Hyderabad, July 12
India’s richest MP, YS Jagan Mohan Reddy, today suffered a major setback with the Andhra Pradesh High Court directing the CBI to conduct a preliminary inquiry into the allegations of disproportionate assets and dubious business deals against him.

The court issued the order based on a letter written by senior Congress leader and state’s Handlooms and Textiles Minister Dr P Shankar Rao, alleging that Jagan had amassed huge wealth by misusing power when his father late YS Rajasekhar Reddy was the Chief Minister during 2004-09.

The Division Bench, comprising Chief Justice Nisar Ahmed Kakru and Vilas V Afzalpurkar, directed the CBI to complete the probe within two weeks and submit the report to the court in a sealed cover. The final hearing would take place after the submission of the CBI report. The court felt that prima facie inquiry was necessary to clear the doubts.

Shankar Rao had written a letter to the High Court in January this year, seeking CBI inquiry into the alleged ‘ill-gotten’ wealth of Jagan. As per the latest Lok Sabha records, Jagan, the 38 year old industrialist-turned-politician, is the richest MP with declared assets of Rs 365.68 crore. In an affidavit submitted before the Election Commission in April this year, he had declared that he owned assets worth Rs 365.68 crore while his wife Y Bharathi had assets worth Rs 41.44 crore.

The court-ordered CBI probe is bound to have a huge impact on the state politics as both the ruling Congress and the main Opposition, the Telugu Desam Party, have been consistently targeting the Kadapa MP for his “corrupt business practices.”

“We have always maintained that Jagan has looted the public wealth. We have all the evidence to prove this and will submit them to the CBI if asked,” State Medical and Health Minister Dr DL Ravindra Reddy said.

State Congress president B Satyanarayana said it was for Jagan to prove his innocence. “The law will take its own course,” said Satyanarayana, who was once considered a close confidant of YSR. In his letter to the court, Shankar Rao had sought Jagan’s prosecution under Sections 8, 9 and 13 of Anti-corruption Act and confiscation of his properties pending an inquiry by CBI. In his returns for 2003-04, Jagan had claimed that he owned properties worth Rs 36.53 lakh but the following year his assets rose to Rs 6.64 crore, he alleged. Since then, the young leader went on a spree of floating new companies, the letter claimed. In 2004 alone, Jagan floated 36 companies and indulged in serious crimes like money laundering. Based on the Minister’s letter, the HC had issued notices to Jagan and 56 others in January this year, asking them to show cause why it should not order a CBI inquiry into the investments made in his companies by various industrialists. Jagan’s counsel had, however, argued that the allegations were politically motivated.