May 25, 2020
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The Skeletons Tumble Out

The charges are piling up against Jayalalitha and Sasikala, but can investigators make them stick?

The Skeletons Tumble Out
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IN terms of sheer scale and magnitude, 'evidence' of corruption during the five years of AIADMK governance is coming as a shock to those going through the files at Fort St George. It is being described by the new DMK government as a well-planned effort to 'loot' public money, as the regime of former chief minister Jayalalitha is being charged with not having shown any qualms in cashing in on anything from road construction contracts and welfare schemes to sandalwood auctions. And though the DMK has promised to bring the guilty to book, according to a senior police official, it may find it practically impossible to look into all the excesses.

The cases are piling up against Jayalalitha and although the vigilance branch of the state police has been directed by Principal Sessions judge A. Ramamurthy to enquire into the assets of the former chief minister, police officials agree that there already exists sufficient information—collected by Jayalalitha's political rivals—which could be damaging. Janata Party leader Subramanian Swamy, who has been crusading against the former chief minister, has been responsible for ferreting out documents which may go against Jayalalitha. Various shades of politicians, including former TNCC president K. Ramamurthy, have also been submitting dossiers to the governor detailing instances of corruption.

At the moment, the focus is on exposing the Jayalalitha-Sasikala Natarajan axis and also to set right systems established by the AIADMK government which encouraged corruption. The DMK Government has already discontinued the controversial 'single tender' system of the Jayalalitha era. According to a senior PWD official, the single tender system virtually legitimised corruption. Under this tender, forms were given to one bidder or a restricted group of bidders. This led to much corruption as the chosen bidders were more often than not favourites of people in the government. The DMK Government has issued a warning to all government officials that those continuing with the single tender system would be severely punished. The proposals of all bidders are to be entertained and contracts awarded on merit.

State Transport Minister K. Ponmudi, who has been going through the files of his predecessor, talks of the number of road construction contracts that were awarded at highly inflated rates. Thus, at the time of the World Tamil Conference last year, a contract to lay a 5.4 km stretch of road was awarded on a single tender basis to a Bombay-based engineering company for Rs 9.14 crore when the estimated cost was only Rs 5.26 crore. He alleges a politician-bureaucrat nexus in the deal and points out that this is not an isolated case.

While such deals do not involve the former chief minister or Sasikala and her relatives directly, officials point out that detailed investigations have to be conducted to unearth links. Ministers who served in the AIADMK ministry point out that practically every deal involved the former chief minister or the coterie around her. Besides, Jayalalitha made herself, by a government order, the sole authority to clear any contract above Rs 1 crore and, therefore, according to police officials, could be held responsible as the contracts were awarded with her full knowledge.

The extent of corruption can be gauged from the fact that 788 tonnes of sandalwood auctioned in 1994 fetched the government only Rs 18 crore while an almost equal quantum of the timber fetched Rs 40 crore when auctioned last month. This despite the fact that the price of sandalwood has remained unchanged. Chief Minister K. Karunanidhi has charged the AIADMK government with 'open swindling'.

Among the charges of corruption which could be damaging to Jayalalitha are:

The Jaya Publications Scam: This is perhaps the most embarrassing case as far as Jayalalitha is concerned. Not only do the partnership deeds of Jaya Publications establish her links with Sasikala, there are documents to establish that she continued to be a partner even after she became chief minister. The registered address of the company was the chief minister's residence and the partners were Sasikala and her husband M. Natarajan. Jaya Publications made news after it was revealed in the press that a three-acre plot with a building and machinery with a guideline value of Rs 4,98,72,120 was sold by the Tamil Nadu Small Industries Corporation to the then chief minister's company at a throwaway price of Rs 1.82 crore. Moreover, the sub-registrar did not insist on even the stamp duty of Rs 33,22,000. Jaya Publications also cornered many of the contracts from the state-owned Tamil Nadu Text Book Society. The society awarded contracts worth Rs 94 lakh to the company, which on the strength of its partner being the chief minister found it easy to access loans. Thus, the Kellys branch of Canara Bank in suburban Madras gave a loan of Rs 17 lakh against immovable property said to have been owned by M. Natarajan. The property—situated on Beemanna Garden Street, Mylapore, Madras—was allotted to M. Natarajan by the accommodation controller when he was a government servant.

