Sunday, February 22, 2009

COVERING UP THE MOTHER OF ALL CORRUPTION SCANDALS

Despite best efforts of Andhra Pradesh Chief Minister YSR Reddy, the contours of the the mother of all political corruption and misuse-of-office scandals are beginning to clearly emerge from the seemingly impenetrable fog that he has created all around it. If former Andhra Chief Minister Chandrababu Naidu is to be believed, the personal worth of CM Samuel Reddy has jumped to a whopping Rs 100,000 crores ($20 billion) since he became the CM, due to his wrongdoing.

The whole world believes by now that Ramalinga Raju, the disgraced promoter-turned-looter of IT firm Satyam, made his billions in unholy partnership with YSR Reddy and Son. But what is becoming increasingly evident is the that the corruption racket that the father-son duo have been running blatantly is not limited to Satyam alone. There are manifestly many other respectable firms who allowed themselves to be willingly exploited in varying degrees by the all-powerful CM who was, and still is, invincible, thanks to, as someone described it recently, his privileged knock-and-walk-in access to the most powerful address in Delhi.

The facts emerging are startling, to say the least.

Ramalinga Raju's other firm, Maytas Infra, the one he apparently siphoned money to from Satyam, catapulted from a little know construction company to an infrastructural conglomerate within a couple of years. Its turnover rose eight times in just three years — from Rs 220 crore in 2005-06 to Rs 1,670 crore in 2007-08, and last year alone it won more than Rs 18,000 crore in contracts, including the Rs 12,000-crore Hyderabad Metro Rail project and a port project in Machilipatnam (Rs 1,600 crore). It may be recalled that E Sreedharan, the spotless father of the Delhi Metro, had in September last year said that "The BOT operator (Maytas) has a hidden agenda which appears to be to extend the Metro network to a large tract of his private land holdings so as to reap a windfall profit of four to five times the land price.

It has recently come to light that on the "specific instructions of the honourable CM", 50 acres of land having an auction value of Rs 4 crore to Rs 4.5 crore per acre, were allotted to Satyam at only Rs 10 lakh per acre, in Vishakhapatnam. According to Raju's own admission, Maytas Properties, owned by his family, has a land bank of 6,800 acres in Andhra Pradesh. Most of it is concentrated in the state capital and important urban centres such as Visakhpatnam. This included three Special Economic Zones for the IT industry in Hyderabad and a port the company was permitted to develop at Machilipatnam. It is widely believed that Reddy helped the company acquire this land too at rock bottom prices and then awarded projects to Maytas Infra in and around it so that Raju could sell it at many times the purchase price later and make a huge killing.

Reddy's son Jagmohan has become perhaps the fastest-growing entrepreneur in the country, may be even the world. As per CNN-IBN, Jagmohan bought a small company called Sandur Power Ltd and ever since his father became CM in 2004, hectic activity has been witnessed in this power generation firm. Jagmohan first raised almost 125 crore rupees by allegedly allotting shares at a premium of Rupees 61 to two Mauritian companies, viz. 2 I capital and Flurry. Thereafter he floated some subsidiary companies like Classic Reality, Caramel Asia, Bhavati Sanidhi Estates and Harish Infra. Each of these companies was, in turn, used to float separate firms including Jagan's pet Jagathi Publications and Indira Television. Almost 200 crores is believed to have been circulated between these companies, most of which was raised for different purposes.

In March 2008, Jagmohan launched a newspaper, Sakshi, with 23 editions simultaneously across Andhra Pradesh. Within two months of its launch, it became the largest circulated daily in the state with a 13 lakh circulation. In an interview in June 2008, Jagmohan himself had boasted that "Deloitte has valued Sakshi at Rs 3,500 crores and my investors include companies like Aurobindo Pharmaceuticals, India Cements, Matrix Labs and Lanco Group, to name a few". According to data available with the registar of companies, 23 firms have invested in Jagathi Publications (P) Ltd, the company which publishes Sakshi. As per Chandrababu Naidu, their investment was to the tune of Rs 365 crore.

