The Andhra Pradesh High Court has ordered the Central Bureau of Investigation to look into the assets of Mr YS Jaganmohan Reddy, the young politician from Andhra Pradesh who was hoping to succeed his father and become Chief Minister of the State. While delivering its verdict on the writ petitions filed by other politicians, the Andhra Pradesh High Court said that Mr Reddy’s alleged financial misdeeds involved huge Government largesse and corporate dealings, including large investments as part of the quid pro quo arrangement for the benefits received by the investors from the Government.
The High Court observed that starting May 2004, Mr Reddy floated a number of companies “wherein quid pro quo investments have been made out of the benefits received by the investors/beneficiaries from the decisions of the State Government in various forms like SEZs, irrigation contracts, relaxation/permission for real estate ventures, mines etc, besides payment of huge premium amounts in the shares and invested in the companies by such beneficiaries.”
Stating that the material available supports the need for a thorough probe into all aspects of Mr Reddy’s financial misdeeds, other charges of corruption and money-laundering, the Bench also noted that there were “criminal conspiracies and commission of other related offences involving huge investments by local and foreign companies”, including some that were located in tax havens like Mauritius.
Corporates and individuals who bene-fited from these Government favours were allegedly made to invest kickbacks in Mr Reddy’s various businesses. On account of the quid pro quo arrangement, Mr Reddy’s income rose from Rs 11 lakh in 2004 to Rs 43,000 crore by the time his father YS Rajasekhara Reddy died in 2009. Mr Reddy approached the Supreme Court against the probe ordered by the High Court but the apex court rejected his appeal, saying that the High Court’s order was reasonable.
However, it is unfair to single out Mr Reddy for amassing a large amount of wealth in a very short time without taking into consideration other equally wealthy politicians like former Chief Minister of Jharkhand Madhu Koda who is currently behind bars on similar charges or the former Chief Ministers of Bihar and Uttar Pradesh, Mr Lalu Prasad Yadav and Mr Mulayam Singh Yadav respectively, or even the present Chief Minister of Uttar Pradesh, Ms Mayawati, for that matter. All of them have either faced or are currently facing CBI inquiries into their assets.
If the present Chief Minister of Tamil Nadu, Ms J Jayalalithaa, is to be believed, her predecessor, Mr M Karunanidhi, had pumped Rs 5,000 crore into the Assembly election earlier this year. Recalling the stringent measures taken by the Election Commission to curb money power during elections, she said Rs 50 crore had been reportedly seized from the DMK. Later, Ms Jayalalithaa even added: “I came to know that some DMK men had said they were not bothered by this as it was like little water spilling out of a pot full of water.”
In the national capital, a chargesheet filed by the Delhi Police in the cash-for-vote scam last month has alleged that former Samajwadi Party leader Amar Singh conspired with one of his former aides, Mr Sanjeev Saxena, and others to bribe Members of Parliament, while another accused, Mr Sudheendra Kulkarni, played an active role during the confidence motion. Mr Singh has been charged under Section 12 of the Prevention of Corruption Act. “There is concrete evidence against Mr Singh. He is the prime accused who played the major role in the scam. The total deal was of around Rs9 crore,” according to the Delhi Police chargesheet.
These instances of corruption are only trailers, and that too short ones, that are evidence of how even a huge sum such as a crore of rupees has little value for corrupt politicians, even those at the municipality level. The Supreme Court has more than once pulled up the Union Government for withholding information on black money stashed away in foreign banks on the grounds that the crime is not just limited to tax evasion but is one that is “mind boggling” and amounts to theft and plunder of national wealth which also has significant security ramifications.
In response, the Government has made the right kind of noises, saying that it is committed to curbing corruption and will take all necessary steps to do so. Fearing that its authority is being curbed, the Government told the Supreme Court on August 24 that the court-appointed Special Investigation Team to investigate the issue of back money needs to be scrapped. If the objective of the Supreme Court and the Government is the same, it is amazing to see the the kind of technicalities that the Government can resort to so as to try and scuttle the Supreme Court’s order.
