FIR against YSRCP MP, others for alleged 'coercive' means to acquire stakes in Kakinada port, KSEZ

Andhra police have registered a case against YSRCP Rajya Sabha MP V Vijaysai Reddy and Y Vikranth Reddy, son of another party member Y V Subba Reddy, for allegedly acquiring stakes in Kakinada Seaports Ltd (KSPL) and Kakinada SEZ (KSEZ) Ltd through "cheating, criminal intimidation, conspiracy" for a throwaway price in favour of Aurobindo Realty (since renamed as Auro Infra).

According to a complaint filed on Monday by Karnati Venkateswara Rao, Chairman and Managing Director of KSPL, his family-owned firm's stakes of 41.12 per cent in KSPL and 48.74 per cent in KSEZ estimated to be worth over Rs 3600 crore was acquired in 2020-21 for little over Rs 500 crore.

Besides Vijaysai and Vikranth, the FIR, registered by the Andhra Pradesh CID, also names Sarath Chandra Reddy (Non-executive director of Aurobindo Pharma Ltd) PKF Sridhar & Santhanam LLP and Aurobindo Realty and Infrastructure Pvt. Ltd, its Directors and others under sections related to "cheating, criminal intimidation, conspiracy" (Sections 506, 384, 420, l09, 467, 120(B) R/w 34 IPC and Sec. 111 BNS 2023).

The complaint also alleged that Vikranth Reddy, who approached Rao "asking" him to part with the shares, claimed that the "transaction was being done for former Chief Minister Y S Jagan Mohan Reddy".

Vijaysai Reddy, Vikranth Reddy and Saratchandra Reddy were not immediately available for comments despite repeated efforts by PTI to reach them. There was also no response from former chief minister Jagan Mohan Reddy or his office.

Meanwhile, Aurobindo Pharma in a filing with BSE on Thursday said the firm was in no way connected with the ownership or operations of Kakinada Seaports and Kakinada SEZ including Auro Infra Private Limited.

"In this regard, we would like to clarify that Aurobindo Pharma Limited or its subsidiaries are in no way connected with the ownership or operations of Kakinada Seaports Limited and Kakinada SEZ Limited including Auro Infra Private Limited," it said.

Rao alleged he was told that if he did not agree to the transfer of shares, then there would be a "spate of criminal cases and vigilance enquiries leading to his arrest and other family members".

"Then Mr Y Vikranth Reddy informed me that it is not him, that he is trying to acquire shares, but are being acquired by Mr Y S Jagan Mohan Reddy. If I do not agree for transfer of shares, then there will be a spate of criminal cases and vigilance enquiries leading to my arrest and other family members. I was also informed that they will pay me a nominal amount of money for the transfer of my shareholdings. All my efforts to convince them proved futile," Rao alleged in the police complaint.

The complaint said that as per the Concession Agreement, KSPL is liable to pay 22 per cent of the gross earnings, as revenue share to the State Government.

The YSRCP government after various audit reports concluded that the KSPL had to pay nearly Rs 1000 crore towards its revenue share which was vehemently unsuccessfully protested by Rao.

During the preparation of the share purchase agreements, Rao came to know that the shares in KSPL and KSEZ were being sold to the Aurobindo Realty and Infrastructure Private Limited (presently renamed as Auro Infra Private Limited).

On a conservative estimate, Rao claimed the value of his family stake in KSPL would be not less than Rs 2500 crore and the share in KSEZ was estimated to be Rs 1109 crore.

However, earlier the GMR Group offered Rs 400 crore to acquire his stake in KSEZ to which he agreed, given the KSEZ outstanding debts, operations of the company and the long-term relationship between GMR and KVR Groups (Rao’s family-owned firms).

After the signing of the agreements, Vikrant Reddy and Sarathchandra Reddy asked Rao to meet Jagan in Vijayawada, the complaint alleged.

"Accordingly, I went to Vijayawada and met Mr Vikrant Reddy, who had taken me to the house of Mr Y S Jaganmohana Reddy. In the meeting, Mr Vikrant Reddy explained the happenings. When I tried to protest, Mr Jagan Mohana Reddy didn't allow me to say anything, except asking me to follow what was said by Mr Vikranth Reddy. Thus it is clear that all this is done at the instance of Mr Jaganmohan Reddy," Rao's complaint alleged.