The case against Lokesh: What Andhra CID said in its memo to the ACB Court on alleged Amaravati IRR scam

In 1992, Naidu (A1) and six others incorporated a company named Heritage Foods (India) Limited. Two years later, it went floated a public issue to raise funds. Its shares are listed in the Bombay Stock Exchange (BSE). In 2013, the company’s name was changed to Heritage Foods Limited.

Lokesh (A14) acted as a whole-time director of Heritage Foods Limited from 1 July, 2008, to 29 June, 2013. He was also the non-executive director from 29 June, 2013, to 31 March, 2017.

The memo claims Lokesh was a major individual shareholder, having 23,66,400 shares (10.2 percent) in his name.

Nara Bhuvaneswari, Lokesh’s mother and vice-chairman and managing director of the company, owned 53,30,826 (22.98 percent) shares. Nara Brahmani, Lokesh’s wife, held 1,01,000 shares. Shares were also held by close friends and relatives.

The name of actor-politician Nandamuri Balakrishna, with 6,820 shares, figures in the CID memo.

About the controlling interests of the company, the memo claimed: “…the key management decisions were taken by A14 in tacit compliance with the directions of A1. A1 for all purposes is the beneficial owner of the assets and financials of A6 Company operating through A14.”

South First View: Chandrababu Naidu’s narrowing options

Link to IRR project

The memo claimed to establish a direct link between the Nara family’s interests in Heritage Foods and the IRR project.

“It has also come to light that any important decision taken by the Government while A1 was the Chief Minister such as, location of a project, alignment of a road, grant of a contract, was only to accommodate the family interests and the interests of the party workers belonging to TDP,” the memo said.

A serious charge against Lokesh the memo makes relates to his prior knowledge about the ring road project.

The memo said: “In the instant case, the sequence of events disclose that A14 was privy to the preparatory decision-making of the Government in regard to the finalisation of the Master Plan and alignment of the Inner Ring Road. A14’s complicity is clear in the larger conspiracy of the decision-making process leading to the alignment of the IRR (inner ring road). In any event, as the Director of A6 Company, he was involved in the larger conspiracy, being the son of the Chief Minister and being the principal beneficiary on behalf of the A6 Company — he being the alter-ego of A6.”

According to the memo, by the time the IRR project came about, the Nara family had controlling interest in Heritage Foods Limited, had the powers to appoint the board, and approvals to make land purchases in the name of the company.

Related: With Naidu in jail, Pawan Kalyan announces Jana Sena-TDP alliance

The modus operandi

The CID claimed to know the modus operandi of the Naras.

It said the family was “equipped” with “information that the Capital for the successor state of Andhra Pradesh is going to be selected in and around Tadepalli, Thulluru, and Mangalagiri mandals area”.

The next step was to buy land. Under Lokesh’s control, the company (A6) secured a resolution passed by the board on 1 July, 2014, to purchase “land belonging to Smt. Movva Srilakshmi, resident of Karanam Street, Patamata, Vijayawada, Krishna District, to an extent of Ac.7.21 cents for a total consideration of ₹8 lakh per acre excluding registration and other incidental charges.”

On 7 July that year, the sale transpired. On 30 July, the company’s board ratified the transaction.

The memo claimed the board subsequently wanted to purchase three additional parcels of land “abutting the lands previously purchased”. Lokesh “played a crucial role to get the land on the name of Heritage Foods Limited” from the owners, the memo claimed.

Andhra Potboiler: Naidu’s arrest sparks battle for 2024; but who will benefit?

Mutually beneficial

Then comes the matter of mutual benefit. One of the land transactions had a curious fallout.

The CID memo claimed to throw light on the close relationship between one of the sellers of the land parcels and the Nara family.

According to the CID memo: “Lingamaneni Ramesh had nexus with the then CM of AP (A1) by offering his Guest House, beside River Krishna, at H. No 3-781/1, Karakatta Road, Undavalli Village, Tadepalli Mandal, Guntur District, for the residence of the then CM Sri N.Chandra Babu Naidu (A-1) on free of cost basis. The tailor-made primary alignment of IRR also caused benefits to the lands of Lingamaneni by way of windfall gain to their lands which came to be adjacent to the IRR.”

The next step, allegedly, was to distance both parties from each other.

The memo claimed that to avoid the chance of anyone noticing the above sequence of events making an inference about a “prior existing conspiracy”, on 22 September, 2014, “the Board of Directors of Heritage Foods Limited resolved to cancel sale deeds related to Acres 4.55 cents of executed by Lingamaneni Infocity Pvt Ltd., and LEPL Projects Ltd and accordingly, on 07.10.2014 the sale deeds related to Ac.4.55 cents of Lingamanenis were cancelled.…”

The memo said a perusal of the resolutions passed by the Heritage board made it “quite evident that Sri Nara Lokesh (A14) and his company were acquainted with A-3, A-4 and their companies, and the locations of their lands”.

Crux of the operation

Now comes the crux of the alleged operation.

The memo claimed that the services of some staff of the Andhra Pradesh Capital Region Development Authority (APCRDA) were used and “the Master Planner was made to change the IRR alignment to suit the needs of the A3, A4 and their companies/entities and M/s Heritage Foods Limited at the instance of A-1, A2 and A-14 and others”.

Here comes the charge and who, according to the CID memo, is responsible: “This resulted in huge wrongful gain to the lands of the accused A3 & A4 as the alignment was shifted 2- 3 kilometres southwards, nearer to the lands of Lingamanenis.

“The changed alignment also benefited the land of 10.68 acres held by M/s Heritage Foods. To suit the requirements of the accused A1, A2, A3, A4 and A14 the changed alignment was shared with the Master Planner before notification and finally, the Master Plan was notified along with the tentative alignment of IRR.”

The internal transaction between the two families allegedly benefitted Chandrababu Naidu (A1) in one more way, the memo claimed: “A1 appropriated the house of A3 on free of cost basis, as a quid-pro-quo / illegal gratification, for causing huge wrongful gains to A3, A4 and their entities, by framing the IRR alignment adjacent to the lands of A3, A4 and their entities.”

The conspiracy

So, what is the conspiracy the CID memo accused Lokesh (A14) of?

In its own words: “Thus, after the acquisition of the above lands, A14 in prior conspiracy with the public servants, notably A1, organised the decision-making on the IRR alignment, so as to avoid the passing through of the IRR through their lands, thereby protecting their lands from forcible land acquisition…”

The memo said that with the alignment being made so close to their lands, the price of their lands went up, reaping profits for the owners.

The CID memo described the final conspiracy in these words: “It clearly transpires therefore that A1 in prior criminal conspiracy with A14 operating to benefit the family interests comprised in A6 company, abused his official position to confer pecuniary advantage for himself through A14 eventually, in the form of purchase of lands by A6. A14, by the said transaction is also the principal beneficiary of the change in IRR and was intended to be one of the principal beneficiaries as part of the family concerns of A1 through A6 entity.”

The accused are charged with “abusing their official position” to “obtain wrongful pecuniary gains”.

The CID registered the case on a complaint by YSRCP leader and Mangalagiri MLA Alla Ramakrishna Reddy this April. The preliminary inquiry report was ready in May.