Andhra Pradesh CID files FIR against YSRCP leaders in alleged forced share transfer of Kakinada Seaports Ltd

Rao has accused Aurobindo Realty and Infrastructure Pvt Ltd of forcibly acquiring KSPL shares under the direction of former Andhra Pradesh Chief Minister Y S Jagan Mohan Reddy, reported Indian Express.

The complaint, filed by Hyderabad-based Rao at the CID police station in Mangalagiri on December 2, names three people and two firms.

The accused individuals include Y V Vikranth Reddy, who is the son of YSR Congress Party (YSRCP) Rajya Sabha MP Y V Subba Reddy; YSRCP MP V Vijayasai Reddy; Sarath Chandra Reddy, a director of Aurobindo Pharma.

The firms accused in the FIR are PKF Sridhar and Santhanam LLP; and Aurobindo Realty and Infrastructure Pvt Ltd (now renamed Auro Infra Pvt Ltd).

The Indian Express report said B Adi Reddy, the Company Secretary of Aurobindo Pharma, stated that the company is not connection with the alleged irregularities.

“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,” Reddy said, responding to Indian Express’s query.

Rao has alleged that 40% of KSPL, valued at  Rs 2,500 crore, was acquired for  Rs 494 crore through coercion and intimidation.

He also claimed that 49% of the Kakinada Special Economic Zone (SEZ), valued at  Rs 400 crore, was forcibly acquired for  Rs 12 crore, despite another multinational conglomerate offering  Rs 400 crore.

“This entire operation was planned and conducted to usurp my shareholding in KSPL and Kakinada SEZ and transfer the shares to Aurobindo group. They claimed that KSPL owed Rs 965.65 crore to the Government of Andhra Pradesh as KSPL had suppressed gross revenue, which is false, and threatened to file cases,” Rao alleged in the complaint, according to the report.

When contacted, Rao told Indian Express, “I was afraid to lodge a complaint because Jagan Mohan Reddy was the CM until May this year. My complaint would not have been taken, I would have been harassed, and there would have been no chance of getting any justice. I am emboldened now that others who have faced similar situations are lodging complaints.”

Rao also alleged in his complaint that in May 2020, Vijayasai Reddy informed him that Vikranth Reddy would contact him regarding the acquisition of KSPL shares.

“Vikranth claimed that it was not himself but Andhra CM Jagan Mohan Reddy who was acquiring the shares. I tried to contact the then CM but he did not meet despite best efforts,” Rao alleged, according to Indian Express.

Rao alleges that coercion began with accusations of KSPL suppressing gross revenue, causing a Rs 1,000 crore loss to the Andhra government between 2015 and 2019.

He claims that after the YSRCP came to power in 2019, KSPL faced operational non-cooperation from the Port/AP Maritime Board.

On November 13, 2019, the state government appointed PKP Sridhar and Santhanam LLP for a special audit of PPP ports and submit financial data from 2015–2019.

By May 2020, Rao claims Vikranth informed him that the audit alleged a  Rs 1,000 crore shortfall and that the state would raise a demand for  Rs 965.65 crore.

Rao alleges that he was pressured into agreements through a firm appointed by Vikranth, unaware of who the beneficiaries were.

He later discovered that shares in KSPL and KSEZ were being sold to Aurobindo Realty and Infrastructure Private Limited.

He claims the shares were undervalued at  Rs 494 crore for 41.12% of KSPL, significantly less than his valuation of  Rs 2,500 crore, but he was threatened and forced to sign.

Following the agreements, Rao was summoned to Vijayawada to meet Chief Minister Y S Jagan Mohan Reddy, where he claims the CM dismissed his protests and directed him to follow Vikranth's instructions.

In May 2020, he was also pressured to transfer a 48.74% stake in KSEZ for  Rs 12 crore to Aurobindo, which later acquired the remaining stake from GMR Group, becoming the sole shareholder in KSEZ.

Kakinada Seaports Ltd (KSPL), a concessionaire company registered under the Companies Act, entered into an agreement with the Andhra Pradesh government in March 1999 to invest in, develop, maintain, and operate the Kakinada Deep Water Port.

In 2003, Kakinada SEZ Ltd was established, acquiring 8,320 acres of land across the villages of Ponnada, Mulapeta, and Ramannakkapeta in East Godavari District for the development of a special economic zone. 

Commissioned in November 1997 with a quay length of 610 meters, the Kakinada Deep Water Port was privatized in 1999, with Kakinada Seaports Ltd assuming operations. By 2009, the port expanded to a 2,500-meter quay length, enabling multi-product handling and supporting offshore supplies for deep-sea exploration.

Strategically located, the port serves East and West Godavari, Krishna, Guntur, and the Telangana region, handling key cargoes like agricultural products, minerals, coal, and fertilizers. To accommodate growing traffic and evolving industry needs, Kakinada Seaports continues to implement robust expansion programs.