Fodder For Thought: Allegations Against Lalu Parivar, Explained

Several allegations have been levelled against the embattled Rashtriya Janata Dal (RJD) supremo Lalu Prasad Yadav and his son and Bihar’s Deputy Chief Minister, Tejashwi Yadav. These claims range from non-declaration of shareholdings to benami deals, and to money laundering by the latter through “shell companies”.

The tax raids that took place yesterday (16 May) in Delhi were to probe alleged benami deals worth Rs 1,000 crore linked to Lalu and other RJD leaders, and the locations were all connected with AB Exports Ltd., allegedly a “shell company” associated with Tejashwi.

The expose by CNN-News 18 yesterday (16 May) revealed that Tejashwi and his sister Chanda Yadav are the only shareholders in the company, with the former holding 98.2 per cent of the shares and the latter, 1.8 per cent. The company has no business activity and no employees.

In 2009, however, the company raised Rs 5 crore by way of optional fully convertible debentures, the subscribers being a host of Mumbai-based jewellery firms. The shareholding of AB Exports was transferred from Ashok Kumar Banthia to Tejashwi in 2010, following the purchase of a property at New Friends Colony in New Delhi, the location of the recent raids.

The other "shell company" exposed by CNN-News 18, Fairgrow Holdings Pvt. Ltd., in which Tejashwi is both director and shareholder, apart from having benami shareholders, is registered in Kolkata but has no functional office at the registered address. Other corporate shareholders in the firm, namely Flamingo Trade Services (P) Ltd. and Laurel Real Estate Pvt. Ltd., were also using non-existent addresses.

But neither companies find a mention in the election affidavits filed by Tejashwi for the 2015 Bihar assembly elections.

While it is only after the recent Lalu-Shahabuddin expose by Republic TV that the nefarious activities of the Yadav family have once again gained media glare, senior Bihar BJP leader Sushil Kumar Modi has been pursuing the case of the Lalu clan for quite some time, alleging complicity and direct participation of the said members of the Yadav family in various benami deals and money-laundering schemes.

The first of these allegations was filed on 4 April, when Sushil demanded a probe into the irregularities in purchase of soil for the beautification of Patna Zoo. He alleged that soil worth Rs 90 lakh (which was generated to create a basement for a mall in Patna’s Bailey Road) was lifted from a property owned by Tej Pratap and Tejashwi and was purchased by the zoo without floating any tender.

Even before the channel’s expose, Sushil had alleged that AB Exports Ltd. was a “front company” floated to acquire prime residential land. An expose by Times Now on 11 May revealed that Misa Bharati and her husband Shailesh Kumar used KHK Holdings as a "front company" to buy a 2.8 acre farmhouse at Sainik Farms in New Delhi. The company was transferred to the said couple by Vivek Nagpal, an operator in Delhi’s political and business circles for a mere Rs 1 lakh, according to the expose.

Sushil targeted Misa Bharati on 13 May, further alleging her of converting black money to white through her company, Mishail Packers and Printers Pvt. Ltd., which was registered in 2002 at Lalu’s then official bungalow on Tughlaq Road in New Delhi.

He also alleged, backed by relevant documents, that Bharati first sold the shares of her company of a face value of Rs 10 each to Virendra Jain's Shalini Holdings at Rs 100 per share in October 2008. Eleven months later, she bought back all the shares at the rate of Rs 10 per share from Shalini Holdings.

Ten days ago, the Supreme Court set aside a Jharkhand High Court order and ruled that Lalu will face trial in all the cases linked to the Rs 1,000 crore fodder scam.

Facing a number of allegations and with the recent judicial setback to the Lalu parivar, the mahagathbandhan in Bihar will be put to the test, as this means not just loss of credibility but also a loss of face for Nitish Kumar as “Mr Clean”.