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Jagan moves NCLT, accuses sister of illegal share transfer
YS Jagan Mohan Reddy has petitioned NCLT, accusing sister YS Sharmila of illegally transferring shares of Saraswati Power, straining their relationship.
Former Andhra Pradesh chief minister and YSR Congress Party (YSRCP) president YS Jagan Mohan Reddy has filed a petition before the National Company Law Tribunal (NCLT) accusing his sister and state Congress chief YS Sharmila of illegally transferring shares of Saraswati Power and Industries Private Limited, which were held by him and his wife YS Bharathi, in her and their mother Vijaya Lakshmi’s name.
In his petition filed on September 3, which came to light on Wednesday, Jagan has accused Sharmila, their mother and two others. The plea, seen by HT, is expected to come up before the tribunal for hearing on November 8, people familiar with the matter said.
According to the petition, former Andhra Pradesh chief minister late YS Rajasekhar Reddy had distributed all his properties among his wife Vijaya Lakshmi and two children – Jagan and Sharmila — fairly and equitably.
Jagan in the petition said that he and Sharmila entered into a memorandum of understanding (MoU) on August 31, 2019 wherein he will transfer his and Bharathi’s shares to his sibling at a later date after completing due process “unrelated to any consideration and purely out of love and affection”.
Jagan, however, pointed out that the MoU clearly mentioned that such transfer shall be done after the final adjudication of the ongoing CBI and ED cases pending against him. Till such time, he made his mother a 48% shareholder in his company by transferring 12,174,207 equity shares in her name, which would be subsequently transferred in the name of Sharmila.
In 2021, Jagan also executed a gift deed in favour of his mother, transferring the shares in her mother’s name with a condition that the gift deed would be executed only after the adjudication of the court cases pending against him and on execution of further required documentation such as share transfer forms, handing over of the share certificates etc.
“No actual transfer of shares took place as no share transfer forms were executed by Jagan and Bharati and the gift deed executed in favour of Vijayalakshmi was a mere manifestation of the intent to transfer the shares at a future date to Sharmila,” the petition said.
Subsequent developments on the political front, meanwhile, led to differences between the siblings. Months before the simultaneous Lok Sabha and assembly elections in Andhra Pradesh this summer, Sharmila had joined the Congress, which appointed her APCC president in February.
In his petition, the YSRCP chief expressed his contempt for Sharmila, saying she had no gratitude and regard to the well-being of her brother. “She conducted a series of actions that deeply hurt me and that she also made several untrue and false statements publicly, causing deep personal dissemination to me,” he said.
The former CM asserted that Sharmila’s actions strained the relationship between the siblings and resulted in “melting down of all the love and affection” he had for her.
The petition alleges that on July 6, Sharmila illegally got a resolution passed in the board of Saraswati Power and Industries, transferring the shares held by Jagan and Bharati as well as of another shareholder (Classic Realty) in the name of their mother.
Jagan said that he no longer has any intent to proceed with the MoU, gift deed or share purchase agreements. “As such, the transfer of said shares is invalid, illegal, void, unlawful and therefore, the same is liable to be set aside,” he alleged.
The petition sought that the transfers of 7,426,294 equity shares from Jagan to his mother; 4,050,000 shares from Bharathi to his mother; and 1,200,000 shares from Classic Reality Private Ltd to former Saraswati Power directors be nullified. He said the transfers were done without the submission of duly executed share transfer forms or the original share certificates, as required under Section 56 of the Companies Act, 2013.
Sharmila could not be reached for a comment. “She has not made any statement yet on the issue,” a spokesperson associated with her said in response to a text message seeking her comment.
