Explainer: The Many Corruption Charges Against Lalu Prasad Yadav and His Family

According to the BJP, Lalu Prasad Yadav, Rabri Devi and their children have acquired Rs 950 crore of benaami property over the last decade. Here's a look at some of the specifics.

Lalu Prasad Yadav, Rabri Devi, Tejashwi Yadav and Tej Pratap Yadav. Credit: PTI

Lalu Prasad Yadav, Rabri Devi, Tejashwi Yadav and Tej Pratap Yadav. Credit: PTI

Note: This article was originally published on July 14. It is being republished in light of Nitish Kumar’s resignation as Bihar chief minister over the allegations of corruption against deputy chief minister Tejashwi Yadav, his father RJD chief Lalu Prasad Yadav and others.  

New Delhi: The promptness with which the CBI filed graft charges against Rashtriya Janata Dal (RJD) chief Lalu Prasad Yadav and his associates – including his wife and former chief minister Rabri Devi and his younger son Tejashwi Yadav, currently serving as the deputy chief minister in Bihar – probably made Sushil Kumar Modi, the state BJP chief, a happy man.

For the last three months, Modi has been alleging that the Yadav clan acquired benaami land and properties worth Rs 950 crore over the last decade, a charge Lalu has dismissed many times, though he failed to furnish any credible proof of his innocence. Instead, he claimed that he and his family were being targeted by the BJP because of his fierce opposition to the party’s ‘authoritarian and communal ideology’.

Irrespective of whether this rounding-up of Lalu and his kin is a case of political vendetta, the allegations against the Yadav family have placed Bihar chief minister Nitish Kumar in an embarrassing position.

Although Kumar’s party, Janata Dal (United), has made it clear that the deputy chief minister, Tejashwi, has to come clean on the matter as part of the mahagathbandhan government’s policy of “zero-tolerance attitude towards corruption,” he has conspicuously refrained from speaking on the issue. This has led to speculations on whether Kumar, who recently went against the opposition’s grain by extending his support to NDA presidential candidate Ram Nath Kovind, was rethinking his decision to join hands with the RJD, its primary rival in state politics a few years ago.

At the moment, Lalu is undoubtedly feeling cornered as both friends and foes seem to be keeping a distance, which leaves him no option but to present his defence.

Tej Pratap Yadav. Credit: PTI

Tej Pratap Yadav. Credit: PTI

Allegations against the Yadav clan

Most of the charges against Lalu and his family are either from the time when the RJD chief was the Union railway minister (2004-2009) or when his wife Rabri Devi was the chief minister of Bihar (1997-2005, with brief interruptions). The CBI has filed an FIR on only one such case as of now, which appears to pertain to the biggest allegation against Lalu.

The CBI claims that in a faulty tendering process, Lalu handed over the contract for the maintenance of two railway-run hotels to a private company, in lieu of which his son Tejashwi received ownership of a prime property in Patna.

In 2004, when the Railway Board outsourced the management of catering services and hotels to its subsidiary, the Indian Railways and Tourism Corporation (IRCTC), the agreement allowed IRCTC to invite private companies to take care of the upkeep of its hotels.

In 2006, the contract to manage two railway-run BNR hotels – in Ranchi and Puri – was won by one Sujata Hotels Pvt Ltd.

The CBI has alleged that the directors of the Sujata Hotels, Harsh Kocchar and Vijay Kocchar, allegedly sold three acres of land to a shell company called Delight Marketing – owned by Sarla Gupta who is also the wife of RJD leader and former Union minister of company affairs Prem Chand Gupta – on the day the BNR hotels were transferred to IRCTC in 2005.

The same plot of land, on which Patna’s biggest mall is presently being constructed by RJD MLA Abu Dojana, was transferred to Rabri Devi and Tejashwi by Delight Marketing over a period of four years at a rate much lower than the market price. The upcoming mall does not have environmental clearance, the BJP said.

In what seems like a quid pro quo dealing, the CBI has said that from 2010 onward, Lalu’s family members – Rabri Devi, his sons Tej Pratap and Tejashwi, his daughters Chanda and Ragini – started becoming shareholders of Delight Marketing until 2014, when all of them excluding Rabri Devi became full-fledged directors of the company.

The name of Delight Marketing was changed twice, the CBI alleged. In November 2016, Delight Marketing became LARA (Lalu-Rabri) Projects Pvt. Ltd and then LARA Projects LLP, in which Chanda and Ragini were removed as directors and only the two sons held the mantle. The BJP alleged that both Tejashwi and Tej Pratap have not declared this crucial information in their election affidavits.

The CBI has named eight persons as accused in the case – Lalu, Rabri Devi, Tejashwi, the Kocchar brothers of Sujata Hotels, Sarla Gupta of Delight Marketing, LARA projects LLP and former IRCTC managing director P.K. Goel. It has also conducted search raids in various properties held by the accused persons.

A range of similar allegations 

Tejashwi Yadav. Credit: PTI

Tejashwi Yadav. Credit: PTI

The Bihar unit of the BJP has made several other allegations of illegal acquisition of land against Lalu and his family.

One of these is the alleged Katyal liquor factory scam. The Rabri Devi government permitted one Iceberg Industries Pvt Ltd, owned by Om Prakash Katyal and Amit Katyal, to set up a liquor factory in Bihta, Bihar.

The BJP has alleged that in return for the favour, Amit Katyal and his brother Rajesh Katyal opened a shell company called the AK Infosystems Pvt. Ltd. But in due course of time, the Katyal brothers transferred their company shares to Lalu’s four children, after they were appointed to directorial positions. At present, the BJP alleged, the company is fully owned by Chanda and Ragini as Tejashwi and Tej Pratap gave up their positions after they were appointed to Kumar’s cabinet in 2015.

