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What is said and what is not, about the IT Raids on Infra Companies and Ex. PS to AP CM

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During February 6-14, 2020, various media outlets, both vernacular and national, have reported the IT raids conducted at the residence of P. Srinivasa Rao, Ex-Personal Secretary to the former Chief Minister Chandrababu Naidu during his 2014-19 tenure.  India Today prominently claimed the raids to have unearthed Rs. 2000 crore fraud and various reports including Deccan Chronicle mentioned Srinivas Rao as the centre of the raids while mentioning ‘three other infra companies’ were also being raided by the IT department. 

With the name of veteran leader Chandrababu Naidu floating atop, the news went viral on social media and made headlines in both print and electronic media for the whole week. While the opposition made allegations of corruption and conspiracy theorists have stressed on the involvement of TDP leaders, the party has widely condemned the reports, here are the facts about how the IT raids were conducted and what they actually revealed.

On February 6, 2020 the officials from Department of Revenue, Central Board of Direct Taxes (CBDT) from Delhi arrived in Andhra Pradesh and Telangana. What followed is revealed below.

What does the official statement say?

The official release from the department on February 13, 2020 says the officials carried out search and seizure action across Hyderabad, Vijayawada, Cuddapah, Visakhapatnam, Delhi and Pune, in more than 40 premises. The statement does not reveal any direct names, of persons or companies, but goes on to say ‘the action included three prominent infrastructure groups based in Andhra Pradesh and Telangana… search operations was also carried out on close associates including ex-personal secretary of a prominent person and incriminating evidence’, the prominent personality referred to is Nara Chandrababu Naidu and his ex-personal secretary being P. Srinivasa Rao.

The statement also suggests a “preliminary estimate of siphoning of more than Rs. 2000 crore through transactions that were layered through with the last in the chain being entities with turnover less than Rs. 2 crore to avoid maintenance of books of accounts and tax audits etc. Such entities were either not found at their registered addresses or were found to be shallow entities.”

The officials are said to have found “unexplained cash of Rs. 85 lakh and jewellery worth Rs. 71 lakh” and had restrained 25 bank lockers. 

What the official statement does not say?

The statement does not mention the names of persons or companies who were raided, other than making a reference to Pendyala Srinivasa Rao. It is a collective statement on the raids that took place across 40 different premises belonging to various parties. While the popular narrative has framed Pendyala Srinivas Rao in a negative light associating him with the “unexplained cash of Rs. 85 lakh and jewellery worth Rs. 71 lakh”, the receipt inventory of cash found/seized signed by the IT officials after the raid at Srinivasa Rao’s residence shows only Rs. 2,63, 000. The cash currency here is indicative of the liquid cash seized on the day and does not necessarily indicate illegal money, the party involved can reclaim the money on producing the documentary proofs accounting for the money. 

Two of the three companies raided RK Infracorp Private Limited and Avexa Corporation Private Limited are also known to have been associated with the Telugu Desam Party leaders. While RK Infracorp Private Limited is owned by Cuddapah Telugu Desam Party leader Srinivas Reddy, Avexa Corporation is headed by Prattipati Sarath, son of former minister Prattipati Pullarao. 

 

On the other hand, raids were also conducted on Telangana Rashtra Samithi (TRS) leader Boinapally Vinod Kumar’s brother Boinapally Srinivasa Rao’s properties. The details of the raids conducted in Pune and Delhi remain completely unknown, leaving much room for inconsistency and speculation over the plausible link between these raids. 

IT Raids, Political Narrative and Media Trials:

Financial crimes are often backed by politicians, hence making it easy for the conspiracy theorists and media to find quick links between IT raids and political entities. But the inconsistencies leave them bare open. The statement by the IT officials has less to offer in terms of concrete evidence to raise questions against any of the accused. The TDP leadership has raised questions on a statement that relies on the ‘loose papers, emails and WhatsApp messages’ without any specific details. In the follow up, the CBDT has failed to convey if any charges were filed on the basis of these raids. If not, how different are they from the regular audits by the department?

The centre of the controversy, Pendyala Srinivasa Rao has been an employee of the government of Andhra Pradesh for the last two and half decades and was relieved from his recent position as Personal Secretary to the CM just 9 month back. He maintains that his association with Chandrababu Naidu was strictly professional. On having a first look, it appears that the raids were politically motivated and might be related to Jagan Mohan Reddy’s agenda of vendetta politics.

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