As the ED and Andhra Pradesh CID intensify their investigation, Aurobindo Infra, facing forcible acquisition claims, has reportedly backed down and agreed to return the shares to their original owner, according to port sources
Published Jan 22, 2025 | 3:44 PM ⚊ Updated Jan 22, 2025 | 3:44 PM
Kakinada port (kakinadaseaports.in)
The forced acquisition of shares of value of ₹3,609 of Kakinada Seaport and SEZ when the YSRCP was in power, has now taken a new turn. As the Enforcement Directorate (ED) and Andhra Pradesh CID tightened their investigation into the case, Aurobindo Infra, which has been facing forcible acquisition allegations, has reportedly stepped back.
According to port sources, the company has agreed to return the shares to their original owner. This development is believed to be the result of increasing legal pressure on those who were in key positions in the previous YSRCP government.
During the YSRCP government, shares were forcibly transferred. After the NDA came to power, Kakinada Seaports former chairman KV Rao filed a complaint with the CID, which led to ED’s involvement, marking a critical turn in the case. Aurobindo Infra has now agreed to return the shares it had previously taken from Rao under duress.
The ED has conducted an in-depth investigation into money laundering. The key questions, such as the source of ₹494 crore paid to KV Rao and the accounts from which the payments were made, have reportedly yielded significant information.
There are concerns that ED actions could damage Aurobindo Infra’s reputation, prompting the reversal of the Kakinada Port deal due to potential severe consequences. ED officials confirmed the company violated regulations in the transaction.
Meanwhile, the Andhra Pradesh CID, acting on KV Rao’s complaint, has gathered key evidence, including threats, falsified audit reports, and the involvement of influential figures. The CID’s findings suggest these individuals played a role in forcing a compromise.
KV Rao alleged that in May 2020, YSRCP MP Vijay Sai Reddy instructed him over the phone to meet Vikranth Reddy, the son of YV Subba Reddy, regarding the Kakinada Sea-Port Limited (KSPL) issue. Vikranth Reddy allegedly threatened KV Rao, stating that KSPL owed ₹1,000 crore to the Andhra Pradesh government as per a special audit report.
KV Rao claimed that he explained to Vikranth Reddy, how auditors fabricated records and presented a false report. However, he was pressurised to transfer his 50 percent stake in KSPL and 48.74 percent stake in Kakinada SEZ to individuals named by the YSRCP leaders.
According to KV Rao, when he refused, he was threatened with criminal cases, vigilance inquiries, arrests, and imprisonment. Reports suggest that high-level individuals mediated the deal, leading Aurobindo Infra to agree to return the shares and withdraw the ₹494 crore payment previously made.
Under Chief Minister Jagan Mohan Reddy’s tenure, shares in Kakinada SEZ (₹2,500 crore) and Kakinada seaport (₹1,109 crore) were allegedly acquired for ₹494 crore and ₹12 crore, respectively, totaling ₹3,609 crore for just ₹506 crore.
The deal has now been partially reversed, focusing on Kakinada sea port, while Aurobindo Infra agreed to retrieve the funds it had paid.
KV Rao, once a major stakeholder in Kakinada SEZ, is fighting to reclaim his shares from Aurobindo Infra. However, corporate experts believe that even if the shares are returned, the ED cases involving threats, false audit reports, and money laundering will likely proceed. Both parties must recognise that the law does not allow such cases to be bypassed. It remains to be seen what actions ED and CID will take next in this issue.
(Edited by Ananya Rao)
