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A new 'scam' taints Lalu and family

By Satyavrat Mishra
April 27, 2017 09:28 IST
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The so-called soil scam has left Lalu Yadav alone in the Mahagathbandhan.
Satyavrat Mishra reports.

Less than two years after his party halted the Narendra Modi juggernaut in Bihar along with the Janata Dal-United and the Congress, Rashtriya Janata Dal chieftain Lalu Prasad is under fire for his family's alleged role in a new controversy: The so-called soil scam.

The controversy could prove more than a passing headache for Lalu who is barred from contesting elections till 2024 for his involvement in the fodder scam.

It all started when it came to light that the Patna zoo, which comes under his elder son, Tej Pratap Yadav, the minister for health, environment and forestry in the Bihar cabinet, purchased soil worth Rs 90 lakh (Rs 9 million).

The zoo authorities, while confirming that the soil was purchased, said they had no idea where it came from, though they disclosed that the purchase was done on the basis of quotations and no tenders were floated.

Companies in which Lalu's family members are directors
  • LARA Projects LLP: Rabri Devi, Tejaswi Prasad Yadav & Tej Pratap Yadav
  • LARA Distributors Pvt Ltd: Rabri Devi, Chanda Yadav, Ragini Lalu & Misha Bharti
  • Fairgrow Holdings Pvt Ltd: Ragini Lalu & Chanda Yadav
  • AB Exports Pvt Ltd: Ragini Lalu & Chanda Yadav
  • AK Infosystems Pvt Ltd: Ragini Lalu & Chanda Yadav
  • KHK Holdings Pvt Ltd: Shailesh Kumar & Misha Bharti
  • MISHAIL Packers & Printers Pvt Ltd: Shailesh Kumar & Misha Bharti
  • Aegis Distributors Pvt Ltd: Shailesh Kumar & Misha Bharti
  • Royal Tulip Hotels & Resorts: Shailesh Kumar, Ranjan Kumar, Subhash Goyal
  • Shivoaham Entertainment Pvt Ltd: Tej Pratap Yadav, Kumar Priye Ranjan & Chhotu Chaliya
  • Sunrise IT Infrasoft Pvt Ltd: Chanda Yadav, Vikram Yadav, Virendra Narayan Singh

Source: Ministry of Corporate Affairs

Soon, it emerged that the soil was allegedly ferried from a two-acre piece of land on the outskirts of Patna where a mall, billed as Bihar's biggest, was coming up.

According to land revenue department records, this land is owned by LARA Projects LLP.

According to the registrar of companies, it has three shareholders -- Rabri Devi, Tej Pratap Yadav and Tejaswi Yadav -- and capital contribution of Rs 4.02 lakh.

With 2,402 shares, Rabri Devi is the majority shareholder; Tej Pratap and Tejaswi are directors in the limited liability partnership with 800 shares each.

The company started life as Delight Marketing Private Ltd in 1981 and belonged to the family of RJD MP and former Union minister for corporate affairs Prem Chandra Gupta.

Lalu Prasad has acknowledged that Rabri Devi brought the shares of the Gupta family in the company in 2010.

Between 2011 and 2014, she gifted 800 shares each to Tej Pratap and Tejaswi and inducted her daughters, Ragini Lalu and Chanda Yadav, on the company's board of directors.

The company was renamed LARA Projects Private Ltd in November and the daughters were excluded from the board. It subsequently changed its name to LARA Projects LLP.

Lalu has also accepted that LARA Projects is developing the seven-floor mall with Meridian Construction.

"It's an arrangement where we have given the land and Meridian Construction is building the mall. The shops will be divided equally between us and the developer. It is common practice and there is nothing wrong with this," says the former Bihar chief minister.

Meridian Construction is owned by Syed Abu Dojana, the RJD MLA from the Sursand constituency in Sitamadhi.

"It's all legal. What is wrong with my family members owning a company? It is all a conspiracy to malign my family's image," Lalu says.

Prem Chandra Gupta and Lalu refuse to disclose the consideration for which Delight Marketing was sold. "Why should we tell you?" asks Lalu.

Delight Marketing had bought the piece of land on which the mall is coming up from a hotelier in February 2005, who died in 2012.

"During his term as the Union railway minister between 2004 and 2009, Lalu Prasad gave railway hotels in Ranchi and Puri to the hotelier on lease for 15 years. In return, this land was transferred to this company. Later, the whole company was sold to Prasad's family," says Sushil Kumar Modi of the Bharatiya Janata Party.

