One of the most powerful political families of Andhra Pradesh saw a long-deepening fracture split open wider last month. Former Andhra Pradesh Chief Minister YS Rajasekhara Reddy’s (YSR) son Jagan Mohan Reddy and daughter Sharmila were seen fighting over the ownership of shares in an energy company that was started in 1999. YSR was a Congress legislator back then; he would become the CM only five years later at which time Jagan and Sharmila were both in their 20s, yet to enter active politics.

A lot has changed in these 25 years, from YSR’s death to Jagan’s imprisonment in the disproportionate assets case, and Jagan’s political rift with his sister after he became CM in 2019.

As the opposition Telugu Desam Party (TDP) took advantage of the property dispute to launch political attacks on Jagan, he downplayed the whole issue, calling it a ‘ghar ghar ki kahani’ – the story of every family. But this isn’t just any family property dispute. These siblings are heads of two prominent political parties in Andhra Pradesh and one is a former Chief Minister.

At the core of the issue is transfer of shares of the company Saraswati Power and Industries Private Limited that were in Jagan and his wife Bharathi’s name to his mother Vijayamma and another board member, Janardhana Reddy Chagari, effectively bringing them under Sharmila’s control. Vijayamma is on Sharmila’s side and Janardhana Reddy was purportedly brought in by Sharmila. 

But Jagan has said that he had entrusted the shares to his mother through a gift settlement deed and intended to transfer them to Sharmila only later. He said that Sharmila had said and done things that were defamatory and politically opposed to him, referring to her political speeches as the Andhra Pradesh Congress Committee (APCC) chief and his political opponent. The transfer of shares purportedly orchestrated by Sharmila for her benefit, Jagan says, could cause legal complications for him. He called the move the “last straw” that broke the love for her based on which he had intended to transfer certain assets to her, indicating that the love was already strained by their ongoing political rivalry. 

But of even bigger political significance are the properties themselves that are under dispute. Jagan’s faction insists that he established and expanded the companies and properties in question on his own, that these were ‘self-made’ with “outside loans and investments and without a rupee from his family”. Vijayamma too has conceded that it was “Jagan’s efforts that saw the properties flourish”.

However, many of the companies whose assets the family is squabbling over have been implicated by the Central Bureau of Investigation (CBI) in the disproportionate assets case. CBI has accused Jagan of abusing his father’s position as CM during 2004-2009 and accepting bribes worth crores of rupees from investors in his companies in exchange for favours from the state government.

A warped timeline of the property dispute

The property feud between Jagan and Sharmila is mainly about a certain number of shares in Saraswati Power and Industries. According to Jagan’s appeal to the National Company Law Tribunal (NCLT), he signed a memorandum of understanding (MoU) with Sharmila on August 31, 2019, merely expressing “intention” to transfer certain properties and shares to her on a later date.

On July 26, 2021, Jagan and Bharathi ‘gifted’ their shares in Saraswati Power to Vijayamma. Jagan said in the complaint that this was only a ‘gift deed’ and not actual share transfer, and there was an understanding that Jagan and Bharathi themselves would transfer their shares to Sharmila only eventually, after ‘court clearance’. But Sharmila has said that the gift deeds gave Vijayamma full rights over the shares.

This is because certain assets of Saraswati Power were attached by the Enforcement Directorate (ED) in the disproportionate assets case. However, the 2019 MoU was signed exactly a month after the appellate tribunal for the Prevention of Money Laundering Act directed the ED to release several assets belonging to Jagan, including those of Saraswati Power.

Saraswati Power’s annual returns for FY23 filed in July this year showed that Jagan’s and Bharathi’s shares were transferred to Vijayamma. Jagan alleges this was wrongfully done without his consent to suit Sharmila’s interests. While he meant for Vijayamma to hold the shares in her name in trust, to eventually be transferred into Sharmila’s ownership, he said in his complaint to the NCLT that the transfer of shares in July this year to Vijayamma and Janardhana Reddy’s name was done only to benefit Sharmila. He blames Sharmila for implementing the share transfers, without the actual share transfer forms signed by himself and Bharathi and just the ‘gift settlement deed’, “in a deceitful manner”.

The gift deeds were meant to assure the transfer of 40,50,000 shares from Bharathi and 74,26,294 shares from Jagan to Vijayamma. Each share was worth Rs 10, so shares worth a total of nearly Rs 11.5 crore. 

According to sources close to Jagan, Janardhana Reddy is a board member brought in by Sharmila, and shares in his name are effectively controlled by Sharmila.

Sources close to Sharmila argue that since Saraswati Power’s assets aren’t attached by ED, it shouldn’t matter if those shares are transferred.

