States: Andhra Pradesh: Hot On Naidu's Trail

In questioning the CM's acquisition of huge assets, the Congress digs up a fresh issue to fight the TDP in an election year.

Undeterred: Naidu and Bhuvaneswari have dismissed the charges as wild and baseless

The run-up to any election is never without its share of gimmicks and high drama; of charges and counter charges flying thick between parties and politicians. In Andhra Pradesh, the assembly elections may be nine months away but the game of one-upmanship seems to have already begun.

It's a battle between the indefatigable Chief Minister N. Chandrababu Naidu and state Congress President Y.S. Rajasekhar Reddy. The flashpoint was an open letter written by Reddy to Naidu last week, accusing him and his wife Bhuvaneswari of acquiring assets disproportionate to their known sources of income. No sooner had the charges been made than Naidu rubbished them saying, "Reddy may some day say that the Charminar and the Golconda Fort also belong to me." Pointing out that it was a desperate attempt by the Congress to tarnish his "impeccable" image in an election year, he said he was even contemplating suing Reddy.

CONTENTIOUS CHARGES

Reddy has challenged Naidu to explain how he acquired the following properties.

The HFL complex

HERITAGE FOODS (INDIA) LTD: The milk-processing company promoted by the Naidus was set up in 1992. With a turnover of Rs 67 crore, it has a plush corporate office at Punjagutta. Current value: Rs 2 crore.
MADHAPUR PLOTS: Covering a total area of 3.5 acres, these plots were bought by HFL for Rs 16 lakh in 1995. There are seven sale deeds in the name of Bhuvaneswari and some business associates. Current value: Rs 3.40 crore.
BANJARA HILLS PROPERTY: Initially given to HUDA to develop a commercial complex, this government land, spread over an acre, was transferred on April 30, 1997 to the NTR Memorial Trust of which Naidu is chairman. Current value: Rs 5 crore.
KONDAPUR FARM: A three-acre farm owned by the Naidus was bought in 1989 for Rs 1 lakh. Present value: Rs 3 crore.

The Congress leader, however, claims to have "revealing" details about the acquisitions and is challenging Naidu to disprove them or haul him to court. "If he fails to do so, it is a virtual admission of guilt," he argues. He is citing documents of various properties owned by the Naidus and affidavits submitted by them to courts and income-tax authorities to adduce evidence for his charges. According to these documents, Naidu told the Andhra Pradesh High Court in 1988 that his only income, amounting to Rs 36,000 a year, was from agriculture. In an affidavit, he stated that he was a poor groundnut farmer having "less than average middle-class income". Further, a declaration made by Bhuvaneswari under the Voluntary Disclosure Scheme said she owned only 357 gm of jewellery, 8 kg of silver and Rs 49,700 in cash. "With such resources, how is it possible to create huge assets?" asks Reddy, listing their acquisitions, including a family-owned milk-processing company, Heritage Foods (India) Ltd (HFL) launched in 1992.

With a turnover of Rs 67 crore, the company, in which the Naidus hold a 37 per cent stake, recorded a profit of Rs 3.04 crore last year, up from Rs 2.41 crore in 1996-97. Financial results for the first nine months of this year shows a profit of Rs 4.36 crore. HFL's corporate office is lodged in a plush three-storey building, owned by Bhuvaneswari, at Punjagutta in the heart of Hyderabad. Reddy's contention is that the company had been acquiring property and doubling its profit at a time when the dairy industry in general was running losses. "What is wrong with that?" asks V. Nagaraja Naidu, director, HFL. "We are market leaders in the south with no shady operations and are unfortunately being dragged into politics."

Next on Reddy's list is a farm owned by the chief minister's family. In 1989, the Naidus bought three acres of land at Kondapur on the outskirts of Hyderabad to develop the farm. "It is the interest in naturopathy to treat a skin problem and grow vegetables that made Naidu buy the farm," offers a family friend in defence. Close to it, Bhuvaneswari and her business associates together bought 3.5 acres of land, split into seven plots, ostensibly to avoid heavy taxes and stamp duty for HFL. Their plan is to start a packaging unit of the company here.

That the issue has given the Congress and the TDP fresh ground to fight about is clear. The state Congress chief's charges apart, Congress Legislature Party leader P. Janardhan Reddy has filed a special leave petition against Naidu in the Supreme Court that is likely to be considered this month. The petition questions Naidu's decision to give nearly an acre of government land to the NTR Memorial Trust in the upmarket Banjara Hills. The land, initially given to the Hyderabad Urban Development Authority for putting up a commercial complex, was taken back by the Government and Naidu, as chief minister, gave it to the trust of which he is chairman. Sources close to the chief minister maintain that the trust -- which has a chartered accountant and a personal assistant as trustees besides Naidu -- needed a place to function from and "relentlessly work towards achieving NTR's goals"

Dismissing the view that these charges were part of an election-year campaign to malign Naidu, Reddy says he is merely taking up Naidu's challenge to the Congress for a public debate on this issue. But according to a senior TDP leader, the Congress game plan, is to try and browbeat Naidu using the familiar corruption plank. It had used this strategy effectively against the TDP in the '80s when party MP Dronamraju Sataynarayana filed a petition in the state high court listing over 100 charges against NTR. The court found prima facie evidence of abuse of power by NTR and the Congress exploited it as an election issue even before the Supreme Court, which NTR had subsequently moved, could consider the case. The strategy worked, enabling the Congress to stage a comeback in the state in 1989.

This time, however, it may not be that easy. The rivalry between Reddy and Naidu, both of whom were first elected MLAs in 1978, is well known and many see the Congressman's tirade as a personal attack on Naidu. When Reddy became the state Congress chief, some TDP activists, reportedly at the behest of Naidu, accused him of being a criminal. "Let them take action if there is anything," says Reddy, dismissing the 22 pending criminal cases against him as "minor poll-related offences".

Naidu on his part is banking upon his development initiatives to get public backing. He believes Reddy's charges cannot be used to discount the "significant" work done by his ministries. That is something which will be decided only by the electorate in December.