Vol. XLIII No. 07 February 17, 2019

Baseless Allegations against Prajasakti Daily

A LIST of companies under the scanner of Serious Fraud Investigation Office (SFIO) in the backdrop of demonetisation was announced in the parliament in March 2018.  This list contains the name of Prajasakti Printers & Publishers Pvt Ltd also. Basing on this, some concocted, baseless stories appeared in some sections of media. These stories sought to spread falsehoods alleging that Prajasakti was involved in illegal monetary transactions of crores of rupees.  Hence this clarification:

Since the last four decades, Prajasakti Daily was brought out by Prajasakti Sahithi Samstha, braving all odds. After the bifurcation of Andhra Pradesh, it was decided that a separate daily called ‘Nava Telangana’ would be published from Telangana, while Prajasakti will be published for the Andhra region. A company, ‘Prajasakti Printers & Publishers Pvt Ltd’, was established and all the business pertaining to Prajasakthi daily in the Andhra region got transferred to this Company from April 2016.

Thus, all the financial transactions of Prajasakti began appearing in the accounts of Prajasakti Printers & Publishers Pvt Ltd, from April 2016. The Company is operating 43 bank accounts in the same bank, to reflect the incomes and expenditures, edition-wise as well as department-wise. There are eight editions of the paper. The inflow of funds from the customers appears first in the edition account and then gets transferred to the Head Office account.  Similarly, the expenditure appears first in the Head Office account and then gets transferred to the edition account.  Similar procedure is adopted in respect to different departments also. Thus these are purely internal transactions. If the transactions as appearing in every one of these bank accounts are totalled, it appears to be many more times than the actual total inflow and outflow of funds for the Company as a whole.  Thus, in the year 2016-17, the year of demonetisation, total transactions were amounting to Rs 127.71 crores according to the bank’s records.

The Central Ministry of Corporate Affairs ordered an enquiry into the affairs of Prajasakti Printers & Publishers Pvt Ltd, by the Serious Fraud Investigation Office (SFIO) after demonetisation took place. They were not conversant with the background of the bifurcation of the newspaper entity or the way the accounts of the company were maintained. The bank accounts of the company were blocked.  Representatives of Prajasakti appeared before the SFIO team and submitted all the records sought and answered all the queries in a forthright manner. They also established that cash deposits amounting to Rs 127.71 crore as mentioned were not made in the bank accounts. They showed that the pattern of deposits and transfers were the same before and after demonetisation. They explained all the transactions to establish there is nothing irregular about them.

In the meanwhile, the National Company Law Tribunal, upon a petition by Prajasakti, passed orders in February 2018 to reactivate the bank accounts of Prajasakti and also permitted it to submit its accounts as well as annual returns up-to-date.

Thus, the commitment of Prajasakti to honesty and transparency has got vindicated before the National Company Law Tribunal as well as the SFIO. Prajasakti was established to stand for the ideals of equality, and propagate progressive politics. It adheres to these ideals and will continue to do so in future also.