Hyderabad: As the Enforcement Directorate has started probing the assets of N Chandrababu Naidu and alleged omissions and commissions during his tenure as chief minister as ordered by the AP High Court, The Hans India looks into the specific complaints mentioned by the petitioner Y S Vijayamma and which of them attract Foreign Exchange Management Act (FEMA) and who are the respondents alleged to be involved in FEMA violations.
It may be recalled that the High Court on November 15 ordered the ED probe along with investigations by other agencies like the CBI. The CBI has been asked to submit a report in three months in a sealed envelope.
A division bench consisting of Justices Ghulam Mohammed and Nooti Rama Mohana Rao will thereupon examine the reports before deciding what action to be taken. Those who were served notices by ED are N Chandrababu Naidu, N Bhuvaneswari, N Lokesh, NTR Trust and industrialists Sujana Chowdary and C M Ramesh.
Nara Lokesh, the only son of Chandrababu Naidu, studied in Hyderabad up to Intermediate. He never had any scholarships to his credit. He obtained his Bachelor’s Degree (1997-2000) from the prestigious Carnegie Mellon University and his Masters (2000-2002) from Stanford University in the US.
As Lokesh did not have the necessary grades, it was necessary for large endowments to be made to the universities. The amounts that were donated from unknown Indian sources were Rs10 crore to Carnegie Mellon and Rs12 crore to Stanford. There is reason to believe that these payments came from the accounts of Satyam Ramalinga Raju in return for the various benefits offered to him.
Another issue is the funding of huge educational and living expenses amounting to $240,000 of Lokesh which were not reflected in the Income Tax records of any of his family members, including Naidu.
Lokesh has no source of income. However, he acquired lands at Nindali village in Nellore District and near Bangalore and Mumbai worth hundreds of crores.
Lokesh has been consistently increasing his stake in Heritage Foods India Limited from zero to 9%. He has substantial stake in holding and investment companies viz., Nirvana Holdings Private Limited, Nirvana Power Limited, Nirvana Logistics and Warehousing Limited, Nirvana Energy Limited, Nirvana Estates Private Limited, Niravana Packing
Private Limited, Niravana Media Private Limited, Megabid Finance and Investments Private Ltd, Heritage Foods Retail Limited, Heritage Onpro Limited, Heritage Agro Marine Private Limited, Heritage Fin Lease Limited, Bizpro Technologies Limited, Red Hill Logistics and Warehousing Private Limited and Heritage International Limited, all of which are from unknown sources.
Sujana Chowdary is a sitting TDP Rajya Sabha member. Naidu and Chowdary are close associates. Chowdary owns nearly 100 companies, most of which are sham, and are merely conduits for the passing of hawala money, that not only partly fund the election expenses of the TDP, but also the lavish lifestyles of its leaders.
It is submitted that the transactions between these companies were so timed to ensure the influx of funds in the run-up to the Andhra Pradesh Legislative Assembly elections in May 2009.
Importantly, shortly after this transaction, Mrs. Naidu resigned from the company as director. The money that came in cash from Sujana Chowdary was for campaign funding, which was used in the May 2009 elections. There exists evidence of 20 companies belonging to Sujana Chowdary which received large amounts from abroad, which were followed by cash withdrawals at the time of the 2004 elections.
Chowdary first established a slew of companies to bring Naidu’s money under the corporate umbrella.
Chowdary created circular transactions among his corporate entities, thereby orchestrating purchases and sales entries running into thousands of crores, so that funds could be moved through books of accounts very effectively and without attracting income tax provisions. A cursory glance of the modus operandi given below would give more insight to the scheming and structuring of the total money laundering operations.
Naidu was using the vehicle of Sujana Group and making Chowdary the beneficiary of the coveted MP post. Chowdary, continued his nefarious activities, setting up the entities even outside India. He used the tax havens of the Cayman Islands, Mauritius, Hong Kong and Dubai for this purpose. The money laundering operations have used the Invoice Financing Facility route, which is in vogue for such kind of operations.
The modus operandi used by Chowdary for the quid pro quo beneficiaries of Chandra Babu Naidu Government, has been to accept the tainted money in those countries.
NTR Memorial Trust
On 15.2.1997, the NTR Memorial Trust was founded, with Naidu as both the Settler and the Trustee, and Seetharamaiah (his auditor) and D.Srinivasa Rao (member, TDP) as the other Trustees. Ostensibly, the object of the Trust was charitable in nature. It is to be understood in no uncertain terms that although NTR Trust is registered as a Public Charitable Trust, Naidu has absolute stranglehold on the organization.
