao.
Things didnt turn out that way. In 2009, YSR died in a helicopter crash and the Congress did
not want the fathers establishment to continue with the son, says Mysoora Reddy. But for
someone whose interest in politics was, till then, limited to the commercial interests it promoted
and protected, Jagan turned out to be as savvy in politics as he was in business. He set off on
the Odarpu Yatra, which was the beginning of his fall from favour of the Congress high
command this was ironically, what would catapult him to pole position in the state election.
For someone who has never campaigned for elections, he was remarkably good going from
one village to another and connecting with people, says Mysoora Reddy. He had another ace
up his sleeve his Christian brother-in-law. In a state where community is of supreme
importance in all aspects of life personal, political and business Jagan could garner
widespread support. The Reddys think Jagan is with them, and so do the Christians, laughs
Phenonix Groups Chukkapalli.
A few months after YSRs unexpected death, a Canadian film-maker named Satya made a
short documentary film on Jagan. The film projected him as Junior YSR. Then 36, with very
little experience in politics, the easiest and best thing for the young political aspirant
would have been to use the larger-than-life image of his father for instant political mileage.
Surprisingly, Jagan was not pleased with the idea. I am Jagan, and would like to be called
Jagan, he prevailed. Hes certainly carved out an unmistakable identity for himself, in politics
and in business.
By N Mahalakshmi and Krishna Gopalan
Also In This Story
COVER STORY: JAGANMOHAN REDDY
Exercising The First Right
How the YSR administration used state-owned institutions to cut private deals
SOUMIK DUTTA
Filed In:
Authors: N Mahalakshmi | Krishna Gopalan
People: Y.S. Rajasekhara Reddy | Y.S. Jagan Mohan Reddy
Tags: Corruption | Assets | CBI
Section: Feature
Subsection: Cover Stories
Places: Andhra Pradesh
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Anil Kumar Sr. Software Engineer at ITtools
DR Somayajuu garu, if you loyal to jagan perform pooja daily to his photo. what OUTLOOK
published was less about him, They did not touch his criminal mentatlity.
Reply Like September 8, 2013 at 9:46am 3
Sarath Sandy Houston, Texas
then u better do babu gari puja ....
Reply Like November 29, 2013 at 4:18am
Rajesh Chekuri Kandukuru, Andhra Pradesh, India
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1
DEC 22, 2012
Response To Cover Story Doing Business The Jagan Way
Going by the article, I believe you have fallen for the systematic vilification campaign
launched by the Telugu Desam Party (TDP) with a sinister design to tarnish the
image of the late YS Rajasekhara Reddy, YS Jaganmohan Reddy and the YSR
Congress Party. When Jagan walked out of the Congress, that party, too, started a
witch-hunt against him.
Jagan has been an entrepreneur 1994
onwards. He promoted a Rs 170-crore 40
MW hydro power project in Karnataka
much before his father became CM of
Andhra Pradesh; he promoted two more
small hydro power projects at the same
time and continued his pursuit even after
his father became CM. Post 2004, the
Indian economy boomed like never
before. Not just Jagan but thousands of
entrepreneurs, who were not related to
any politician, let alone to a CM, grabbed
these opportunities and grew very
substantially.
I am shocked that, of all people,
Lagadapati Rajagopal and Nama
Nageswara Rao, whose rags-to-riches
story in the shortest possible time should
eminently qualify as a case study in the
best business schools in the world, say
that Jagan had to use his fathers position to grow as an entrepreneur. If you think
Jagans rise as a businessman is phenomenal, what of Rajagopal, who became
Indias largest private power developer with assets in his companies worth more
than 20 times that of Jagan?
The Raja of Corruption was published by TDP before the 2009 general elections
and is nothing but a scandalous pamphlet designed to tarnish the image of the late
YSR. Through it, the TDP alleged that YSRs family illegally accumulated Rs 1 lakh
crore. The UPA government consigned it to the dustbin in 2009 but the situation
changed with the untimely death of YSR in September 2009 and Jagans decision
to leave the Congress Party. That he was walking away with virtually the entire vote
bank of not only the Congress but also of the TDP was not something the
Congress High Command and Chandrababu Naidu could digest. They came
together in filing the PIL against Jagan. The high court ordered a CBI probe but,
because it is not a court-monitored case, it became a PMO-monitored CBI case
with all the attendant vagaries. The entire investigation by CBI is premeditated to
implicate him in one case or the other it exemplifies how the Congress High
Command has been using every institution to stifle political dissent.
Regarding the allegation of quid pro quo in investments relating to Jagans two
companies, Bharati Cement and Jagati Publications, many persons who were the
beneficiaries of government largesse also invested in the shares of these
companies at the same premium as others against whom there are complaints of
quid pro quo. In any case, the shares continue to be in the names of the investors.
There is no complaint that these investments are benami for Jagan. There are no
complaints that he has either siphoned or misappropriated the premium amount in
the companies. Moreover, these are not sham companies. Bharati Cement
produces high quality cement and Jagati publishes Sakshi, which is the second-
largest circulated Telugu daily, besides running a very popular news channel.
To say the premium collected by Jagati is exorbitant, the nearest comparison has
to necessarily be with Eenadu. The owners of Ushodaya, the company publishing
Eenadu, sold 26% shares to JM Financials at over 200% more than what Jagati
charged, even in the face of Rs 1,800 crore of accumulated losses for the group.
Given this, how can anybody conclude that quid pro quo was involved when Jagati
sold some shares at a premium?
The limited issue is, what has the CBI unearthed so far other than what Jagan
himself has disclosed to the Lok Sabha Secretariat, IT, ROC and in the affidavits
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Rajesh Chekuri Kandukuru, Andhra Pradesh, India
Even though people vote for him ..........This is BHARATH
Reply Like September 11, 2013 at 6:07am 2

filed with Election Commission of India in 2009? In fact, The Raja of Corruption is
in a way a reproduction of what Jagan himself has disclosed to the world; there is
certainly nothing new. Where is that Rs 1 lakh crore; where is the recently revised
Rs 43,000 crore? Who will take responsibility for these figures?
DA Somayajulu, Member, Political Affairs Committee And Central Governing
Committee, YSR Congress Party
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