The Coal Deal: Two Madras-based companies—Alagendran Brothers International and South India Corporation, neither of which have a history of dealing in coal, were contracted to import 4.45 tonnes and 6.80 tonnes of coal respectively. Objections to awarding the contracts were made by V. Sundaram, secretary to the government in the PWD, but were overruled by the then chief minister who approved the deal on July 10, 1993. Coal of an inferior quality was imported at an inflated price. The kickback allegedly involved Rs 31 crore. The coal deal has been documented by Opposition parties, with evidence at practically every stage.

The SPIC Disinvestment and the Chandralekha Case: The CAG report of 1994 was severely critical of the manner in which the Tamil Nadu Industrial Development Corporation (TIDCO) deliberately dis-invested its shares in Southern Petrochemical Industries Ltd (SPIC), virtually gifting control of the company to industrialist A.C. Muthiah. The then chief executive of TIDCO, Chandralekha, had strongly opposed the deal and this angered the powers-that-be. Acid was thrown on her by hired gang members from Bombay. The case is being investigated and the gang members have named an AIADMK minister as the person who had hired them. Chandralekha has since quit the IAS and joined the Janata Party.

There are also a host of smaller cases, including the recognition of 176 teachers training institutes in 1992, in which a total amount of Rs 10 crore was allegedly collected as bribes. The logic of opening teachers training schools in a state where there was already a surplus of such institutions was questioned by the high court. Many of the institutes existed only on paper.

The allegations of corruption range from the supply of sodium vapour lamps to medicines. Former AIADMK men explain how the system worked: there were middlemen who were to be contacted in practically every deal and since contracts above one crore had to get the then chief minister's okay, it was widely believed that a word put in by Sasikala would help. The cut demanded for every business deal was upwards of 15 per cent of the total project cost. A senior retired police official, now a business consultant, talks about how many business deals failed because his foreign clients were not prepared to pay such hefty commissions.

Contrary to popular notions, AIADMK insiders reveal that Sasikala's husband M. Natarajan was very much a part of the inner circle and played a key role. It is another matter that Jayalalitha occasionally lashes out at him through statements made in the media. For, Natarajan did help out with most of the major projects in which his wife was involved. He was also able to influence government decisions and is said to have been much sought after for fixing transfers and promotions.

The Enforcement Directorate (ED) is investigating Sasikala, who is now under arrest, in two separate cases involving FERA violations. One involves payments amounting to $6.80 lakh made in the Philippines for JJ TV, of which Sasikala was the chairperson. In addition to this, 3.36 lakh Singapore dollars were paid to suppliers of television equipment in Singapore on her directions. According to sources in the ED, during her interrogation Sasikala confessed to these payments, which were apparently made in 1995 through a family friend.

The other case involves a Rs 3.29 crore remittance made by P. Suseela of Pennang, Malaysia, under the non-resident non-repatriable (NR-NR) deposit scheme in the Abhiramapuram branch of Indian Bank in Madras. A Rs 3-crore loan was sanctioned against this deposit to Bharani Beach Resorts Pvt Ltd which in turn loaned the money to ten companies in finance and construction owned by Sasikala. These companies lent Rs 2.20 crore to Sasikala, who used the funds to make the part payment for a tea estate brought at Kothagiri in the Nilgiris. According to ED officials, they have every reason to believe that the money transferred was Sasikala's and that Suseela was just a front.

In both the cases ED officials claim they have clinching evidence. But the sudden transfer orders on June 26 of all the key officials investigating Sasikala as well as her nephew Dinakaran have spread panic in the ED. While the transfers have been described as routine, there are fears that it may hamper the investigations. At any rate, ED officials point out that when a new set of officials take over a case more time is required to get a grip on the case and this may slow down investigations.

Jayalalitha has reportedly tried to account for her source of income from 1990 to 1993 as gifts received from well-wishers. Thus, in the four-year period she claims she received gifts worth Rs 4 crore. The gifts were given in cash as well as in kind. There have been demands that the income tax department should also look into the source of the Rs 76 lakh that the former chief minister disclosed under the voluntary declaration scheme of the Central Government.

Many of the investigations into huge tracts of land allegedly bought by Sasikala and her relatives may not be taken up because some of the transactions were made under benami names and it may be difficult to establish direct links in a court of law. According to a senior police officer, much of the information has to be sifted and only those cases where strong evidence is available will be pursued.

How vigorously the DMK Government will pursue all the cases remains to be seen. Its party leadership has made it clear that the guilty will not be allowed to go scot-free. The new chief minister has also been very particular in seeing to it that his Government's deals are transparent. The last time that the DMK was in power, there were allegations of corruption against it. This, time around it's likely that a chastened breed of politicians may learn that all of the people can't be fooled all the time.

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