When YS Rajasekhara Reddy was the Chief Minister of United Andhra Pradesh, thousands of acres of land in Anantapur district were allotted to his close friends in the name of Lepakshi Knowledge Hub. The central investigation agency CBI has also concluded that all this was done at the behest of Jaganmohan Reddy, son of YS Rajasekhara Reddy
Amaravati: Chief Minister YS Jaganmohan Reddy and Co, who once looted in the name of Lepakshi Knowledge Hub, are trying to make a quick buck as Indu Projects is going bankrupt. They chalked out a plan to loot the most valuable Lepakshi Knowledge Hub lands pledged by Indu Projects in various banks. Rs 2,500 crore worth of land was bought for a nominal payment of Rs 500 crore. Why are the banks ready to give up Rs 2,500 crore worth of land under a debt of Rs 4,531 crore for so meagre? What is the role of the State government in the whole process? If we look at the bankruptcy process of Indu Projects, the extent of irregularities at every step will be exposed.
When YS Rajasekhara Reddy was the Chief Minister of United Andhra Pradesh, thousands of acres of land in Anantapur district were allotted to his close friends in the name of Lepakshi Knowledge Hub. The central investigation agency CBI has also concluded that all this was done at the instigation of Jaganmohan Reddy, son of YS Rajasekhara Reddy.
Indu Projects was the company of Shyamprasad Reddy, who played a major role in the process. Neck deep in debt, Indu Projects went bankrupt some time ago. As of March 2019, the company had an outstanding debt of Rs 4,531.44 crore to banks and other institutions. The insolvency resolution process of the company was taken up by the National Company Law Tribunal- NCLT department in Hyderabad. As a part of this settlement, out of the Rs 4,531.44 crore claimed by the creditors, Rs 4,138.54 crore debts have been approved by the insolvency mechanism.
The Committee of Creditors agreed to the proposal of Earthin Projects to pay Rs 500 crore, along with K Ramachandra Rao Transmission and Projects, to waive this amount. Law Tribunal’s approval has also been completed to this extent. The company will have to provide additional Rs 40 crore as working capital for the works to be undertaken after the change of ownership. Even this additional amount will be used by Earthin Consortium without paying the banks. Another Rs 1 crore will have to be paid towards the bankruptcy proceedings. Earthin Consortium, which will pay only Rs 500 crore to the banks and other lenders, will get all the lands pledged by the banks. Along with 4,191 acres of Lepakshi Knowledge Hub in the Anantapur district, there are valuable lands and shares in the name of affiliates in Hyderabad.
On the way from Bengaluru to Hyderabad, starting from the Andhra Pradesh border, there are Lepakshi lands on either side of the road within 18 km range. About 65 km from the border towards Karnataka, Bangalore International Airport is located along the same road. That is, from the point of view of real estate, we can understand how valuable these lands are. In the charge sheet filed by the CBI in 2013 on the Lepakshi land scam, their value was calculated at an average of Rs 15 lakhs at that time.
It is clearly stated that the total value of 8,844 acres will be Rs 1,326.60 crore. According to the current bankruptcy process, the value of 4,191 acres, which is going to be owned by Earthin Projects, is Rs 628.65 crore as per the estimates of 2013. In these nine years, many changes have taken place in the area. The Kia car industry was established at a distance of 25 km from Andhra Pradesh’s border towards Hyderabad. Several affiliated industries have also come up in the surrounding areas. Consequently, the value of the land has increased dramatically. Currently, the peripheral lands in the Lepakshi Knowledge Hub area are worth up to Rs 1 crore, while the interior lands are worth Rs 30 to 40 lakh.
Among Indu’s collaterals in banks, five acres of land belong to VK Projects at Durgam Cheruvu in Hyderabad. Sindhura and Astiva Companies own 11.3 acres in Miyapur, 35 acres in the name of Sundari Company in Shamirpet, 2,595.69 yards Club House in Indu Fortune Fields at Kukatpally, shares in Cyberabad Hi-Tech Integrated Township Development Corporation Pvt Ltd. Among these, the value of five acres of land at Durgam Cheruvu is more than Rs 400 crore while the 11-acre land in Miyapur is estimated to be Rs 200 crore. The value of 35 acres in Shamirpet is worth Rs 200 crore. Other assets like shares are also valuable.
It is noteworthy that the banks are ready to waive the confiscation of all these for only Rs 477 crore. If the common man takes a loan to buy a house and fails to pay the instalments, the matter would be announced in the newspapers and the property would be auctioned off to retrieve the money. If the same procedure is followed in the case of Indu by auctioning other collateral assets separately, there will be no impact on the interest and loans given by the banks. However, the banks themselves should know why they had not taken that route.
Indu Projects debt log
Bank and debt (In crores)
SBI Rs 996.62 crore
IDBI Rs 803.10 crore
Edelweiss Asset Reconstruction Rs 451.46 crore
Bank of India Rs 339.91 crore
Syndicate Bank Rs 217.18 crore
Punjab National Bank Rs 223.33 crore
Canara Bank Rs 196.70 crore
Indian Overseas Bank Rs 243.87 crore
UCO Bank Rs 193.77 crore
Central Bank of India Rs 125.32 crore
Andhra Bank Rs 151.65 crore
REI Rs 246.98 crore
Total Rs 4189.95 crore
Operational expenses Rs 291.34 crore
Banks that have loaned out such a huge amount will get only Rs 500 crore through the bankruptcy process. Out of that, Rs 23 crore goes to other proceedings, leaving the actual amount reaching the banks at Rs 477 crore. This shows the extent of loss the banks have to bear in the bankruptcy process. It is clear that the banks have accepted the bankruptcy process completely ignoring the value of existing assets.
And the company that gets these lands cheaply also belongs to the family of the current Chief Minister YS Jaganmohan Reddy of Andhra Pradesh. Jagan is closely related to Ravindranath Reddy, father of Naren Ramanjula Reddy, who joined Erthin as a Director. Now his son has joined as the Director at Earthin Projects, and is acquiring the Lepakshi lands for a cheaper rate. Moreover, Earthin Projects is a very ordinary company. The company’s total assets for the financial year ending March 2021 were only Rs 4.49 crore while its business capacity is only Rs 21.92 crore. It is not that difficult to understand the level of encouragement and support of the elders behind such a company becoming a participant in the bankruptcy process.
There is a strange situation in the state where the accused in the Lepakshi Knowledge Hub scam is the Chief Minister of the state itself. In this order, the Lepakshi lands were transferred from the ED to a private company and not to the government. According to a well-planned sketch, it happened that the Chief Minister’s uncle’s son joined as a Director. This is probably why the government, which is supposed to protect people’s property has completely neglected its responsibility.
