YSR Congress Party president YS Jagan Mohan Reddy has filed a petition with the National Company Law Tribunal (NCLT), seeking to nullify the “illegal” transfer of shares in Saraswati Power and Industries Private Limited to his sister YS Sharmila and mother YS Vijayamma. Jagan and his wife Bharathi Reddy filed the plea on September 10 under Rule 11 of NCLT rules 2016, asking the company to rectify the register of names and reinstate both Jagan and Bharathi as shareholders with the same equity shares as before the transfers were made. The petition also stated that Sharmila’s actions have caused “deep disrepute” to Jagan.
Sharmila had a fallout with the former AP Chief Minister a few years ago, following which she floated her own party – YSR Telangana party – in 2021. To add insult to Jagan’s injury, Sharmila’s new party was merged with the Congress in January this year, just a few months ahead of the Andhra Pradesh Assembly elections. Sharmila was promptly made the chief of Andhra Pradesh Congress, and she had led a campaign against Jagan in the polls. She had also contested and lost from the Kadapa Lok Sabha constituency against her cousin Avinash during the elections in May.
In the petition, Jagan and Bharati have alleged that several share transfers to Sharmila and Vijayamma were carried out through a Board resolution in July 2024 without following the proper legal procedure. The petition said the transfer was conducted without submitting duly executed share transfer forms or original certificates, and was in violation of Section 56 of the Companies Act 2013.
Filed under Section 59 of the Act, the petition also stated that Jagan had entered into a Memorandum of Understanding (MoU) with Sharmila in August 2019 to transfer certain properties and shares “purely out of love and affection.” This intention of transfer, however, was never finalised or executed.
According to the petition, the recent share transfers were made in violation of this MoU and other documents exchanged between the parties, and were the culmination of a “deceitful deviance of law.”
In the event of the rivalry between the siblings over the past few years, Jagan had decided not to go ahead with the transfer of shares as per the earlier MoU, the petition added.
“Respondent no. 2 [Sharmila] herein, without gratitude and without regard to the well-being of the Applicant no. 1 [Jagan] conducted a series of actions that deeply hurt Petitioner no. 1. Respondent no. 2 herein has also made several untrue and false statements publicly and also conducted actions that have not only been politically opposed to Applicant no. 1 herein but are also blatantly untrue and have caused deep personal disrepute to Applicant no. 1,” the petition stated.
It added that Sharmila’s actions have strained the relationship between the siblings and have resulted in the “melting down of all the love and affection the brother had for his sister,” especially because “uncharitable aspersions were being made at a personal level” which are politically motivated. “[Jagan] being immensely agonized by the turn of events and having realized that there is no love left between the two siblings decided not to proceed with his expression of intent to transfer the shares / properties as envisaged under the MOU and Gift Deed…,” the petition further stated.
“This transfer is clearly in derogation of the express understanding intent and text of the MoU and other documents exchanged between the parties and the trust reposed by Applicant no. 1 [Jagan] and 2 [Bharathi] and was a culmination of a deceitful deviance of law,” the petition read.
Jagan argued that the transfer of shares to Sharmila, Vijyamma, and one Janardhana Reddy were “invalid, illegal, void, and unlawful,” and that the ‘illegal’ transfer of the shares have caused irreparable loss, injury, and harm. The YSRCP president further urged the Tribunal to allow the instant application and recognise them as 51.01% shareholders in the company.
The NCLT has issued notices to all respondents and scheduled the next hearing for November 8.
Meanwhile, along with the petition, Jagan also sent a letter to Sharmila on August 27 pointing out that along with the ancestral property inherited from their father YS Rajasekhara Reddy, he had also built his own businesses.
“...out of the sheer love and affection, I always bore towards you as my sister, I had also expressed my intention that, unrelated to any consideration and purely out of love and affection, I intended to effect transfer of certain properties to you at a future point of time. This was in addition to the amount of approximately Rs.200 crores already given to you directly or through our mother over the last decade or so. This too was given by me out of my sheer love and affection for you,” Jagan said.
He said that despite his love and affection towards his sister, Sharmila made several untrue and false statements publicly which caused personal disrepute.
“In view of this and other actions undertaken by you, it makes me wonder why there should be any love and affection or fondness towards you after all the actions you have committed. It is no secret that we are no longer on the best of terms and in view of this changed situation, I wanted to formally intimate you and put you on notice that I have no further intent to act upon my original intent as expressed in the MOU,” the letter read.
Sharmila’s response to the letter
Responding to Jagan’s letter on September 12, Sharmila had said that Jagan was not obliging to the will of their late father to distribute the property equally among all four of his grandchildren. “Our father was unequivocal in his instructions that all four of his grandchildren are to share equally in all assets that existed during his lifetime, whether they pertain to Bharathi Cements, Sakshi, or any other ventures initiated prior to his passing. Our mother was not only a witness to these explicit instructions but also observed all interactions and agreements between us to date.”
Stating that the transfer of shares was part of the property sharing “settlement,” she added, “...you insisted on retaining a majority share in Bharathi Cements and Sakshi. But since you had the upper hand, you did bulldoze your way and we agreed to a settlement as stated in the MOU. Since you are my elder brother and in the interest of resolving family disputes, I agreed to give up my equal share. Thus, under the MoU executed on 31.08.2019, only a few properties were assigned to me.”
“You have now chosen to file cases against your own mother and deprive your own sister and her children of properties to which they are entitled under the MoU. I am appalled at the extent to which you have strayed from the path of our noble father,” Sharmila said.
She also slammed Jagan’s intervention in her political career, claiming that it was “absurd” of him to suggest that she put a sign on a clause that binds her from speaking against Jagan or their cousin Avinash on public platforms. “Imposing such a condition to come to a settlement even on the discounted MoU is entirely unreasonable,” she said.
She further wrote, “My political choices should have no bearing on dear father's instructions for all his grandkids to have an equal share in all assets that existed during his time. As my older brother, it is your responsibility toward my children who are related to you by blood to execute the MOU you signed willingly.”