According to him, the land is worth no less than Rs 250 crore (Rs 2.5 billion).

Lalu Prasad refutes the allegations. He told a press conference last week: 'The decision to lease these hotels was made by the NDA (National Democratic Alliance) government headed by Atal Bihari Vajpayee. We leased the hotels through the open bidding system and there were no irregularities in the process.'

He went on to call Sushil Modi a 'vulgar person who targets children.'

Lalu rarely reads from a written statement and often likes to move on a tangent from the subject of discussion.

However, last week while he was rebutting the allegations, he not even once diverted from the topic.

This is not the first time the hotel deals have attracted controversy.

Ironically, the allegation was first made in 2008 by the then state JD-U chief Rajiv Ranjan alias Lalan Singh.

Singh, one of Bihar Chief Minister Nitish Kumar's most trusted lieutenants, is the water resources minister in the grand alliance government.

Neither Tejaswi nor Tej Pratap made any disclosure about the land or their stake in LARA Projects or Delight Marketing in their election affidavits or their mandatory annual asset declaration before the chief minister, Sushil Modi adds.

Lalu rejects the charge and says his sons have provided the details in their affidavits and asset declarations.

However, there is no specific mention of the shares of LARA Projects or Delight Marketing in their asset declarations uploaded on the state government’s website.

There are also allegations that the construction of the mall started in June 2016 even though the necessary clearances have still not been obtained.

The mall is yet to receive no objection certificates from the fire department and the Airport Authority of India.

RJD MLA Dojana insists the mall is being constructed according to the norms.

While the RJD chief says his sons did nothing wrong, he appears to be losing the battle of perception.

It took him more than five days to respond to the allegations, during which his rivals had a free run, and the arguments he presented were not strong enough to assuage the sentiment.

For example, Lalu Prasad could not explain what made Rabri Devi buy Delight Marketing in the first place? And at what price was the company sold?

How could the company, which has such a high value land among its assets, could still be valued at just Rs 4 lakh (Rs 400,000)?

Prem Chandra Gupta says that due to operational problems, Delight Marketing could not develop the land on its own, and hence the board of directors decided to transfer the ownership of the company to Rabri Devi.

"It was all according to the rules. The payment was also made through cheques. There is nothing wrong with it," he said.

The controversy could dent Lalu Prasad's image as a leader of the backward and the poor.

When asked about it, he says: "Every man wants his son to do business. Do you expect that we should wear torn clothes as well? If I have the land, why can't I use it for commercial purpose?"

The members of the Yadav family seem to be more business savvy than other political scions.

According to the Web site of the Union ministry of corporate affairs, Lalu Prasad's family members have controlling stakes in no less than 10 companies.

The Yadav stalwart had once shunned technology as 'yeh IT-YT kya hota hai?', but that didn't stop his daughters, Ragini and Chanda, to establish and run AK Infosystems Pvt Ltd that claims to be dealing in data processing.

Sushil Modi alleges that the company owns vast pieces of land in and around Patna.

A senior RJD leader says the allegations have been instigated by other mall owners in the city as they are afraid that the new mall will eat into their business.

The first family of the party thinks it is being targeted by Sushil Modi in order to revive his dwindling political career after the BJP's humiliating defeat in the 2015 assembly elections.

Lalu Prasad says the mall will bring jobs and prosperity to the area and those who are opposing the construction are against development. Not everybody is buying this line, though.

"It's the same Lalu Prasad who fought the Land Acquisition Bill hammer and tongs and argued that farmers' land would be taken in the name of development and later malls will be constructed on it," quips a senior Bihar politician.

The scandal has also changed the equation among the partners of the grand alliance.

So far, Lalu Prasad has waged a lonely battle to defend his family's name, and the leaders of the biggest party in the alliance are upset with Chief Minister Nitish Kumar's tactical silence.

Lalu Prasad and Rabri Devi are particularly upset with the 'gossip' that two senior JD-U leaders are leaking information to the Opposition.

Many RJD leaders see this as Nitish Kumar abandoning Lalu Prasad in order to protect his own image.

IMAGE: Lalu Prasad Yadav, right, with Prem Chandra Gupta, centre, and Bihar Deputy Chief Minister Tejaswi Prasad Yadav, left.

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Satyavrat Mishra
Source: source