The pay off? All companies that had invested in the Jagathi were reportedly given lucrative government projects to bag which they would have perhaps given even more cuts to CM Reddy. There is a lot of smoke about the ownership of some firms and the price at which they were given the shares. That is not all. The accounts of the firm were audited by the same audit firm, Pricewaterhouse Coopers, that had been auditing Satyam, after which the start-up paper was given government ads from which it earned huge sums of money. It is quite likely that unwritten orders/suggestions would have been given to all government offices and departments and even private companies to subscribe to Sakshi. There is no other way a brand new newspaper would have touched the highest circulation figure in its targeted area within two months of its launch anywhere in the world. Even Playboy could not have grown so explosively.

This is not all. Sunita, a blogger, has written about numerous other corruption cases through which CM Reddy has allegedly enriched himself enormously. Of course, these have not apparently been authenticated or properly investigated. They are, therefore, not being listed on this page and can be read on her blog. But, considering the blazing manner in which Samuel Reddy has manifestly gone about increasing his wealth exponentially through corrupt practices, even if half of what Sunita has alleged is true, the conscience of the whole nation will be shocked. In fact, it is entirely within the realm of possibility that Reddy's network of sleaze is far wider than what Sunita and others have uncovered till now.

Surprisingly, investigations into the Satyam scandal are being effectively scuttled. The case has finally been handed over to the CBI, which has filed an FIR. But, knowing what the the agency did with Bofors and Quattrochi, little is expected to come out of it. Ramalinga Raju had floated as many as 350 companies through which he siphoned billions of dollars. The investigation into these have been handed over to the Serious Fraud Investigation Office (SFIO) which is incapable of investigating so many companies in any reasonable time, making a mockery of the whole exercise.

Why is Ramalinga Raju being shielded? No one is in any doubt that he is being shielded because his links to Reddy cannot be concealed if there is an impartial inquiry. There is obviously a lot of truth in the murmurs that the Reddy and Raju families have made billions of dollars in the last few years through corrupt and fraudulent means. Why is there no investigation into the massive corruption and fraud that Samuel Reddy has committed as CM? Reddy is being protected because of his closeness to the Gandhi family and because, as R Jagannathan says in the DNA, "With him goes the Congress party's hope of returning to power as the head of the next coalition".

It is not that YSR Reddy discovered corruption, deceit and fraud only after he became CM. He perhaps was chosen to become CM because of such a past which, as Swaminathan S. Anklesariya Aiyar wrote in the Times of India in 2004 itself, helped him rise " on the basis of murder, loot and terror". His "hair-raising history" of rise through terror goes back to his father and is filled with one scandal after another. Surely, all this and more would have been known to the Congress High Command when Sonia Gandhi chose to appoint him CM.

Why, then, did Sonia turn a blind eye to such a damning, criminal past when she decided to give him the top job in such a big state? Why is she continuing to protect him and project him as the hope of the Congress party in the coming elections? Why is there such a massive cover up under way when few are in doubt that this is by far the largest ever corruption scandal involving the Chief Minister of a state, indeed any politician? It is not believable that Reddy is continuing to enjoy the blessing of 10 Janpath only because of his religious background, as some are saying. There has to be a lot more there. And that raises very, very disturbing questions about where some of our top leaders are taking the country.

Worse than the cover up operation that the Congress party has launched is the one launched by the media. Where is Tehelka now? Why are all the so-called guardians of probity in politics silent now even in the face of this massive storm of corruption and fraud and possibly worse? Is this latest combined fraud to cover the Reddy fraud going to do this country proud? Is this what the young politicians of India have in store for the country when their time comes? Is there going to be re-run of the goonda raj that a young Sanjay Gandhi introduced in this country during the Emergency?

Will somebody speak up? Or is this sordid game, this blot on the nation, going to continue unchecked?
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Readers may also read:
1. Modi and Reddy: The choice is clear
2. Maytas: Truth inverted; greed is king
3. Capital punishment, not gain, for the corrupt
4. Corrupt colonial India faces volcano
5. 1000 times President's salary for India's babus!