But Jagan’s faction, including YSRCP Rajya Sabha MP V Vijayasai Reddy, say that according to the legal opinion they have received, transfer of Saraswati Power’s shares would be a violation of subsequent Telangana High Court orders, and any transfer of assets must happen only after the pending cases involving Saraswati and other companies are resolved. They blame Sharmila for the transfer of shares despite being informed of this legal advice in July and accuse her of creating “potential legal complications” for Jagan.

In a letter to Sharmila, Jagan said he had signed the 2019 MoU only to show intent, out of brotherly “love and affection.” He then admonished her for making “false statements” in public that were “politically opposed” to him and “caused personal disrepute.” In the NCLT complaint, he said that after these series of developments, the recent transfer of shares was the last straw that broke the love and affection on the basis of which he had signed the MoU.

The MoU proposes the transfer of multiple properties from Jagan, Bharathi, Vijayamma or one of the family-run companies to Sharmila – not just shares in Saraswati Power, but also Bharathi Cement and other companies, commercial properties in Hyderabad’s Banjara Hills and Koramangala in Bengaluru. 

The transfer would come into effect only after the final order is pronounced in the relevant PMLA (Prevention of Money Laundering Act) cases, the MoU says. However, it mentions that the Saraswati Power shares would be transferred to Sharmila immediately, so that Sharmila can execute a “cement project.”

Since YSR’s death, Sharmila and Vijayamma stood by Jagan, supporting him politically when he was jailed in the DA case, and campaigning for him till the 2019 Assembly election. Differences cropped up between the siblings in recent years, after Jagan became CM.

Sharmila launched the YSR Telangana Party on July 8, 2021, pursuing her own political career while also steering clear of Jagan’s path. It was only weeks after this that Jagan and Bharathi signed a ‘gift deed’ of their Saraswati Power shares for Vijayamma.

In January this year, Sharmila merged her party with the Congress and was appointed the APCC chief, a position which pitted her directly against Jagan in the run-up to the 2024 Assembly election, in which YSRCP saw a bitter loss.

The inheritance

Jagan’s NCLT appeal was solely about the Saraswati Power shares mentioned in the MoU. But in response, Sharmila brought up the division of all their father’s legacy properties among his four grandchildren. She said YSR wanted Sharmila’s son and daughter, and Jagan’s two daughters to “share equally in all assets that existed during his lifetime,” whether those of Bharathi Cements, Sakshi (Jagati Publications), or any other ventures that were started during his lifetime. Vijayamma too has said the same.

Mocking her for this, Vijayasai Reddy said, “You cannot just randomly ask for things. Would you ask for the Charminar, or Wipro or TCS or the Reliance Group or the Adani Group, claiming your father said it should be given to you?”

Sharmila, however, was talking about “properties acquired with the family resources during YSR’s lifetime”.

The exact extent of YSR’s properties that he bequeathed to his family is, of course, unclear. In his 2009 election affidavit, months before his death, he declared total assets worth Rs 1.34 crore, in his and Vijayamma’s names. Of this, Rs 35.25 lakh was in the form of Saraswati Power shares in Vijayamma’s name.

In the same year, Jagan declared assets worth over Rs 72 crore, including his and his wife Bharathi’s shares in Saraswati Power worth over Rs 2 crore, and in several other companies. 

By 2014, Jagan and Bharathi’s total declared assets were worth Rs 416 crore, including total shares in Saraswati Power worth around Rs 43 crore. While their total declared assets went up to Rs 510 crore in 2019 and Rs 757 crore in 2024, the declared value of their Saraswati Power shares remained nearly the same. 

Sharmila, on the other hand, declared assets worth Rs 180 crore in 2024, along with her husband Anil Kumar.

Jagan’s supporters say that assets were divided between the siblings during YSR’s lifetime and that everything Jagan has agreed to transfer to Sharmila in the MoU, and an amount of nearly Rs 200 crore given to her over the past decade, was only not out of ‘love and affection’ and not because she is entitled to it. But sources close to Sharmila insist that these were dividends owed to her from ‘family properties’ while Vijayamma insists that during YSR’s lifetime, not all of the family property was divided.

Sharmila has said that she will hold Jagan to the MoU and also a residential property of 20 acres which was “verbally agreed upon”.

But these properties and assets in question – Saraswati Power, Sandur Power, Classic Realty, Bharathi Cement, Jagati Publications, and others – have been attached by the ED in the past in the DA case. The CBI had alleged that bribes received by Jagan were used as share application money or to purchase shares in a web of companies including Saraswati Power.

The family property dispute has dug up more corruption allegations from YSR’s chief ministerial term. Deputy Chief Minister and Jana Sena Party chief Pawan Kalyan inspected the Saraswari Power lands in Palnadu district earlier this month and ordered an inquiry into alleged irregularities in land acquisition. He alleged that under YSR’s rule, over a thousand acres of land was acquired for Jagan’s company but the farmers and landowners were never fairly compensated or provided employment. He also alleged that water allocation, forest land reclassification, and extension of land lease were done by flouting rules.