'Outlook Business' article is full of lies

YSR Congress Party has out rightly rejected and condemned
the contents of the article ‘Doing Business the Jagan way’ published in the fortnightly
‘Outlook Business’ dated 24th November 2012. The following is the full text of the rejoinder
sent to the editor of the magazine by D. A. Somayajulu, member of the party’s
Political Affairs Committee.


D A Somayajulu                                                                         


Political Affairs Committee &

Central Governing Committee


(Formerly, Economic Advisor &
Dy. Chairman,

Agriculture Technology Mission

Government of AP)

Mobile: + 91 9849908504

Mail: somayajuluda@yahoo.com


November 2012


 The Editor

Outlook Business


I refer to the Article ‘Doing Business the Jagan
way’ in your Fortnightly dated 24th November 2012.

At the outset, I would like to submit that Going by
the tone and tenor of the article, it is irresistible for me to believe that
you have fallen for the systematic vilification campaign launched by Telugu
Desam Party (TDP) with a sinister design to tarnish the image of the late Dr Y
S Rajasekhara Reddy, Mr Y S Jaganmohan Reddy, his family, friends and the YSR
Congress Party. I am sorry to say that the half truths and the lies that found
way into the article are nothing but a recitation of what TDP has been relentlessly
propagating since the year 2009 i.e. when it became crystal clear to them that
defeating YSR on the political battle field was next to impossibility; so they
started to damage the personal reputation of YSR in the fond hope of weaning
away some of the supporters of YSR. Unfortunately, because Mr Jaganmohan Reddy
walked out of the Congress Party in defiance of the diktat of Madam Sonia
Gandhi, the Congress Party also started witch hunting Mr Jaganmohan Reddy.

Indeed, there are many corruption cases in our own
State like those against Mr Chandrababu Naidu that have not been brought to the
public knowledge thanks to his clout with the Media. Had you taken up such
issues, I would have appreciated your commitment for cleanliness in public
life. But by repeating what TDP and Congress have been campaigning against Mr
Jagan, I am sorry to say that you are only serving their cause but certainly
not the public cause. Moreover, when the CBI, ED and IT are already probing the
case against Mr Jagan leaving no stone unturned with extraordinary zeal, your
article at this juncture has little meaning.

I have been in public life for over three and half
decades; I had the good fortune of association with premier institutions that
pioneered entrepreneurial development in Andhra Pradesh besides promotion of
home grown technologies. I also was privileged to closely work with the late Dr
Y S Rajasekhara Reddy both when he was the Leader of the Opposition (1999-2004)
and after he became the Chief Minister of Andhra Pradesh (2004-09). I continued
in the Government till May 2011, when I resigned to become Advisor to Mr Y S
Jaganmohan Reddy. 

Mr Y S Jaganmohan Reddy has been an entrepreneur in
his own right, in his own small way, since 1994 onwards. He was never an
employee nor an intern anywhere, much less under Mr Lagadapati Rajgopal; nor
was there any compulsion for him to depend on his in-law’s financial support,
as he came from relatively affluent background. 
Mr Jagan promoted a 40 MW hydro power project in Karnataka with a
capital outlay of Rs 170 crores much before his father became CM of Andhra
Pradesh on 14th May 2004. He promoted two more small hydro power
projects at the same time. He continued his pursuit even after his father
became CM.

It is everybody’s knowledge that post 2004, Indian
economy boomed like never before, registering a GDP growth rate as high as 10%
in some of the years. The country achieved Current Account surplus. The Credit
Deposit ratio of Indian banking system which remained subdued at 55% throughout
the NDA rule has suddenly scaled upto 75% by the year 2008, pumping in an
additional Rs 12 lakh crores bank finance into the system. There was phenomenal
buoyancy in the capital markets and FDI influx into the country, providing,
over all, an extremely congenial atmosphere for industrial expansion. Not only
Mr Jagan but thousands of other entrepreneurs, who were by no stretch of
imagination related to any politician, let alone to a CM, grabbed these
opportunities and grew very substantially.

India is a country which offers opportunities to
everybody with talent, hard work and dedication to grow. We have seen as to how
a Sub Inspector from Mumbai has become country’s home minister; a police
constable from AP has recently become a Union Minister in the recent cabinet
expansion. This is a country where Mr Dirubhai Ambani, a clerk in a Petrol
bunk, in his own life time, became India’s largest corporate body providing
employment directly or indirectly to about 3 lakh persons contributing 3% of
India’s GDP. Same is the case with Mr Narayana Murthy of Infosys, Adanis,
Ruias, Agarwal of Vedanta group, Lakshmi Mittal and a thousand others.

