An investigation was initiated after KV Rao, Chairman of Kakinada Sea Ports Limited, filed a complaint with the Andhra Pradesh CID, alleging threats from Vikrant Reddy, acting on behalf of CM YS Jagan Mohan Reddy, to transfer his stake in KSPL
Published Dec 25, 2024 | 5:17 PM ⚊ Updated Dec 25, 2024 | 5:17 PM
Kakinada port (kakinadaseaports.in)
The Enforcement Directorate (ED) has intensified its investigation into the allegation that majority stakes in Kakinada Sea Ports Limited (KSPL) and Kakinada SEZ (Special Economic Zone) were forcibly acquired during the tenure of the YSRCP government.
The ED has already collected articles of evidence for the payment of ₹494 crore made by Aarohi Infra Private Limited (an Aurobindo company) to Kakinada Infrastructure Holdings Private Limited (KIHPL) for purchase of a 41.12 percent stake in KSPL.
The focus of the ED’s investigation is on allegations that Kakinada Ports and SEZ management were threatened to undersell their shares, a claim that was also reported to the CID.
On 4 December 2024, KV Rao, Chairman of Kakinada Sea Ports Limited, filed a complaint with the Andhra Pradesh CID, stating that he was threatened by Vikrant Reddy on behalf of the then Chief Minister YS Jagan Mohan Reddy to hand over his stake in KSPL.
Based on this complaint, the CID began investigating the transactions and records of Kakinada Ports, SEZ, and Aurobindo.
Rao alleged that between May 2020 and February 2021, these transactions were carried out under coercion and that after the change of the guard he hsa gathered courage to lodge a complaint.
Rao alleged that the shares in KSPL were undervalued through audit manipulations. The CID had said that it was investigating the role of the audit firm PKF Sridhar and Santhanam LLP.
Rao claimed that he was forced to sell SEZ shares for a mere ₹12 crores in October 2020, under threat of criminal cases, arrests, and vigilance inquiries against him and his family.
Aurobindo became a shareholder in Kakinada SEZ after acquiring the shares. Simultaneously, the GMR Group’s stake in the SEZ was also purchased by Aurobindo, making it the sole owner of 100 percent of the SEZ shares.
The ED has focused its investigation on the conspiracy to undervalue KSPL’s assets, facilitated by political pressure, and how this led to transactions at an unfair price.
CID registered cases against Vikrant Reddy, who is a YSRCP Rajya Sabha member, V Vijay Sai Reddy’s relative and Aurobindo representative, P Sarath Chandra Reddy, along with the audit firms and other accused parties.
The ED has issued notices to YSRCP MP Vijay Sai Reddy and his relative Sarath Chandra Reddy for questioning. Although they previously cited reasons to avoid appearing for the inquiry, they are now cooperating with the investigation agency.
KSPL reported revenues of ₹491.47 crores in 2014-15, which rose to₹ 628.71 crores in 2019-20. It also had ₹240 crores in cash reserves as of 2019-20.
Kakinada SEZ has approximately 8,320 acres of land in Pithapuram and Kothapalli mandals, with shares distributed between KIHPL and the KVR Group (48.74 percent) and the GMR Group holding the remaining shares.
Rao alleged that Vikrant Reddy informed him the shares were required for Chief Minister Jagan Mohan Reddy and threatened him with severe consequences if he did not comply.
Rao further claimed that he was coerced into signing documents for selling his shares, and that all SEZ shares were eventually acquired by Aurobindo.
The ED has now intensified its investigation into these transactions, focusing on alleged manipulation, threats, and undue political influence.
(Edited by Ananya Rao)
