Hyderabad, May 29: Standing in a court room in Delhi about 10 days ago, DMK leader M K Kanimozhi tried hard to cash in on her ‘I am a woman’ card to evade arrest in the 2G scam case. The attempt failed and the court packed her off to the barracks of Tihar Jail. Kanimozhi’s appeal for sympathy on grounds of being mother to a school-going child also paled before the grave charges she faced. While Kanimozhi couldn’t use her gender card to evade arrest, it often comes in handy to men for various other purposes, for using their names and permanent account numbers to stash their cash.
Be it homemaker wives, mothers or daughters, the fairer sex come to lend their names and bank account numbers for all things that need to be hidden from the public eye or the prying eyes of hobnobbing income tax sleuths. Tax officials say this is the worst kept secret of politicians, bureaucrats, industrialists or even film celebrities whose wives play a major role in keeping their husband’s ‘cash-rich lockers’ away from public view.
Take for instance the case of Dayalu Ammal (DMK chief M Karunanidhi’s wife) who recently walked out free from the clutches of the CBI, despite being a 60 % stake-holder in the controversial Kalaignar TV (DMK’s channel). The reason: she was found to be a “passive board member” who did not get involved in either the broadcast of the channel or the political business of DMK.
And this is true of many other prominent personalities as well, whose better halves have fat bank accounts and fancy designations in their family businesses. But their roles, in most cases, end just there. B Ramalinga Raju’s cooked Satyam books are a case in point. Investigations into his accumulated fortune had thrown up the names of his wife B Nandini Raju and mother B Appalanarsamma as stake holders in his companies. If Nandini had a 25% share in the many benami companies and accounts floated by Raju to safeguard his unaccounted money, Appalanarsamma had a whopping $ one billion on her name. This money, sources said, was siphoned off from Satyam by the Raju brothers. The two leading ladies of the Raju household also had acres of property registered under their names. “This was done on purpose to evade inquiry,” said a CBI source adding, “Though these names have not appeared in the charge sheet, they are currently under our scanner.” The CBI list also include names of other female members of the Raju ‘khandaan’ such as B Radha (wife of Rama Raju) and B Jhansi Rani (wife of Suryanarayana Raju) who along with Nandini and the brothers (Rama and Suryanarayana) owned eight per cent of the Satyam shares. But has anybody ever seen these women? “They barely made public appearances barring family functions. Despite their alleged role in the company, nobody there ever knew about them until the scam broke out,” said sources in the know of things.
A quick scan of affidavits of politicians either shows they are doting husbands or are simply not interested in money, well not in their names. Wife of TDP supremo Nara Chandrababu Naidu, Bubhaneswari, in 2004 (as per affidavit filed by Naidu for Lok Sabha polls) was the owner of assets worth Rs 21 crore while her husband had a comparatively meagre Rs 1.58 crore in his name. In five years, her assets grew to a whopping Rs 56.33 crore while Naidu’s just managed to touch Rs 12.33 crore (source: 2009 affidavit). In the case of Tollywood star-turned-politician Konidala Chiranjeevi too, the wife steals the ‘money’ show. Chiranjeevi’s 2009 election notification shows that his wife Surekha has assets worth Rs 54.66 crore while his own assets are pegged at Rs 33.82 crore. “And this despite Surekha being a plain housewife who rarely interferes in the star’s day to day affairs,” said a political observer. In fact, besides his wife, Chiranjeevi is also believed to have bank accounts and properties in the name of his youngest daughter Srija.
But observers note that ‘using’ the names of wives and daughters to store money away from the public gaze is a well known stunt. “It does not look good on paper if a political leader stacks money in his name as he is supposed to be a social servant. To maintain a clean image they get their wives to own much of their property so that people never get to know how much they actually own,” said Rakesh Reddy Dubbudu, RTI activist and member Election Watch AP. According to him, it is most usually property that is registered in the name of the wife.
And the ‘use’ of the better half does not end with earning a clean image. Showcasing them as prime players in their businesses also help husbands save huge amounts on tax and other spendings. For, apart from a higher IT exemption, the fairer sex is also entitled to benefits, such as low registration charge (in case of property) and bigger grants for private ventures. “Several industrialists and celebrities register land in their wives’ name as the registration cost of a property then drops by a good one per cent,” said a property broker from the city. Buying property in the wife’s name also saves the man the trouble of disclosing the source of the money and helps him evade income tax. “It is a rampant practice among affluent families who pay in cash for a transaction. The source of the money in most of these cases is questionable and, therefore, getting it registered in the name of someone else, especially a female relative, keeps tax as well as legal concerns away,” the broker added.
Apart from land, huge quantities of silver and gold jewellery too are amassed under the wife’s name. In the case of many politicians their wives’ assets run into crores when it comes to jewellery their price ranging from Rs 1 crore to about Rs 50 crore.
The trend of using women to hoard money is not limited to the rich and the famous alone. Several ‘regular’ families use the wife’s name to save on tax. “It is a common practice these days even among chartered accountants,” said a CA from the city adding, “Many of these people run insurance businesses to supplement their earnings, which is not permitted by the Institute of Chartered Accountants of India, the regulatory body. In that case, they register the insurance business in the name of the wife.” The CA claimed that the wife is often nothing but a ‘dummy’ whose job ends with signing a few papers. The business is primarily run by the man.
These so-called ‘dummies’, lawyers say, are useful for men even while setting up a company. Besides tax benefits, they can also avail of bigger grants at low interest rates. “Financial institutions always give first preference to women entrepreneurs. So, if the documents show the wife as the owner or primary stake-holder of the firm, it becomes more convenient to get a loan,” said a high court lawyer, though admitting that once the company is given shape, the reins of the business is entirely in the hands of the man. “When they part ways, is most cases, these women lose it all despite being owners on paper. If they can stand up for themselves, they manage to end up as the richer party,” the lawyer added.
–Agencies