Sadly, the stark truth is that no business deal in India can be completed without black money. Whether it is a realty deal or a matter of getting a sanction for a permit, the fact remains that black money rules supreme. Also, the recent anti-corruption campaign has had no effect on the corrupt. Ultimately, corruption and black money are two sides of the same coin; they co-exist side-by-side. Indeed, most of the socio-economic problems faced by our nation have the same deep, underlying inter-connection.
The way things are progressing in this country, and particularly the manner in which the wealth of politicians has been increasing by leaps and bounds, only goes to prove what US President Harry S Truman once said: “You cannot get rich in politics, unless you are a crook.” He had also added, “I never give them hell. I tell them the truth and they think that it is hell”. The problem in our country is that we treat economic crime, particularly the looting of public money, as something that is not of a very serious nature. We do not look down at these looters as we do at thieves and dacoits.
In a first-of-its-kind move, the Swiss Government announced last month that it will tax black money owned by British citizens that has been parked in secret accounts in Swiss banks. According to reports, this could result in anything between three billion and six billion pounds being handed over to the British Government every year. The agreement between the British and Swiss Government is part of the former’s efforts to track down and tax money hidden in foreign accounts.
This follows a similar deal signed earlier between German and Swiss authorities. No doubt, this is a landmark achievement. The world has clearly changed as even a few years ago nobody would have anticipated such an agreement to tackle tax evasion. As Mr David Gauke, the Exchequer Secretary to the Treasury in the British Government said: “The historic agreement will enable us to collect billions of pounds from those who have for too long evaded their responsibility to pay tax by abusing Swiss banking secrecy.” For decades, Swiss banking laws have provided complete secrecy to foreign citizens operating bank accounts in that country. Account holders have used that facility to hide money from their own tax authorities without even having to pay any Swiss tax. From 2013 onwards, Swiss authorities will begin to tax British account-holders and directly transfer that money to the British Treasury, but without revealing the identity of the account-holders. The least that the Government of India can do to tackle the menace of black money is to negotiate a similar agreement with the Swiss authorities so that at least a part of our national wealth can be retrieved.
Source: The Pioneer
The High Court observed that starting May 2004, Mr Reddy floated a number of companies “wherein quid pro quo investments have been made out of the benefits received by the investors/beneficiaries from the decisions of the State Government in various forms like SEZs, irrigation contracts, relaxation/permission for real estate ventures, mines etc, besides payment of huge premium amounts in the shares and invested in the companies by such beneficiaries.”
Stating that the material available supports the need for a thorough probe into all aspects of Mr Reddy’s financial misdeeds, other charges of corruption and money-laundering, the Bench also noted that there were “criminal conspiracies and commission of other related offences involving huge investments by local and foreign companies”, including some that were located in tax havens like Mauritius.
Corporates and individuals who bene-fited from these Government favours were allegedly made to invest kickbacks in Mr Reddy’s various businesses. On account of the quid pro quo arrangement, Mr Reddy’s income rose from Rs 11 lakh in 2004 to Rs 43,000 crore by the time his father YS Rajasekhara Reddy died in 2009. Mr Reddy approached the Supreme Court against the probe ordered by the High Court but the apex court rejected his appeal, saying that the High Court’s order was reasonable.
However, it is unfair to single out Mr Reddy for amassing a large amount of wealth in a very short time without taking into consideration other equally wealthy politicians like former Chief Minister of Jharkhand Madhu Koda who is currently behind bars on similar charges or the former Chief Ministers of Bihar and Uttar Pradesh, Mr Lalu Prasad Yadav and Mr Mulayam Singh Yadav respectively, or even the present Chief Minister of Uttar Pradesh, Ms Mayawati, for that matter. All of them have either faced or are currently facing CBI inquiries into their assets.
