YSR dodged queries on Raju family companies

Mail Today January 14, 2008


THE Satyam fraud is getting a political makeover. Now, the Y. S. R. Reddy government and the Centre are in the dock for shielding queries on companies run by B. Ramalinga Raju’s family.

Both the Andhra Pradesh government and the Centre had been reluctant in parting with information on investments in Raju family’s projects or initiating enquiries into allegations of possible tax evasion. YSR government had allegedly stonewalled a former top bureaucrat’s attempts to know the shareholding pattern in Gangavaram Port Ltd, promoted by Raju’s brother- in- law D. V. S. Raju, for 15 months citing that it was ‘ confidential’. The redoubtable former top bureaucrat has asked the Prime Minister on Monday to investigate the possible rerouting of Satyam’s siphoned money into the Gangavaram Port project.

Worse, former economic affairs secretary E. A. S. Sarma, who was appointed by the Maharashtra government to probe Enron, has explained to the PM how the government stonewalled all attempts to find out the details of the overseas investments in such projects.

Ramalinga Raju’s brother- inlaw D. V. S. Raju, a co- founder of Satyam is leading a consortium of companies promoting the Gangavaram Port. Initially promoted by Dubai Ports Worldwide, the project was controversial from the word go. Senior naval officers had alleged that their coveted spot for the country’s only nuclear submarine base was usurped by the DPW helped by the then chief minister Chandrababu Naidu and the NDA government.

Interestingly, Naidu’s successor Y. S. R. Reddy’s government was even more cautious about Raju’s interests. The D. V. S. Raju consortium had taken over the project and Reddy was in the saddle when Sarma filed an RTI application seeking Gangavaram’s shareholding pattern.

The veteran, who still advises the Centre and the Planning Commission, had to move an appeal with the AP State Information Commissioner to find out that Lakeside Investments, a Mauritius- based investment company had over 18 per cent stake in the Gangavaram company.

It took the Reddy government 15 months and many reminders from the Information Commission to reply to Sarma’s queries in August 2007.

On Tuesday, D. V. S. Raju said he has had no cordial relations with Ramalinga Raju for the last 17 years after he split with Satyam and there were no business transactions with Satyam.

He added that his overseas partner Lakeside Investments has nothing to do with Satyam and was a wholly owned subsidiary of the US investment company Warburg Pincus.

HOWEVER, the Centre had simply refused to investigate Sarma’s allegations.

“ On hearing about the case of tax evasion by Indians through the Leichtenstein route, I filed my first RTI application to the Central Board of Direct Taxes on July 29, 2007, enquiring about the progress of collection of information from the German authorities.

CBDT’s reply was not quite helpful. To pursue the lead ( on Gangavaram) further, I filed another application dated 10- 9- 2008 under RTI Act asking CBDT to provide information on many aspects of tax evasion through the known tax havens like Mauritius.” The CBDT under the Union finance ministry evaded the question and replied that its “ FT& TR- 1 division does not carry out investigations related to tax evasion”. Though D. V. S. Raju has denied any involvement of Satyam funds in his project, Sarma has quoted a local daily to seek an enquiry into a possible fraud by the Raju family.

In fact, Sarma who had exposed YSR’s favouritism in giving away land violating regulations at a concessional rate to Satyam in Vishakhapatnam, now points out that Satyam and Maytas represent just a tip of the iceberg of a large transnational fraud involving money laundering patronised by politicians.