Can we call this Rs 850 crores : May 25,2012

29 Jun 2012 2:49 AM

How much truth is there in CBI’s charge that Nimmagadda Prasad has invested Rs 850 crores in Jagan’s companies?
Prasad, who invested Rs 100 crores in Jagathi Pubications during 2007-08, has invested RS 280 crores in Bharathi Cements as well. Of the Rs 280 crores, 252.50 crore was direct investement and Rs 28 crores was in holding companies. So the total investment is only Rs 380 crores
In 2010 majority of the Bharati Cements shares were purchased by French company Vicat. Prasad sold his holdings of Rs 252.5 crores for Rs 560.45 crores and could gain Rs 308 crores in less than three years.

Of the Rs 560 crores realized Prasad invested Rs 350 crores in Jagathi Publications. Of the total Rs 350 crores amount invested, it is to be noted, that Rs 308 crores is sum realized (profit) on disposal of Bharathi Cements shares.

This means that he invested Rs 28 crores in holding companies of Bharathi group and Rs 450 cores in Jagathi Publications. If we deduct the Rs 308 crores profit realized by selling shares of Bharathi Cements the net investment of Prasad in Jaganmohan Reddy companies is Rs 170 crores.

Then where did the CBI figure of Rs 850 crores come from? The initial investment in Jagathi of Rs 100 crores, and Rs 280 croers in Bharathi Cements and the Rs 350 crores which is the proceedings of the sale of original investment in Bhaathi were added up, perhaps. It has totally ignored that the profit earned by selling his stock in Bharathi Cements was reinvested.

This distortion has been shown in a magnifying glass by a section of media which is a competitor to Jagathi Publications.