After three days of intense questioning, the CBI arrested YSR Congress chief Jaganmohan Reddy on charges of conspiring, committing fraud, falsifying books and resorting to corrupt practices. The CBI is investigating what is called the Jagan assets case after it was directed to do so by the Andhra Pradesh high court in July 2011. The court order was in response to a PIL by a Congress MLA. The arrest at 7.20pm came after Jagan was interrogated for almost nine hours by the CBI on the third consecutive day at its makeshift office at Dilkusha Guest House, close to Raj Bhavan. CBI sources said Jagan’s replies on the investments into his companies, including Jagati Publications, were not convincing, and that he was stonewalling queries.
The other charge that the CBI held against Jagan was for possessing assets disproportionate to his known sources of income, said a CBI source. Jagan would be produced before the CBI court on Monday where he was anyway scheduled to appear. The CBI will ask for his custody pleading that Jagan was less than cooperative.
There is an anecdote well known in Andhra Pradesh’s political circles. In the run-up to the 2004 general election, Jaganmohan Reddy, then a callow youth, laid claim to the Congress Lok Sabha ticket from Kadapa. His demand was not met. The ticket went to his father’s younger brother, Vivekananda Reddy. The uncle won the seat, but Jagan tried to put “pressure” on him to resign. In the end, Vivekananda could save his seat only by running to Sonia Gandhi. Jagan, angered that he had not been obliged, took himself off to Bangalore, saying he would have nothing to do with Andhra Pradesh and its politics. He turned up only in 2008, a few months before the 2009 general election.
With the benefit of hindsight, the move to Bangalore seems to have been a ploy. CBI’s investigations show it was precisely during 2004-08 that Jagan emerged a larger-than-life operator. According to the CBI, the modus operandi of Jagan — fully backed by his now deceased father, chief minister YS Rajasekhara Reddy — was simple: allocate huge tracts of valuable land (taking advantage of the liberal policies of the government of India, which was promoting SEZs as a panacea for rapid industrial growth) to companies of all sizes and pedigrees, and in return get them to invest in his ventures. The quid pro quo was not direct; sometimes it was through numerous channels. For instance, CBI has discovered that Ramalinga Raju of Satyam scam fame had invested in a company called Vanpic whose promoter allegedly channelized the money to Jagan’s ventures. The whole exercise required the co-option of bureaucrats and ministers. Handpickedpliant officers were detailed for the job. The ministers and the secretaries also made their own deals on the side. The point to note is that in all these dealings, Jagan was nowhere in sight. Neither did he talk to any officer nor did he directly give any instructions.
The CBI case against Jagan is that he was the beneficiary of all these moves. This was because when he set up media companies to bring out a newspaper (all pages colour, published from 23 centres from Day 1 and having its own presses at all the centres) and a TV station, the people who invested in the equity were none other than those who had benefited from these patently unfair deals.
Jagan began to be seen in Andhra from late 2008 onwards. His channel and paper did well with liberal dollops of government advertisements. In the 2009, he was elected to the Lok Sabha from Kadapa — forcing uncle Vivekananda out, as YSR led the Congress to a second consecutive victory in the state. YSR had been given a free hand in selection of candidates. Many of them had won with funds given by YSR. A few months later, when YSR suddenly died, these MLAs were left orphaned. They rallied around Jagan.
As for Jagan, he did the unthinkable. Even as his father’s body lay in state he demanded the CM’s “gaddi” from Sonia Gandhi and Manmohan Singh, who had come to offer condolences; a signature campaign was organized among MLAs. In the past two and-a-half years, his YSR Congress has gone from strength to strength, helped by the confusion in the Congress leadership about how to deal with him — the opinion swinging alternately between “let’s appease him” and “let’s punish him”. With wheels of fortune spinning quickly in Andhra Pradesh, the party bosses have launched a full-fledged assault on Jagan’s citadel. Whether they will succeed or not remains to be seen.
They are up against a man who represents two characters: on the one hand, he is the archetype of a post-liberalization politician for whom there is little to separate his politics from his business; on the other, he is cast in a feudal mode, demanding total loyalty of his men.
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