YSR son’s newspaper linked to Rajus

The political storm over B Ramalinga Raju's fraud at Satyam is drawing closer to the Andhra Pradesh chief minister, YS Rajasekhara Reddy.

Telugu Desam Party (TDP) chief N Chandrababu Naidu has linked the name of Maytas, owned by the Raju family, to Sakshi, a newspaper started by the chief minister's son, YS Jagan Mohan Reddy.

Many corporate houses have allegedly funded Sakshi, which had a sensational launch in March, 2008, with 23 editions being started simultaneously across Andhra Pradesh. According to sources, the newspaper has already crossed the 13 lakh circulation mark, beating rival Eenadu, which is close to Naidu.

Naidu and the CM are already trading charges while a whisper campaign has begun over the unusual success of Maytas in winning government projects. Maytas Properties and Maytas Infra are property and infrastructure companies and the Satyam scam unravelled when the Rajus tried to unsuccessfully merge the two with Satyam last month. Shareholders scuttled the idea.

Naidu's fresh allegation, that Maytas funded Sakshi, is essentially an effort to link the Satyam scam to the CM, for Maytas does not officially figure in the list of investors in Sakshi.

Soon after the launch of Sakshi started by YS Jagan Mohan Reddy, TDP chief Chandrababu Naidu had tabled a no-confidence motion against the YSR government and, during the course of the debate, he had alleged that many investors were essentially forced to back Sakshi. In turn, the Congress pointed fingers at Naidu for his alleged investments in the Eenadu group and another Telugu daily Andhra Jyoti. 

Naidu had alleged that the promoters of several companies, including India Cements, the Lanco group, the Ramky Group, Aurobindo Pharma, Matrix Laboratories, Hetero Drugs, Karvy, Pioneer Infrastructure and Tanla Solutions Ltd were forced to invest up to Rs 365 crore in Jagathi Publications (P) Ltd, the company which publishes Sakshi.

The companies, in return, were allotted land for special economic zones and other projects, he alleged. Jagathi's shares of Rs 10 each were privately placed at Rs 350 each, alleged Naidu.

While the debate had raised a ruckus at that time, the chief minister's son, Jagan Mohan Reddy, confirmed later in an interview that, “Deloitte has valued Sakshi at Rs 3,500 crore 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 registrar of companies, 23 companies, including four from West Bengal, two from Karnataka and one each from Maharashtra and Gujarat, invested in Sakshi, sources said.

While the promoters of India Cements are said to have put in Rs 34 crore plus, the younger brother of Lanco group founder L Rajagopal — L Sridhar — reportedly invested Rs 50 crore in the newspaper, a senior official associated with the company said on condition of anonymity.

However, with the mention of Maytas in this connection, particularly against the backdrop of the Satyam fraud, attempts are clearly being made to link the CM and his family directly with Raju's fraud. This is why questions are being raised about why the state authorities took more than two days to arrest Raju after his confession on January 7.

The central government's Serious Frauds Investigation Office (SFIO) has kicked off an investigation into the eight subsidaries of Satyam to check whether funds have been diverted from the IT company into them.

Meanwhile, the Left parties in the state have also joined the Telugu Desam in demanding  a probe by a Special Investigation Team (SIT) instituted by the centre to check whether Maytas was shown any special favours by the YSR government.

As the general elections get closer, the muck-raking is going to increase rather than decrease.