Waiting to Explode HDK Exposes Yedurappa’s another Scam probe dangerous for BJP

Firoz.T.Totanawala

The Bangalore Metro Reporter

1st July 2011 issue-                                   

                                       Waiting to Explode

HDK Exposes Yedurappa’s another Scam probe dangerous for BJP

For ordinary people, the recent expose by HD Kumaraswamy against the Chief Minister B.S Yeddyurappa is a damp squib. But if one ponders deeply, it will be a real bomb waiting to explode. Kumaraswamy’s exposure is a well calculated move and it will have a serious repercussion on the national leadership of the BJP.

If one reads between the lines and words of Kumaraswamy’s exposure and the documents released, one can dare say that there is a similar pattern in Ratna scam compared to other scams of Yedurappa and family, where ‘deal’ money was deposited in firms floated by them, in white. And there ends the similarities.

In case of acquisition of Ratna Cements, Yedurappa had adopted a round about approached to prevent the needle of suspicion pointing towards him. Yedurappa (meaning his kith and kin also) acquired a little known Finance Company- Indivar Kutir in Kolkata and waived off the interest of for 7.5 crores before acquisition and allowed it to pay the principal of 4 crores loan. This principal amount was paid by former Minister Katta Subramanya Naidu’s son-in-law to the KSSIDC, from where the company had raised the loan few years back.

Yedurappa took over the Indivar Kutir by investing around 3.70 lakhs through his daughter- in- law and one of his firms Bhagat Homes which later acquired the controlling stakes in the Ratna Cements and settled its other loan liabilities to the tune of more than 80 crores. The company was then given mining license over an extent of 1400 acres despite opposition from the revenue authorities. This is mere gist and essence of Ratna Cement scam.

After the exposure, Kumaraswamy has demanded that inflow and outflow of money to the Indivar Kuteer Company be probed by the central agencies. This demand is the real bombshell. In fact, it is widely rumoured even before the exposure by Kumaraswamy that Yedurappa was ‘donating’ liberally to some of the top BJP leaders, through a company situated outside the state to avoid any detection and subsequent embarrassment to the BJP High Command. It is no secret that Yedurappa had to keep some powerful leaders in the High Command in good humour, to protect his CM guddi, which is always under threat, sometimes from his own party leaders or opposition. The liberal donations, mostly in terms of crores will have the required result.

Nobody knows the net value of this finance company. While the net value of the Indiver Kuteer was shown as 6 crores, Yedurappa had acquired the same for 75 lakhs! Interestingly, this company has not filed its financial statements for the last two years that is after Yedurappa acquired the same.

It is here the scam becomes intriguing. Indivar Kuteer, after it came into the hands of Yedurappa, for a throw away price, later had paid more than 80 crores for acquisition of Ratna Cements and clearing its outstanding loans to the tune of more than 75 crores!

How could a finance company whose net value is less than six crores be sold to Yedurappa for a mere 75 lakhs? Either it should be a sick company or its value was inflated. This implies that Yedurappa had acquired the company by paying through black money and by showing white money of 75 lakhs for purchase of its share.

Assuming that Yedurappa had acquired the company only for 75 lakhs, how one could imagine this ‘sick’ company mobilizing more than 80 crores to acquire the share of Ratna Cements and settling its outstanding loans? This is highly impossible. One can safely come to the conclusion that the sudden turn around of the company was due to pumping of crore of rupees by Yedurappa. If the affairs of this company is as white as show, as is being made out, why it had not submitted its financial statements for the last two years? And here is the catch. Kumaraswamy has indirectly alleged that Yedurappa had made huge payments to some of the BJP leaders from this company. It is another matter that Kumaraswamy must have the details of such payments. But he has chosen not to reveal such details and preferred the central government holding a probe. In a way he has given an ammunition to the central government to expose the BJP leaders who are the recipients of Yedurappa’s largesse.

Of course, it is very easy for the central government to conduct the probe into the Indivar Kuteer as it is a NBFC (Non Banking Finance Companies). It is mandatory for the NBFCs to file their financial statements with the government and the RBI has full powers to control their activities. RBI can straightaway take up the probe for the mere charge of the finance company not filing its financial statements for the last two years. This is as simple as that. Once a probe is ordered, one can be sure of skeletons in the cupboards of this ‘wonder’ company starts tumbling out. The outflow of money to various channels including payments will start coming out and so are the inflow of money to the company and the sources of such inflow. In that event, the nation will witness an unprecedented scam and put the BJP’s national leadership to shame. May be it is for this purpose that Kumaraswamy has choosen not to reveal the names!

Forget about everything. It is interesting that Yedurappa had choosen to acquire a ‘sick’ finance company in West Bengal. He could have very well floated a NBFC in the state itself. Why he chose the Kolkata firm remains a mystery. Yedurappa could have registered the NBFC in Shimoga itself even with a meagre share of 2 to 5 lakhs instead of paying 75 lakhs to Indivar Kuteer. Here lies the secret. If funds are routed through this Kolkatta firm for acquisition of Ratna Cements or paying ‘donations’ to BJP leaders then nobody will have any suspicion. This highly intelligent move by Yedurappa has backfired on him after Kumaraswamy exposed the scam. Occupying centre stage in national politics particularly so when the BJP is undertaking national movement to fight corruption.