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The property battle within the family of the former Andhra Pradesh Chief Minister YS Jagan Mohan Reddy is expected to escalate further following the latest order by the National Company Law Tribunal (NCLT), allowing him to cancel the transfer of shares in a power company to his estranged sister Y S Sharmila and mother Y S Vijaya Lakshmi.

The YSR Congress Party chief had filed a petition in September last year, seeking to cancel, annul and nullify the transfer of shares held by him and his wife YS Bharathi in Saraswati Power and Industries Pvt Ltd. He had approached the tribunal after the siblings had a bitter fallout. Sharmila is presently the chief of the Andhra Pradesh Congress unit.

Jagan, Bharati and his mother Vijayamma hold about 74.26 lakh (29.88 per cent), 41 lakh ( 16.30 per cent) and 1.22 crore shares (48.99 per cent), respectively in Saraswati Power.

Illegal share transfer
In the petition filed after he lost power in the 2024 elections, Jagan accused his sister of ‘illegally transferring’ the shares in the family-owned company to herself and their mother Vijayalakshmi.

As the president of the state Congress, Sharmila had led a fierce attack on Jagan and his government during the election campaign. This was one of the factors that led to the defeat of the YSRCP in the assembly elections.  

Jagan mentioned in the petition that he initially intended to allocate shares to Sharmila "out of love and affection" for her. But, he withdrew the offer due to her “deceitful and deeply hurtful actions’.

 

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The plea, filed under Section 59 of the Companies Act, sought rectification of the register of members.

Jagan pointed out that he had entered into a memorandum of understanding (MoU) with Sharmila in August, 2019 stating that "out of love and affection" he would transfer his and his wife YS Bharati’s  shares of Saraswati Power and Industries through a gift deed to his sister.

The MoU also agreed that the transfer would be executed subject to resolution of cases connected to them, which are currently being probed by Central agencies, including the Enforcement Directorate (ED).

This was after Jagan pulled off a stupendous victory in that year's assembly polls and became the chief minister.

However, he changed his mind later.

No love left in the relationship
Following the YSRCP’s drubbing in the last year’s polls, Jagan wrote to his sister in August claiming she had undertaken “a series of actions without a shred of gratitude and accorded least regard to his well-being despite his disposition of love and affection towards her”.

Jagan alleged that the share transfers, carried out through a Board resolution on July 6, 2024, were done without the submission of duly executed share transfer forms or the original share certificates, as required under Section 56 of the Companies Act, 2013.

He said he had formally informed her that he had no intention to honour the MoU and transfer the shares because there was ‘no love left in the relationship’

NCLT backs Jagan
The NCLT Hyderabad Bench, comprising judicial member Rajiv Bharadwaj and technical member Sanjay Puri, observed that the intended transfer of shareholdings had never happened. “While the gift deeds appear to have been formally executed, the intended transfers were never consummated in law due to the non-delivery of the original share certificates by the donors — an essential prerequisite for effecting a valid transfer of shares. In the absence of such delivery, the Company was precluded from lawfully registering the shares in the names of the alleged transferees,” the order stated.

Jagan’s legal team claimed that the shares were not inherited and he chose to give it to his mother “out of love”. Jagan also contended that his sister, knowing that the assets attached by a court could not be transferred till cases against them were resolved, went ahead and illegally transferred them to her name. “Left with no option”, Jagan moved the NCLT to prove his bona fide.

According to Jagan, he was “shocked” to find on July 16 last year that the board of Saraswati Power had transferred his and Bharathi’s entire shareholdings to Vijaya Lakshmi on July 6.

 

Also Read: Jagan warns of Andhra's fiscal distress, cites CAG report

Sharmila to challenge the order
Sharmila has said she would challenge the NCLT order and has accused Jagan of trying to deny her a fair share of the family property. She also contended that Jagan had already given a gift deed to his mother through which he transferred all shares to her, and now that he suspects that Vijaya Lakshmi may transfer them to her, is trying to get them back by denying the gift deed.

Division of properties
According to Jagan, the properties acquired by their father and the ancestral ones were divided among the family members. He intended to transfer the shares, which were his own property, in addition to the Rs 200 crore he had given to his sister directly or through their mother over the past decade.

Jagan alleged that to his "utter shock and surprise" the company's board resolution had transferred the entire shareholding of himself, his wife, and Classic Realty (owned by the family) in favour of Sharmila and their mother.

He further stated that Sharmila had no gratitude and regard for his well-being and that she conducted a series of actions that deeply hurt him and made several untrue and false statements publicly. These actions were not only politically motivated but also blatantly untrue and caused him deep personal dissemination, Jagan claimed. As a result, the relationship between the siblings has strained, and there is "no love left between the two siblings."

 

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