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Congress ready to punish Jagan Mohan Reddy with tax raids

S RAMA KRISHNA  Hyderabad | 12th Dec 2010

he Congress is determined to punish the man who has wrecked the ruling party in Andhra Pradesh, former Chief Minister Y.S. Rajashekhar Reddy's son Y.S. Jagan Mohan Reddy, with a series of punitive Income Tax department and Enforcement Directorate raids. These Central agencies are busy seeking details from the firms that have invested in Jagan's companies.

Sources in government say that the Congress high command, which has "initiated the process of cleansing corruption elements" would go after Jagan once the winter session of Parliament gets over. The oft-aborted session will formally end this week.

There has been a flurry of activity in the ruling Congress camp ever since Jagan has announced that he will float a new political party by the first week of February 2011.

IT and ED officials in Hyderabad refused to comment, but sources said that as many as nine companies that had funded three of Jagan's firms —Jagathi Publications, which runs the Saakshi media group, Sandoor Power and Bharati Cements — are under their scanner.

The ED has sought information on the role played by two Mauritius based companies, 2iCapital and Flurry Emerging Company, in diverting funds into Jagathi through Sandoor Power. Sources said that the ED had acquired some details on this from SEBI too. Dossiers are being prepared against Prasad Nimmagadda, the founder of Gilchrist Investments of Matrix Laboratories India, as he invested in Jagathi. "We have nothing to hide and we have given all the details sought by the officials," said a Gilchrist director on the condition of anonymity.

Carmel Asia Holdings, a subsidiary of Sandoor Power is accused of being a conduit to divert Rs 82 cr into Jagathi. Ind Bharat Infra, Ind Bharat Power, Ind Bharat Energy, Eres Projects of Ramky Group and two pharmaceutical firms — Hetero Drugs and Aurobindo Pharmaceuticals — are under investigation for providing funds to Jagan's business empire.

"Both IT and ED have gathered enough evidence to nail some firms that put money in Jagan's ventures. Action will follow," a senior minister said. Congress leader P. Govardhan Reddy predicted that "Jagan will be arrested soon". "The Centre will not let Jagan get away with this plunder of public money," Reddy told The Sunday Guardian.

Health Minister D.L. Ravindra Reddy, who dug up the Emaar Properties scam said that several fictitious firms owned by Jagan were allotted prime plots in the Emaar Hill County Township at throwaway prices. "Several of the firms registered overnight with addresses from all over the country should be investigated by the CBI," he told this newspaper. Congress MLA Konda Surekha said that Jagan was being targeted. "They seem to be conspiring against Jagan by implicating him in false cases," she told this newspaper. Surekha on Friday accused Rajya Sabha member K.V.P. Ramachandra Rao of "being a broker" in all major corruption deals. Rao was YSR's close aide. "The Congress is using KVP to finish Jagan's political life. YSR must be turning in his grave to have a friend like this," she said in an open letter addressed to KVP.

 
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