In a move that is certain to invite charges of political witch-hunt, the income-tax department has opened investigations into 15 companies owned by rebel Congress MP Jagan Mohan Reddy, including Bharti Cements and Jagruti Publications, for allegedly evading tax.
Jagan Mohan Reddy, son of former Andhra Pradesh chief minister, the late R S Rajasekhara Reddy, had resigned from his Kadapa Lok Sabha seat, and also from the primary membership of the Congress late last month. He has already gone public with the intention of floating his own political outfit —an announcement that is giving jitters to the Congress leadership. That the I-T department would suddenly stumble upon evidence of tax evasion by companies owned by the late YSR’s son is certain to be used by his supporters for accusing the Congress of being vindictive and taking recourse to strong-arm tactics to browbeat a potential challenger in Andhra Pradesh.
Jagan Mohan Reddy’s companies are not only being probed for tax evasion, but they are, according to Times NOW news channel, also being investigated for divesting its stake even before the companies had started production. What the I-T department primarily probing is how the share prices shot up in such a short time. Also Jagan paid an advance tax of `84 crore in September 2010, which is also under the department’s gaze.
Citing documents perused by it, the news channel said that Jagan’s partners bought equity in his firm, Bharti Cements, even before it commenced production. Jagan subsequently offloaded his equity to a French firm, Parficim, and earned around `416 crore. Again, the prices of his shares shot up by almost 60 times within just four years.
While announcing his decision to part ways with the Congress, Jagan Mohan Reddy had, on November 29, faxed a five-page letter written by him to Congress president Sonia Gandhi informing her that his mother Y Vijayalakshmi, was also resigning from the party’s primary membership as well as from the Pulivendula assembly seat.
Even though the estranged Congress MP had been engaged in bitter tussle with the state Congress leadership for inheriting the YSR legacy for over a year now, the trigger for his resignation was what he called the attempt to lure his uncle YS Vivekananda Reddy with the offer of a Cabinet berth and “thereby create fissures in my family.”
While the state Congress is confident of weathering the storm created by Jagan Mohan Reddy’s resignation, the latter’s followers claim to enjoy the backing of some 20 MLAs, enough to bring down the Kiran Kumar Reddy government. To ward off the threat, the Congress brass has opened channels of communication with veteran film star Chiranjeevi. His Praja Rajyam Party has a strength of 18 MLAs in the AP assembly.
CAclubindia
