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July 26, 2001
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'PM does not know the Joharis personally'

Sheela Bhatt in New Delhi

The Prime Minister's Office has clarified that the prime minister does not personally know the Johari brothers, who have been charged with duping hundreds of gullible investors.

The controversy erupted after the Joharis vanished with huge amounts of public money, shortly after Prime Minister Atal Bihari Vajpayee participated in a ceremony to mark the setting up of an infotech park, a joint venture between the Uttar Pradesh government and the Johari brothers.

The prime minister's presence at the ceremony led to the Joharis being able to lure hundreds of investors who were taken in by Vajpayee's presence which spoke about the Joharis' 'reliability,' observers alleged.

The PMO, however, stated the ceremony was held long after the meltdown of the Johari companies had already begun. 'The prime minister's presence at the ceremony has in no way attracted fresh investment,' it was stated.

'The prime minister had asked for a CBI inquiry into the affair, after hearing small investors' woes at a meeting in Lucknow in April. Since a CBI inquiry can be ordered only at the request of the state government, the prime minister requested Uttar Pradesh Chief Minister Rajnath Singh to request the Central Bureau of Investigation to conduct a probe,' the PMO clarified.

Meanwhile, those who were duped by the Joharis -- promoters of Cyberspace Infosys Limited and Century Consultants Limited -- allege that the prime minister's 'association' with the group sent misleading signals to small investors.

However, distancing itself from the tainted companies, the PMO clarified: 'The first request that the prime minister lay the foundation stone of the infotech park came from the then UP CM Ram Prakash Gupta in December 2000.'

'Another request was made by Shivkant Ojha, state minister for electronics and information technology, on January 25, 2001. The prime minister laid the foundation stone of seven other projects at the same function,' the PMO added.

The PMO also highlighted that almost all the small investors had invested money in these companies before January 31, 2001. In April 2001, at a meeting held in Lucknow, aggrieved investors had informed the prime minister that they had invested in Joharis' firms between 1994 and 2000.

The share price of Cyberspace Infosys had zoomed to Rs 1,600 just before the joint venture to set up the software technology park was entered into. However, in less than 45 days of the ceremony, the Johari brothers absconded.

"There was no time for anyone to exploit the said 'association' with the prime minister," claimed a PMO official. He, however, agreed that "the Joharis put up hundreds of posters all over Lucknow showing the prime minister at the stone-laying ceremony."

"They were just trying to save their skin. They wanted to salvage their operations. But it's wrong to say they got fresh investment because of that function. That is not true," the official emphasised.

When asked why the promoters' background was not looked into before the prime minister attended the ceremony, the PMO official replied: "The prime minister normally never goes to a private ceremony. Since this was an official state government function, he attended it."

"The PMO does not have a verification mechanism. It is incorrect to say the prime minister 'gave them a handle' to promote their companies. The important thing is that no fresh investor joined the companies after January 31," he said.

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