AIADMK supremo Jayalalithaa and her associates used a string of shell companies to screen “shoddy and murky” deals that were clinched through illegal income from her tenure as Tamil Nadu Chief Minister between 1991 and 1996, the court verdict against them has said.
Analysing the functioning of these companies and their properties, the trial court also held that the prosecution had proved beyond reasonable doubt that the intention of A2 to A4 (V.K. Sasikala, V.N. Sudhakaran and J. Elavarasi) was “to acquire and hold the properties for and on behalf of A1 (Jayalalithaa).”
According to details of the judgment accessed by The Hindu, the co-accused in the case, mainly Mr. Sudhakaran and Ms. Elavarasi, joined six different companies — Lex Properties Development, Meadow Agro Farms, Riverway Agro Products, Ramaraj Agro Mills, Singora Business Enterprises and Indo Doha Chemicals and Pharmaceuticals — between 1991 and 1996.
Some of these companies, in turn, entered into partnerships with other firms in which the accused were again partners.
Though the companies were in existence before 1991, the judge says their bank accounts were opened only after the accused joined them and took control of the management. “All the transactions relating to these companies are stated to have taken place through these accounts,” trial judge John Michael Cunha has said.
However, the 18 firms, including the partnerships, which came into existence during 1991-96, did not carry out any substantial business during the period. But, large properties, including several land holdings, were acquired in the name of these companies.
A perusal of the banking transactions showed that the money used for acquiring the properties flowed from the accounts of Jaya Publications in which Ms. Jayalalithaa was a partner.
The defence was that the money used to acquire the properties were mainly from the other three accused and that Ms. Jayalalithaa had no knowledge of these transactions. The judge, however, said it could not be believed that being the Chief Minister of a State, she was unaware of the large-scale activities carried on by persons living in her own house (Poes Garden).
“It is proved in evidence that substantial funds accumulated by A1 were credited to the account of Jaya Publications and from the said account it was diverted to the other accounts [of the companies] and ultimately was utilised for acquisition of huge assets,” the judgment says.
Also, the judge, delving into the background of the individuals, says the other three accused on their own did not have any substantial income to acquire such huge properties.
Dismissing the defence that the court had to make a distinction between the companies, which were legal entities on their own, and the individuals, the judge said the “illegally amassed wealth, running to nearly 3000 acres of land, is parked in these shell companies obviously for the reason that this arrangement provides convenient leeway to enjoy and deal with the properties registered in the name of the companies and even dispose them of merely by passing a resolution.”
In fact, the companies had no auditors of their own. Instead, the auditors of A1 to A4 themselves submitted the returns after the properties of the companies were attached by the court following the registration of criminal cases. “Except for using the name of the companies, the acquisitions were never intended to be the assets of the above companies nor were they treated as properties of the companies at any point of time,” the verdict says.
Referring to huge sums of “unexplained” credits that entered into their bank accounts, the judge said most of these remittances into various accounts were made by Ram Vijayan and Jayaraman, the staff of Ms. Jayalalithaa at her house in Poes Garden.
“The remittances into the said accounts used to be made only by the staff of A1 as per the instructions of A2 [Sasikala], who was managing all the financial affairs of A1,” the judge said. The prosecution, therefore, could show that there was “no real source of income” with the other accused and “the public servant [Ms. Jayalalithaa] was the real source.”
