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Rising stars sink in AP

Source : BUSINESS_STANDARD
Last Updated: Sun, May 20, 2012 19:40 hrs

What is common in Satyam Computer founder B Ramalinga Raju, Matrix Laboratories' promoter Nimmagadda Prasad and Kadapa member of Parliament YS Jaganmohan Reddy?

The trio had once been the rising stars of Andhra business. But, ironically, their fortunes started sinking from 2009.

According to people who know them closely, all the three who hail from Andhra Pradesh are hardworking and highly ambitious. They want to climb the ladder quickly and have actually expanded their businesses much faster than many other industrialists in the state.

However, while fudging of accounts landed Raju in jail in January 2009, the death of former chief minister YS Rajasekhara Reddy in the same year caused hardships to Jagan, as the Kadapa MP is popularly known.

Prasad, who got Rs 570 crore as his share when he sold Matrix in 2006, is now cooling his heels in Chanchalguda Central Prison here for investing in Jagan's companies. And, there are widespread speculations at present that Jagan will also be counting the prison bars sooner than later.

Of course, Jagan is aware and he himself said many a time that his rebellion against the Congress high command will land him in trouble.

Nevertheless, burning with political ambitions, he dared to defy the authorities in spite of the fact that, due to various reasons, his financial empire had expanded rapidly after his father became the chief minister of Andhra Pradesh in 2004.

In fact, credit goes to Jagan that he relentlessly strived to uphold the image of his father among the masses by continuing to travel the length and breadth of the state as part of his “Odarpu Yatra”, which is ostensibly aimed at consoling the families of the persons who reportedly committed suicide unable to bear the sudden demise of YSR (Rajasekhara Reddy).

In the process, he also floated his own political outfit called YSR Congress Party, which, according to some opinion polls, is set to bag most of the 18 Assembly and a lone Parliamentary constituency for which by-elections are being held on June 12.

Meanwhile, the Central Bureau of Investigation (CBI) had been asked to probe into the sources of funding of various companies floated by Jagan, including Jagathi Publication that publishes Saakshi Telugu daily and Indira Television that broadcasts Saakshi Television.

The CBI registered a case against Jagan and 73 others in this connection and has so far filed three chargesheets. The main charge of the CBI is that investments have been made in Jagan companies on a quid-pro-quo basis for securing benefits from the government when YSR was the chief minister.

Last week, the CBI seized the accounts of Jagathi Publications, Indira Television and Janani Infrastructure, which owns the premises used by Saakshi daily and television.

This week, the investigating agency had arrested Prasad along with KV Brahmananda Reddy, a former special secretary in the AP Investment and Infrastructure Department. The CBI alleged that Prasad invested about Rs 854 crore in Jagan's companies as quid-pro-quo for the benefits received by YSR government.

Prasad dismisses all these allegations. “It is purely a business decision,” he told Business Standard some time back. For example, he said that he had received almost double the amount he had invested in Bharati Cement within two years. Prasad had invested about Rs 280 crore in Bharati Cement and had received about Rs 550 crore when the company was sold by Jagan to French cement maker Vicat SA in April 2010.

Prasad’s arrest is also worrying other industrialists who have put their money in Jagan’s business outfits. These companies include the promoters of India Cements, Penna Group,Ramky Group, Aurobindo Pharma, Hetero Drugs, Mantri Developers, Dalmia Cements (Bharat) Limited and Indu Projects.




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