PMO distances itself from Cyber Space group

By Our Special Correspondent

NEW DELHI, JULY 23. The Prime Minister's Office (PMO) today sought to distance itself from the scam-accused Johari group of Lucknow, promoters of Cyber Space Infosys Limited and Century Consultants Limited. The promoters of these companies are in jail for defrauding the public and the Unit Trust of India, but on January 31, the Prime Minister, Mr. Atal Behari Vajpayee, had laid the foundation stone for a software technology park (STP) in Lucknow promoted by them.

While distancing the Prime Minister from the accused, the PMO almost admitted that no investigation had been conducted into the bona fides of the promoters before Mr. Vajpayee agreed to lay the foundation stone for their project. In a late evening press release, the PMO emphasised the point that the Johari family was not personally known to the Prime Minister and that he had laid the foundation stone for the STP at the request of the former Uttar Pradesh Chief Minister, Mr. Ram Prakash Gupta, and the State Minister for Electronics and Information Technology, Mr. Shivkant Ojha. The Uttar Pradesh Government has 26 per cent equity in the STP.

According to the PMO, the Johari brothers were also involved in stock exchange brokering at Lucknow and Mumbai through Century Consultants Limited. They also collected fixed deposits and money from the public for a ``badla byaz scheme'', which was used to finance share market activities.

It was also conceded that many small investors had invested money in the scheme, but this was done prior to the foundation-laying ceremony. There have been allegations from Opposition parties that the Prime Minister's association with the group - through the foundation stone-laying ceremony - gave a false sense of security to small investors.

The share price of Cyber Space Infosys was in the range of Rs. 1,000 to Rs. 1,600 last year but with the meltdown of technology stocks, they crashed and the Joharis could not cope with their liabilities. In March, the Johari brothers absconded from Lucknow and Mumbai.

The PMO release listed the fact that on investor complaint, nine FIRs were registered in Lucknow against the promoters of these companies from March 21 onwards and on a request from the State Government on April 4, the matter was handed over to the CBI for investigation on April 11. By May 22, the brothers were apprehended from Kalimpong in West Bengal and are now in custody. The CBI has to file its charge sheet by August 22. Properties owned by the accused, worth about Rs. 17.05 crores, have also been located by the CBI.

The CBI registered two more cases against the brothers in July, relating to a fraud of approximately Rs. 32 crores from the City Cooperative Bank, Lucknow. Another case was registered against Cyber Space Infosys for defrauding UTI.

The PMO release also drew attention to the assurance given by the Prime Minister that no one, however high, would be spared if found guilty in the scam. The proximity of some Uttar Pradesh BJP leaders to the Johari brothers has been hinted at in the recent past.

PTI reports:

The Uttar Pradesh Chief Minister, Mr. Rajnath Singh, said he would order, if necessary, a probe into the joint venture between the State Government and Cyber Space Infosys.

``I will get the documents and ascertain if any fraud was committed. If I feel something is wrong, I will definitely order an probe,'' he told Aaj Tak. The STP would not have been inaugurated by Mr. Vajpayee had proper information about the company been made available before.

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