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Loans, prostitution & politics: The 'call money racket' raging in Andhra

Aishwarya Yerra | Updated on: 14 February 2017, 1:58 IST

The Andhra Pradesh call money racket is more rooted and bigger than we thought. Just how will TDP wriggle out of this one?

After an uproar in the media about the extortionist "call money" racket and the shockwaves it sent through the state, Andhra Pradesh Chief Minister N Chandrababu Naidu has ordered a judicial inquiry into the scam.

He has also asked the victims not to repay the loans they have taken from extortionists operating under the guise of micro-finance companies. Naidu has promised that none of the guilty would go unpunished.

Referring to cases of sexual exploitation of village women who could not afford to repay their loans, he declared, "We are also going to establish a special court at Vijayawada to try cases under the Nirbhaya Act (related to issue of sexual exploitation) and appoint Special Public Prosecutor for speedy disposal of the cases, so that justice is be done to the victims at the earliest."

The "call money racket" was busted by the police in Vijayawada last week following the complaint of a woman who claimed to have been sexually exploited by loan sharks.

What then is call money and why is it a scam?

When a person needs an emergency cash loan, all he has to do is to make a telephone call to the micro-finance company or the lender. Someone will then arrive at the borrower's doorstep with the required money, a promissory note and other paperwork already completed. The client then only has to sign the papers.

However, the catch is that the interest rates are usurious - ranging between 20 to 200% per month! The borrowers also have to pledge their land, vehicles, or house -- anything that will serve as collateral for the loan.

What's different about this racket?

The state isn't new to shady microfinance operations; in 2011, united Andhra Pradesh faced irresponsible lending on a massive scale. The government was then forced to introduce the AP Microfinance Regulation Act.

However, the Vijayawada case has added a whole new layer to the racket, with the sexual exploitation and prostitution angles that have now surfaced.

Who were the targets?

The Vijayawada syndicate went for the easiest targets. They offered loans to women in dire need of funds. Housewives and students fit this bill perfectly. When these women defaulted on loan payments, the syndicate capitalised on their opportunity to bite deep. Not only did they grab their properties, but they also forced them to sign blank cheques and promissory notes. The intimidatory tactics of the syndicate also exposed the women to sexual harassment.

A Sakshi Post report claims that members of the syndicate would drug women defaulters and take photos and videos of them in compromising situations. The moneylenders would then blackmail the women into prostitution.

The syndicate also shrewdly used their blackmail tactics to coerce their victims into introducing other women from their neighbourhood to the loan scam.

Just how big is the case?

Investigations have thrown up one shocking revelation after another. The names of a few relatives of elected representatives, as well as that of a few police personnel have surfaced in connection with the racket. There is also strong suspicion that the syndicate had the backing of the ruling TDP.

When the case first came to light, it was believed that the nexus was confined to Vijayawada. With more and more details emerging every day, it has been established that the syndicate is spread over Srikakulam district in the north to Chittoor district in the south.

While it was earlier suspected that 500 families had been sucked into this quagmire, these figures now seem to be a massive underestimate.

Six days after the racket was busted, women queued up outside Central Complaint Cell at the Police Commissioner's office in Vijayawada and police stations across the state to file their complaints about the loan sharks. Many chose to cover the faces and heads to avoid being recognised and consequently targeted by the ringleaders or their cronies.

How much has been probed?

At least 80 arrests have been made in connection with the racket in the last few years. The arrested include the alleged kingpin of the gang, Y Ramachandra Murthy, and a Transmission Corporation of Andhra Pradesh deputy engineer Satyanand.

According to a report in The Hindu, at least 38 party workers and politicians from the Congress, YSR Congress and the TDP have been taken into custody. The report states that 10 leaders from Congress, 10 from YSR Congress, one leader from CPI and eight party workers of the ruling Telugu Desam Party activists were among the call money organisers nabbed in the surprise raids.

"We seized 938 promissory notes, 192 blank cheques, eight stamp papers, 25 account books, 310 property documents, agreement papers and registration papers of different assets mortgaged by the call money organisers," Vijayawada Police Commissioner Gowtam Sawang told the Hindu.

Political repercussions

The racket disrupted the Andhra Pradesh Assembly on 16 December.

YSRCP members and TDP MLAs clashed inside the Assembly, with some Opposition leaders also throwing paper balls at Speaker K Sivaprasad Rao. YSRCP president and MLA Jagan Mohan Reddy and 58 Opposition MLAs were suspended. They responded by holding a protest on the Assembly grounds.

This case seems to be getting murkier at every turn. And going by the political links that have been unmasked so far, it remains to be seen how much of the racket will be busted, and how.

First published: 20 December 2015, 3:58 IST