Loot From Proximity
Koneru Prasad is accused of duping the state to the tune of Rs 4,310 crore
Koneru Prasad is accused of duping the state to the tune of Rs 4,310 crore.
Koneru Rajendra Prasad, the UAEbased founder-chairman and mentor of the $100 million Trimex Group, is accused, along with Emaar Properties, Dubai, and other linked companies, of causing the Andhra Pradesh government a loss of Rs 4,310 crore. Arrested by the CBI on November 3 in Hyderabad, Prasad is alleged to have spirited away huge sums of money from India to bank accounts abroad, in the process dealing a financial blow to Emaar Hills Township Private Limited ( EHTPL)— a joint venture of Emaar Properties, Dubai, a public joint stock company, and the state-owned Andhra Pradesh Industrial Infrastructure Corporation ( APIIC).
Prasad, 61, using his considerable clout with the government, is allegedly responsible for Emaar Properties getting the integrated residential and international convention centre project with a golf course, spread over 535 acres in Hyderabad, from APIIC in a steal of a deal. To start with, in 2003-04, Emaar was to have 74 per cent stake and APIIC 26 per cent in EHTPL by virtue of the land it offered for the project. All development costs were to be borne by Emaar Properties. Consequently, Emaar Properties incorporated a wholly owned subsidiary, Emaar Holdings, under the laws of Mauritius to start the project.
After Y.S. Rajasekhara Reddy replaced N. Chandrababu Naidu in May 2004 as chief minister, three distinct entities were instituted by Emaar Holdings and fresh deals entered into with APIIC in December 2005. Significantly, earlier in January 2005, Emaar Properties entered into an agency agreement with Stylish Homes Private Limited to market and promote the sale of villas, entitling it to 4 per cent of the sale value as commission. This was signed by a representative of Emaar Properties without the knowledge and consent of either EHTPL or APIIC. In 2006, the clandestine entry of another entity, Emaar- MGF, a joint venture between Emaar and the MGF Group registered in Delhi, to develop the EHTPL township whittled down APIIC’S stake to 6.5 per cent.
Prasad has been arrested for allegedly receiving money towards plots developed in the controversial EHTPL
KONERU PRASAD IN CBI CUSTODY(LEFT); AMODELOFTHE EMAAR HILLS TOWNSHIP
project from buyers after grossly undervaluing them. The allegation is that plots were sold for between Rs 10,000 and Rs 50,000 a square yard while on paper they were sold for Rs 5,000 a square yard. The Andhra Pradesh Directorate General of Vigilance and Enforcement has computed the loss to the state exchequer at Rs 4,310 crore by adding loss from undervalued sales, Rs 856 crore, to APIIC’S dilution of equity.
Prasad has been booked and slapped with various charges, including under the Prevention of Corruption Act.
The arrest was effected after CBI collected evidence against him which shows money paid by some buyers towards villa plots credited into bank accounts in his name. It has statements from two persons made in court that a large part of the money for the plots was to be paid in cash while the rest, including the 4 per cent commission, was to be remitted by cheque to the account of Prasad’s son, Koneru Madhu.
The CBI suspects that Prasad had entered into a criminal conspiracy with the Emaar group to cheat APIIC. The agency estimates his personal gains at Rs 150 crore. CBI says it has so far managed to track Rs 117 crore of the excess money collected by Prasad from the sale of villas.
In 2002, ‘Dubai Prasad’, as he is known, got Chandrababu Naidu of the TDP to agree to allow the Trimex Group into the real estate sector. This is a year after the group signed an MOU for a beach sand mining project. In 2003, APIIC reached an agreement with Emaar Properties, Dubai, to develop the Hyderabad project, with Prasad playing lobbyist. In 2004, Trimex Sands, a Prasad company, got a sand mining lease in Srikakulam district.
Few doubted Prasad’s credentials given his experience as an exporter based in Chennai since 1985. He managed to convince then Congress chief minister Rajasekhara Reddy about allowing investments from Ras Al Khaimah. “Both Reddy and Naidu have enjoyed Prasad’s hospitality and were impressed by his connections in UAE,” says an associate. Emaar failed to respond to specific queries raised by
INDIA TODAY but maintained that the project is being developed within APIIC and the state government’s defined parameters and regulations. The CBI special court in Hyderabad has granted Prasad interim bail for a week from November 16 to visit the Sabarimala shrine. But bail notwithstanding, Prasad’s good luck seems to have run out.
Advanced Management of Elections ( FAME), headed by former chief election commissioner J.M. Lyngdoh, that has been conducting IYC organisational elections across the country. “We have voice recordings of Rizwan’s cartel speaking to some Lok Sabha returning officers ( LRO) and assistant returning officers ( ARO) to work out how to rig the votes. They purchased the LROS and
AROS with cash and inducements,” says another disgruntled candidate. The “cartel” is said to include Arshad’s predecessor C. Krishna Byre Gowda, who is accused of “fixing” the election in an effort to keep control of the organisation. The ‘fixed’ LROS and AROS, who were IYC cadres from outside the state or FAME appointees, allegedly cast votes of absentee delegates, miscounted votes and threatened voter-delegates to support Arshad’s candidates.
In defence, an Arshad supporter says, “It is quite simple. All that is needed to win these elections is to get
ACTOR RAMYAWANTED TO CONTESTTHE PRESIDENTIAL POLLS AS A CONGRESS CANDIDATE BUT ARSHAD’S DETRACTORS SAY HIS SUPPORTERS SCARED HER AWAY.
the required number of people registered as voters. Those we register will vote for us. That is where we scored.” This “simple” strategy, however, involves spending money. Arshad’s group says they spent Rs 18 per new member while opponents claim he actually spent Rs 1,000 each. His expenses also involved touching each district at least thrice in the six-month run-up to the poll. “You cannot dismiss a common youth’s victory by attributing it to malpractices. It’s grassroots connect that got me elected,” Arshad told INDIA TODAY.
Priyank maintains that the election was just a “friendly fight”. “The good thing about this election is that no one really loses. I came second and have become vice-president. We will work as a team,” he says.