Search the Internet          Tips  Sites: Finance, Investment

UP ministers were behind Cyberspace's Joharis

Sharat Pradhan in Lucknow

Several Uttar Pradesh ministers and top bureaucrats are reported to have been deeply involved with Century Consultants and its offshoot, Cyberspace Infosys -- the two Lucknow-based companies that recently played the vanishing trick to dupe thousands of investors across the country.

Century Consultants, which rose to emerge among India's top stockbrokers over a span of just five years, suddenly went international, promoting Cyberspace Infosys, whose stocks were artificially jacked up. At one point of time, its share price peaked at Rs 1480.

The close nexus between Century-Cyberspace promoters, Arvind Mohan Johari and Anand Krishan Johari, with some top members of the state's ruling coalition as well as some powerful bureaucrats came in handy to mop up huge benaami investments from some of the prominent politicians belonging to Bhartiya Janata Party and Loktantrik Congress Party, as well as Jantantrik Bahujan Samaj Party.

The allegedly ill-gotten wealth of some influential ministers, belonging to each of these parties, found its way into the company, which showed amazing growth and therefore exceedingly swift multiplication, that prompted many to pump in more.

The Johari brothers used their connections with the Sangh Parivar and the UP minister for Housing and Urban Development Lalji Tandon to get Prime Minister Atal Bihari Vajpayee to lay the foundation stone of a multi-million Software Technology Park in Lucknow in January last.

While Tandon was not available for comment, his close aide and member of the state legislative council Rajesh Pandey claimed that the minister had nothing to do with the whole affair. He told rediff.com,, "This is a canard being spread about Tandonji; actually, it was former chief minister Ram Prakash Gupta who was singularly instrumental in getting the Joharis across to the prime minister."

Johari's contacts with the state Power Minister Naresh Agarwal also got the UP government to pump in a 25 per cent equity stake to make the STP a joint venture.

Arvind Johari's photographs with Vajpayee at the colourful ceremony were published in all prominent newspapers of Bombay, Delhi and Bangalore to lend further credibility to their companies. It was alleged that one of Vajpayee's close aides, who made frequent trips to Lucknow as a caretaker of the prime minister's constituency, also played some role in pushing Johari's project.

Among the bureaucrats who assisted the Joharis by pushing their case were reported to be industrial production commissioner Akhand Pratap Singh, and former principal secretary (electronics) R N Trivedi, who was the state's commissioner-cum-director of industries.

Predictably, these politicians and bureaucrats were at pains to plead their ignorance about the scamster. Some of them even claim to have never met the Century-Cyberspace mastermind.

However, thousands of investors who have been duped by the Johari brothers believe that the Joharis' 'VIP connections' helped them get away. "The police kept beating around the bush ever since the scam was unearthed on March 19," points out A K Saxena who heads the recently constituted Century Consultants Investors' Forum. Saxena was of the view: "But for the administration's tacit support and the police ignoring it blatantly, they would not have been able to give everybody the slip and perhaps fly out of the country."

They also saw no plausible reason for the state government to take nearly a fortnight to make up its mind to hand over the case to Central Bureau of Investigation. "Obviously, this delay was only to avoid exposure of the fantastic investments by some ministers and bureaucrats," remarked another member of the investors forum. "For all you know, these influential chaps will manage to retrieve their investments; only lesser mortals like us would be made to suffer."

Interestingly, while Lucknow district police chief B B Bakshi proclaimed that he would sound an Interpol alert for the Joharis, he was at his wit's end when scribes at a press conference sought to know their passport number and other details.

While Bakshi and his junior colleagues claimed that details of their passport could not be made available as the passport office had yet to computerise its old records, a local English daily managed to publish the details.

Clearly, the UP administration had left no stone unturned to hush up the whole case as just another 'fly-by-night' operation. However, with investors dragging in the name of the Prime Minister's Office on account of the foundation stone-laying ceremony, Vajpayee was perhaps left with no option but to direct tangible action in the matter.

ALSO READ:
The Capital Markets Crisis

Money

Business News

Tell us what you think of this report