‘Sonrise’ in Tamil Nadu chief secy’s years at helm
On May 16, the day the J Jayalalithaa assumed office in Tamil Nadu’s capital after returning to power in 2011, P Rama Mohana Rao was appointed secretary in the Chief Minister’s Office.
Five years later, after she won the re-election, Rao was made the government’s chief secretary.
Between these two days, son Vivek Papisetty, now 34, who did not have a corporate footprint earlier, became the director of seven companies, show Union ministry of corporate affairs’ (MCA’s) filings. While he had since resigned one of those, he continues to be on the board of the others.
Logistics and staffing are the two key areas these entities have focused on. Many of these are based in Chennai’s Nandanam area, where the income tax (I-T) department conducted searches this week. The searches at around a dozen places in two states against the son and some relatives of Rao are said to have yielded a haul of ~18 lakh in cash and gold bars.
The I-T action was in connection with the case related to the biggest haul of new notes after demonetisation. This was after the department raided some sand mining operators of Tamil Nadu, including Tirumala Tirupati Desvasthanam trustee Shekar Reddy. The raids continued on Thursday in the offices of Papisetty and other locations.
Papisetty’s journey in the corporate sector started seven months after his father became the secretary of Jayalalithaa’s own office. He incorporated 3lok Infra and Logistics in neighbouring Karnataka in February 2012. He had 51 per cent in this company, which had a capital of ~1 lakh, with sister Abhinandana holding 49 per cent. The company had plans to take up infrastructure projects and run a transport business; it is yet to file a balance sheet. Another company the son floated was Swan Facility, in October 2013. As of Thursday, it had also not filed any accounts.
Papisetty then seems to have gone the inorganic way. Blue Ocean Personnel and Allied Services was floated by Arun Anbazhagan and two others with a capital of ~1 lakh in 2009. In November 2013, Papisetty bought 95 per cent stake and became a director. Anbazhagan, who held 60 per cent, was reduced to five per cent. In February 2015, Papisetty brought in further money, taking the paid-up capital to ~25 lakh. For the year ended March 2015, Blue Ocean had revenue of ~17.5 crore, on which it booked a profit of ~37.7 lakh. With Anbazhagan as a partner, he also got into the transport business. Trans Earth Logistics, incorporated in 2013, booked a profit of ~6.7 lakh in its first financial year ending March 2014, on revenue of ~6.3 crore. For a freight transport business started with a capital of ~9 lakh, of which Papisetty had 51 per cent stake, with Anbazhagan holding the rest, that was an impressive start.
It had also built an impressive client list. Trade receivables totalled ~2 crore. The debtors included Chennai Ferrous, GVR Infrastructures, OPG Power, Sri Pathy Associates, Suryadev Power, TG Logistics and Maximus Crushers. The following year, revenue doubled to ~12.5 crore but the company reported a loss of ~8.6 lakh.
Two other logistics companies have been floated since, Trans Earth Logistics Tech solutions and TEL Karaikal Logistics. Papisetty also became director of a company called SYS Two Analytics & Research (India) in February 2014 but ceased to hold that position a year later.