In my own state, the institution with which I was
associated promoted hundreds of first generation entrepreneurs, who had no
access to financial resources. They include Dr Reddy of Reddy Laboratories, Mr
K V K Raju of Nagarjuna Fertlilizer group, Mr B V Raju, who promoted several
cement factories including Raasi and Vishnu Cements, Mr G V Krishna Reddy, who
started the Novopan and later the GVK group, Mr G M Rao of GMR group, Mr B.
Ramalinga Raju of Satyam group, only to name a few. They were not sons of CMs;
nor they had any great business experience before they became great
entrepreneurs. Indeed, they demonstrated to the world that lack of financial
resources cannot stop a truly great entrepreneur from progressing and growing
big. Same is the case with Mr Y S Jaganmohan Reddy, Sri Lagadapati Rajgopal and
Sri Nama Nageswara Rao.  Indeed, it is no
special advantage being the son of a politician. In fact, if only Mr Jagan was
not son of a CM, perhaps, he would have done much better.

I am shocked that, out of all people, Mr Rajgopal
and Mr Nama Nageswara Rao, whose rags to riches story in the shortest possible
time should eminently qualify as a case study in the best of business schools
in the world, should be telling your reporter that Mr Jagan had to use his
father’s position to grow as an entrepreneur. Where were these two people
hardly ten years ago? What was their group net worth then and what is their
business net worth now? One is a Congress MP and the other is a TDP MP. Will
they be honest enough to tell us how much of their political clout has
contributed to their business growth? Are they not casting the aspersions against
Mr Jagan only to please their political bosses? If you thought that Mr Jagan’s
rise as a businessman was phenomenal, what should you think of Mr Rajgopal, who
became India’s largest private power developer with the assets in his companies
exceeding atleast 20 times more than that of Mr Jagan.

Unfortunately, all the people your reporter spoke
to are in one way or other connected to TDP and Congress Parties and are sworn
enemies of YSR family not because of any ideological differences nor because of
their commitment for honesty in public life but because they are unable to
defeat either YSR when he was alive or Mr Jagan now. Mr Jayaprakash
Narayana  and his political outfit have
always postured themselves as crusaders against corruption. There was one major
scam or the other throughout the 9 years rule of Mr Chandrababu Naidu. Let
alone championing those issues himself, he did not even symbolically join the
opposition parties which raised hundreds of allegations of corruption against
Mr Chandrababu Naidu and his TDP Government during 1994-2004; But he loses no
opportunity to hit out at Mr Jagan, although Mr Jagan himself was never in the
Government. There is thus much more than what meets the eye.

Coming to the Raja of Corruption, the book
published by TDP before the 2009 General Elections, it is nothing but a trick
all the political parties have been playing in our State during election times.
The BJP issued a charge sheet comprising 100 corruption charges in 1998
elections against Mr Chandrababu’s TDP Government and the BJP went to the
extent of openly declaring that if they came to power in Delhi, the first thing
they would do was to arrest Mr Chandrababu Naidu. Unfortunately Mr Vajpayee
became PM with TDP support; so, they forgot the charge sheet. Similarly, the
Communist party also issued a big charge sheet against Mr Chandrababu Naidu and
forgot about it. Following the same practice of their one time allies, before
the last general elections, the TDP brought out ’Raja of Corruption’’ which is
nothing but a scandalous pamphlet designed to tarnish the image of late YSR.
Through that scandalous book, the TDP launched a relentless campaign with the
help of a large number of media outfits supporting their Party throughout the
Country that YSR family illegally accumulated one lakh crores of rupees. The
UPA Government which examined the contents of that book safely consigned it to
dust bin in 2009.

The whole situation changed with the
untimely death of YSR in a plane crash in September 2009. For the TDP, which was hoping to encash the sudden vacuum
in the leadership in the state following the death of the invincible YSR, the
decision by Mr Jaganmohan Reddy to start a new political party naturally came
as a rude shock. The Congress Party was also shaken by his decision to leave
the Party. That Mr Jagan was walking away virtually with the entire vote bank
of not only Congress Party but also of Telugu Desam Party was not something the
Congress High Command and Mr. Chandrababu Naidu could digest. Both of them came
together in filing the PIL against Mr. Jaganmohan Reddy. This is unthinkable.
They are trying to malign his image in the fond hope of regaining the vote
bank, which is simply not happening. The High Court ordered a CBI probe.
Because, it is not a court monitored CBI case, it became PMO monitored CBI case
with all the attendant vagaries.