The Trust holds highly valuable real estate and other projects, all of which can become the private empire of Naidu as the present members of the so- called Public Charitable Trust are Naidu, his wife and his auditor, who has no personal stake.
The G.O. issued in this regard made it clear as a condition of the lease that the land would not be used for political activities or commercial purposes. However, within a few weeks, the Trust applied once again to the Government to grant a relaxation to permit it to rent the land for the purpose of political activity.
It is submitted that with the Trust and the TDP headquarters in the same location, large infusions of foreign funds are being made via the Trust, and then being utilized for the purposes of the party and Naidu, without being accounted for or shown in the books of accounts. This amounts to a violation of both the Foreign Exchange Management Act and the Prevention of Money Laundering Act.
Money laundering and foreign assets of Naidu
Despite the partnership summits which were organized in Hyderabad during Naidu’s regime, and his official trips to Europe and USA, no substantial FDI was received by the state of Andhra Pradesh from the West. Interestingly, almost all the contracts like Kakinada Sea Ports, Raintree Park in Hyderabad, GMR International Airport, Ascendas IT Park, AP Gems and Jewellery Park, and Emaar township were awarded to international companies of Malaysia, Singapore or the UAE.
The then Prime Minister of Malaysia, Mahathir Mohammed had stepped down after facing severe corruption charges in his country. Naidu’s personal friendship with Mahathir is not a secret to the observers of international relations.
Mirzan Bin Mahathir, the elder son of Mahathir Mohammed, was the Chairman of the International Seaports Consortium and even has a majority stake in the said company which got the Kakinada Seaport.
In addition, as far as the AP Gems & Jewellery Park is concerned, Naidu via APSTC gave 2.6 acres in 2002 in Banjara Hills to Chukkapalli Suresh (MD of AP Gems and the brother of a TDP candidate). A company named IOI India headed by C. Suresh gets financial funding from its holding company IOI Mauritius. Naidu is the owner and beneficiary of IOI Mauritius, which is using its subsidiary in India to launder illegal moneys.
Further enquiries in this regard revealed that the land on which the hotel building is located in 1, Unity Street, Singapore, 237983, is owned by M/s Parksing Property Pte. Limited.
The hotel is managed/administered by the famous Park Group on payment on royalty basis. It is interesting to note that 100 percent equity in Parksing Property Limited is held by a company incorporated in British Virgin Islands namely Eagle Force Profits Limited, P.O.Box 957, Road Town, Tortola, British Virgin Islands. This BVI Company in turn is owned by a private discretionary trust in which family members and relations of Chandrababu Naidu are the beneficiaries.
CM Ramesh is a senior TDP functionary and a close aide of Naidu. Ramesh is the Chairman of Rithwik Projects Limited, a contracting company. Rithwik Projects Private Limited is another company which holds Naidu’s ill-gotten money.
The Government of A.P. headed by Chandrababu Naidu as the Chief Minister of the State entered into a MoU on 9.8.2003 with IMG, a company registered under the Companies Act, 1956 incorporated by Ahobala Rao and Prabhakara Rao for transfer of 855 acres of land and to develop stadia in Hyderabad and Ranga Reddy District.
The said company was registered under the Companies Act, 1956 on 5.8.2003 with a paid up share capital of Rs.1.00 (ONE) lakh. Of this, 999 shares of Rs 100 denomination were held by Ahobala Rao and one share by his brother Prabhakar Rao.
IMG did not even have a proposed office or address to function at the time of incorporation. In the Memorandum of Association submitted to the Registrar of Companies, the registered office address was shown as the “State of Andhra Pradesh.”
IMG has also falsely claimed to be the subsidiary of IMG Academies, Florida, USA, an expert Sports School. Except in the note file, there was no record of any deliberations or dialogue between the Government and the Florida Company.
Further the State Government undertook to establish a company called AP Sports Events Company which was to be conferred with the title and ownership of all the Government Sports Stadia and IMG was given the liberty to take on lease or purchase all the stadia owned by AP Sports Events Company after it came into existence at a price to be worked out according to the formula annexed to the MoU.
This was clearly a reciprocal arrangement between the Chief Minister and the Rao brothers, where Mrs Chandana Khan, Principal Secretary, Department of Tourism, Youth & Culture, was a necessary and willing accomplice.
Courtesy: The HANS India