The BJP said that AK Infosystems owns lands worth crores in and outside Patna.

The BJP has also alleged that another company, called AB Exports Pvt Ltd, wholly-owned by Lalu’s family now, received interest-free loans of Rs 5 crore from five Mumbai-based jewellers in 2007. This amount was allegedly used by AB Exports to buy residential properties worth Rs 55 crore in New Friends Colony and Defence Colony, New Delhi. The company was earlier owned by one Ashok Banthia, who transferred his shares to Tejashwi and Chanda. At present, Tejashwi holds 98% shares in the company while Chanda holds only 2%. Again, the charge against Lalu was that he bought the property at way below its market price, a deal that the five Mumbai-based jewellers struck with him in exchange for an unknown favour.

The BJP has also claimed that the deputy prime minister is the director of one Fairglow holdings Pvt Ltd, which allegedly owns land worth Rs 76.32 lakh acquired at prices much below the market price.

Similarly, the BJP has alleged that Lalu’s family was party to similar land deals each time he used his position to influence appointments. For instance, the BJP said soon after Raghunath Jha became the Union minister of heavy industries and public enterprise in the UPA-I regime, he gifted “six kattha” of land near a national highway and a three-storied building to Tejashwi and Tej Pratap. It also alleged that RJD leader Kanti Singh leased out 95 decimal land to Lalu when she became a Union minister of tourism and culture in 2004.

The BJP has also presented many other such land agreements which show that Rabri Devi received various plots of land at throw-away prices from politically-influential people in Bihar. The party also said that Rabri Devi used her position to allot to herself and Lalu at least five houses under the MLA cooperative scheme, which allows for only one plot per legislator.

In a bizarre allegation, Modi, at a press conference, presented papers that show that Rabri Devi’s cattle-shed owner Lalan Choudhary gifted her a property worth Rs 31 lakh in 2009. Rabri Devi has refuted the claim and said that Choudhary gave her the land as she had been helping him monetarily for many years.

The BJP also presented papers that show that a grade-4 employee of the railways gave away his land worth Rs 70 lakh as gift to Hema Yadav, daughter of Lalu and Rabri Devi.

The saffron party made a similar allegation against Lalu’s eldest daughter Misa Bharati. A shell company, KHK holdings formed by one Vivek Nagpal, bought land worth crores in Delhi. Later Nagpal transferred his shares to Bharati in 1998, following which she became the biggest shareholder in the company. The BJP said that Lalu routed his illegally-acquired wealth into this company, exactly in the way a hawala deal happens.

Lalu Prasad Yadav and Misa Bharti. Credit: PTI

Lalu Prasad Yadav and Misa Bharti. Credit: PTI

In another claim made by the BJP, one of the chartered accountants who used to work for Bharati, when arrested, told the police that Lalu as the railway minister used hawala brokers Virendra Jain and Surendra Jain (who have now been accused of laundering Rs 8,000 crore in hawala) to route Rs 60 lakh of benaami money to another one of Bharati’s companies called Mishail Packers Pvt. Ltd. In what is essentially an allegation of round-tripping of black money, the BJP alleged that a defunct Mishail Packers Pvt Ltd used the Jain brothers to sell its share worth Rs 10 at Rs 100. The income was used to buy a farmhouse in Bijwasan, New Delhi. Eleven months later, the same shares were bought back by Mishail Packers at Rs 100 per share.

Allegations against Tej Pratap  

The BJP also made serious allegations against Tej Pratap, also a cabinet minister in the Bihar government. It has said that Tej Pratap, also a director of LARA Projects, received 45 decimal of prime land for a meagre Rs 54.34 lakh in 2005. This land was mortgaged to South Bihar Grameen Bank in 2012, in return of which Tej Pratap got a loan amount of Rs 2.29 crore.

The BJP said that he did not disclose this fact in his election affidavit.

In another charge, the BJP said that Tej Pratap illegally got a petrol pump allotted under the name of Lara Automobiles Pvt Ltd. without following the required norms. Bharat Petroleum has also asked Tej Pratap for clarifications. The BJP alleged that Tej Pratap got the license without possessing the land at the time of application. The land was later acquired by him by force, the BJP said.

The accusations against Lalu and his family show a similar pattern. At least five shell companies have been allegedly used to indirectly transfer ownership to Lalu’s kin in exchange for favours to various businessmen.

Riding on the CBI action, the BJP appears to be confident in shifting the political narrative in its favour. It has gone to the extent of branding Lalu as the “Robert Vadra of Bihar” and has been running a campaign with the slogan “Tum mujhe zameen do, main tumhara kaam karoonga (You give me land, I will get your work done)”.

Many independent observers have said that the scale of the scam as alleged by the BJP may be exaggerated, but Lalu may still have to come up with a valid explanation.

Welcoming the CBI’s quick action, many of them said that it has to now prove that it is not a “caged parrot” – a term the BJP had given to the chief investigative body during UPA’s rule. “CBI’s alacrity in probing the charges is welcome but its neutrality can only then be ascertained when it shows similar promptness in investigating similar charges against BJP’s political figures,” said Aryama, a political scientist based out of New Delhi.

Former Gujarat chief minister Anandiben Patel is in a similar embarrassing situation. Her daughter Anar Patel has been accused of acquiring 422 acres of land from the state government in 2010 at Rs 15 per square metre. A report said that this was a huge 91.6% discount to the government’s rate of Rs 180 per square metre.

It has been seen many times that political leaders, cutting across parties, who preach abstinence as a virtue have been found to have disproportionate and unaccountable incomes and properties. While the CBI has a task at hand, the Union government too will now have to prove that it has the intent to hold not only its detractors accountable but also its supporters.