If the present Chief Minister of Tamil Nadu, Ms J Jayalalithaa, is to be believed, her predecessor, Mr M Karunanidhi, had pumped Rs 5,000 crore into the Assembly election earlier this year. Recalling the stringent measures taken by the Election Commission to curb money power during elections, she said Rs 50 crore had been reportedly seized from the DMK. Later, Ms Jayalalithaa even added: “I came to know that some DMK men had said they were not bothered by this as it was like little water spilling out of a pot full of water.”
In the national capital, a chargesheet filed by the Delhi Police in the cash-for-vote scam last month has alleged that former Samajwadi Party leader Amar Singh conspired with one of his former aides, Mr Sanjeev Saxena, and others to bribe Members of Parliament, while another accused, Mr Sudheendra Kulkarni, played an active role during the confidence motion. Mr Singh has been charged under Section 12 of the Prevention of Corruption Act. “There is concrete evidence against Mr Singh. He is the prime accused who played the major role in the scam. The total deal was of around Rs9 crore,” according to the Delhi Police chargesheet.
These instances of corruption are only trailers, and that too short ones, that are evidence of how even a huge sum such as a crore of rupees has little value for corrupt politicians, even those at the municipality level. The Supreme Court has more than once pulled up the Union Government for withholding information on black money stashed away in foreign banks on the grounds that the crime is not just limited to tax evasion but is one that is “mind boggling” and amounts to theft and plunder of national wealth which also has significant security ramifications.
In response, the Government has made the right kind of noises, saying that it is committed to curbing corruption and will take all necessary steps to do so. Fearing that its authority is being curbed, the Government told the Supreme Court on August 24 that the court-appointed Special Investigation Team to investigate the issue of back money needs to be scrapped. If the objective of the Supreme Court and the Government is the same, it is amazing to see the the kind of technicalities that the Government can resort to so as to try and scuttle the Supreme Court’s order.
Sadly, the stark truth is that no business deal in India can be completed without black money. Whether it is a realty deal or a matter of getting a sanction for a permit, the fact remains that black money rules supreme. Also, the recent anti-corruption campaign has had no effect on the corrupt. Ultimately, corruption and black money are two sides of the same coin; they co-exist side-by-side. Indeed, most of the socio-economic problems faced by our nation have the same deep, underlying inter-connection.
The way things are progressing in this country, and particularly the manner in which the wealth of politicians has been increasing by leaps and bounds, only goes to prove what US President Harry S Truman once said: “You cannot get rich in politics, unless you are a crook.” He had also added, “I never give them hell. I tell them the truth and they think that it is hell”. The problem in our country is that we treat economic crime, particularly the looting of public money, as something that is not of a very serious nature. We do not look down at these looters as we do at thieves and dacoits.
In a first-of-its-kind move, the Swiss Government announced last month that it will tax black money owned by British citizens that has been parked in secret accounts in Swiss banks. According to reports, this could result in anything between three billion and six billion pounds being handed over to the British Government every year. The agreement between the British and Swiss Government is part of the former’s efforts to track down and tax money hidden in foreign accounts.
This follows a similar deal signed earlier between German and Swiss authorities. No doubt, this is a landmark achievement. The world has clearly changed as even a few years ago nobody would have anticipated such an agreement to tackle tax evasion. As Mr David Gauke, the Exchequer Secretary to the Treasury in the British Government said: “The historic agreement will enable us to collect billions of pounds from those who have for too long evaded their responsibility to pay tax by abusing Swiss banking secrecy.” For decades, Swiss banking laws have provided complete secrecy to foreign citizens operating bank accounts in that country. Account holders have used that facility to hide money from their own tax authorities without even having to pay any Swiss tax. From 2013 onwards, Swiss authorities will begin to tax British account-holders and directly transfer that money to the British Treasury, but without revealing the identity of the account-holders. The least that the Government of India can do to tackle the menace of black money is to negotiate a similar agreement with the Swiss authorities so that at least a part of our national wealth can be retrieved.
Source: The Pioneer
