With the arrest of Kadapa MP Jaganmohan Reddy in connection with illegal assets case, everyone is getting to know the allegations of illegal assets that Jagan was holding. But then many of them don’t know that he came under the scanner of the income tax department in 2010 itself.
What made IT department suspect?
The income tax department was reportedly astonished when it came to know that Jagan and his associates had 90 per cent of equity whereas they contributed for 20 per cent of the share capital. Also, the remaining investors who enjoyed 10 per cent equity were the ones who contributed 80 per cent of share capital.
Discoveries of income tax department:
Income tax sleuths found out that there was cut throat competition in the media industry especially in Andhra Pradesh. But a couple of people went ahead and invested in Sakshi media group despite knowing the fact that the newspaper was running in losses. The IT department officials have also discovered that all the investors in Sakshi media group were top industrialists and they knew in an out of businesses. So, the officials held that they business magnates wouldn’t be so foolish to invest in a company that reflects no scope for profits to them even in future. Above all, none of the investors were linked with media businesses.
The IT sleuths have also said that Jagan allotted shared at par value while the outside shareholders were allotted equity at a premium of Rs. 350 per share. They have even discovered that there were even some share holding companies that were very micro and some of them couldn’t be traced. They even realized that there was nothing like public listing of Jagati Publications as such. Hence, investors couldn’t expect any hike in shares of the company in the market.
Finally, the income tax department officials came to conclusion that the investors in Jagan’s companies were actually promoters and they charged Rs. 122 crore on Jagati Publications. Therefore, Jagan facing such a situation is nothing new as earlier income tax department looked into his assets.