The entire investigation by CBI in the case against
Mr Jagan is pre-meditated to somehow implicate him in one
case or the other only because he walked out of the Congress Party in
November 2010. This is an unprecedented case in
the Political & Legal history of the Country; it typically exemplifies as
to how the Congress High Command has been using every institution in the
Country to stifle political dissent, if by chance one gets on to the wrong side
of the Congress High command. It is relevant to recall that all the political
parties, including those supporting the UPA, during the debate on the Lok Pal
bill both in Rajya Sabha and Lok Sabha, have in unequivocal terms condemned the
deliberate misuse of all investigative agencies in India by the Congress High
command for eliminating political dissent.

Shocked by the unethical arrest of Mr Jaganmohan
Reddy on 27-5-2012, when he was in the midst of his Party’s election campaign
for the then upcoming by-election to one Lok Sabha seat and 18 MLA seats in
AP,  ‘The Hindu’in
its Editorial entitled ‘Petty scheming, big bullying’ published on 29-5-2012 commented

“If the Congress is to effectively meet the Jaganmohan Reddy
challenge, it will have to do so politically, and not through the
disproportionate use of investigative assets.’

As far as the allegation of quid pro quo in the
share investments of Mr Jagan’s two companies viz Bharati Cement and Jagati
publications, it is important to note that there are many persons, who were the
beneficiaries of any Government largesse also invested in the shares of these
companies at the same premium as others against whom there are complaints of
quid pro quo. In any case, the shares continue to be in the names of the

There is no complaint that these investments are
benami for Mr Jagan. The investors are free to sell at any time to anybody of
their choice. The premium collected by these companies is with the company
itself. There are no complaints that Mr Jagan has either siphoned or
misappropriated the premium amount in the companies. Moreover, these companies
are not sham companies. Bharati Cement is producing high quality cement and
Jagati is publishing Sakshi Telugu daily which is the second largest circulated
Telugu Daily, besides running a very popular News Channel.

For one to say that the premium collected by Jagati
that publishes this news paper is exorbitant, the nearest comparison has to be
necessarily with EENADU whose circulation is more or less equal to that of
Sakshi published by Jagati. The premium at which the owners of Ushodaya, the
company publishing EENADU sold 26% of the shares to JM Financials is atleast
200% more than the one charged by Jagati. Ushodaya could do this even in the
face of huge accumulated losses of Rs 1800 crores for their group. This was
possible because the Media was the hot favourite of the investors at that time.
The Sun TV network had a market capitalization of Rs 12000 crores and Deccan
Chronicle had a market capitalization of Rs 4,000 crores at that time. Given
this, how can anybody conclude that a quid pro quo was involved when Jagati sold
some of its shares at a premium?

The fact that 51% of the shares of Bharati cement
were purchased by a global cement giant at much higher premium than what Mr
Jagan charged from the investors against whom there are charges of favouring Mr
Jagan should make it clear that the actual value of the shares of Bharati
Cement were many times more than what is really collected by Bharati Cement.
Then, where is the quid pro quo, particularly when many of the investors in
Bharati Cement gained substantially on the aforesaid transaction with the
global cement giant?

The limited issue is ---what did the CBI unearth so
far other than what Mr Jaganmohan Reddy himself has disclosed to Lok Sabha
Secretariat, IT, ROC and in the Affidavits filed with Election Commission of
India in 2009? In fact, the Raja of Corruption is also in a way a reproduction
of what Mr Jagan himself has disclosed to the world; there was certainly
nothing new that they brought out.

Where is that one lakh crore of rupees; where is
the recently revised 43,000 crore rupees? Who will take responsibility for
these figures? It is so unfortunate that the Congress High Command in alliance
with TDP manufactures a figure of Rs 1,00,000 crores assets of Mr Jagan and
with the help of a section of Media carries on relentless propaganda about that
figure and they want Mr Jagan to prove that it is not correct, that too keeping
him in confinement.  How unfortunate is
the whole story?

I would have appreciated had you spoken to Mr Jagan
or some of his family members before publishing this article.

I shall be grateful if you publish this as it is in
your upcoming fortnightly as our rejoinder.


Yours faithfully,


Back to Top