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Lalu's Multiplier Effect: What They Don't Teach You At Harvard

Author: Team Khabare
Publication: Khabare.com
Date: April 10, 2017
URL:    http://khabare.com/politics/lalus-multiplier-effect-what-they-dont-teach-you-at-harvard

Around the same time in 2006 that Harvard Business School made him a case study and Lalu Prasad Yadav was being dined and feted for “transforming” the white elephant that was Indian Railways into a “profitable venture”, the then railway minister was engineering huge profits elsewhere for him and his family.

Less than a year earlier, Lalu Yadav as railway minister had authorised the sale of two railway hotel properties in Ranchi and Puri. The buyer in both cases was Harsh Kochhar. Lalu Yadav would explain later that Kochhar got the hotels because when tenders were opened, it was found that he had made the highest bids in both cases.

Whatever that may be, but it was a deal that would yield Lalu Yadav a lot in the coming years.

Under attack now for irregularities in the land deal for a proposed mall, Lalu Yadav says that the two-acre piece of land which is now co-owned by his wife and two minister sons at Saguna Mor in western Patna came in possession of his wife Rabri Devi in 2005, in lieu of sale of her shares in Delight Marketing Company Ltd, a company then owned by Prem Gupta. A RJD member of the Rajya Sabha and a close associate of Lalu Yadav, Gupta was then the Union corporate affairs minister. According to Gupta, he had acquired the land in 2005 from the same Harsh Kochhar. Thereafter, he transferred the firm through sale of shares to Rabri Devi.

On June 26, 2014, Delight Marketing Company Ltd incorporated as its directors Lalu Yadav’s sons Tej Pratap and Tejashwi and his third daughter Chanda Yadav. In November 2016, it became Lara Projects Pvt Ltd and on February 14 this year, it became Lara Projects LLP with Lalu's wife Rabri Devi, and sons Tej Pratap and Tejashwi as directors.

The BJP leader of the opposition in the Bihar Assembly Sushil Modi had on Saturday claimed that on an investment of a paltry Rs 4 lakh, the former Bihar Chief Minister and his family had come to own property worth over Rs 500 crore in the state capital. Modi had also demanded that Lalu’s two sons, one the state deputy chief minister and the other a cabinet minister in the Nitish Kumar government be sacked forthwith for concealing their shares in a proposed mall from their electoral declarations.

Lalu Yadav has not denied that he and his family owned the property and even defended his sons’ right to enter into any business they chose to. He admitted that his family had acquired the land on which the mall was being built by taking over the company that previously had owned the property by floating a limited liability partnership (LLP) named Lara, which is short for Lalu and Rabri. Lalu Yadav also admitted that it was out of Rabri’s love for her two sons that made her transfer her shares to them.

While the latest scam surfaced with regards to the dumping of soil in the Sanjay Gandhi Biological Park to the mall being constructed near Saguna Mor, which Sushil Modi said was being built for Rs 500 crore on a plot of land worth Rs 100 crore. Modi says the two sons have not declared their interests in the property in the election affidavits, but Lalu Yadav insists they have. However, there was no mention of Lara Projects LLP in the election affidavits and assets declarations by Tej Pratap and Tejashwi on either the Election Commission or state cabinet secretariat websites.

The RJD chief rebutted Modi’s allegation that the company’s takeover was not mentioned in IT returns of the parties concerned.

Asked why, Gupta said: “It was the decision of the board of directors that our company was unable to work, so they decided to transfer it. It was transferred as per rules and payment was made through cheque.”

He did not reveal the value of the company or the cost at which he transferred the ownership to Lalu Yadav's family. He sidestepped questions on why the company was transferred to Lalu Yadav's family and not someone else.

The BJP has upped the ante over the issue. “I will appeal to chief minister Nitish Kumar to crack down on benami property and immediately sack Lalu Yadav's two minister sons for getting involved in such things,” Sushil Modi said. “They have not even declared these things in their assets declaration and election affidavits. Taking the moral responsibility, Nitish Kumar should order a probe,” Modi said.
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