In a major development, the Andhra Pradesh Crime Investigation Department (CID) has filed an FIR against prominent individuals linked to the YSR Congress Party (YSRCP) over allegations of coercion and forced acquisition of shares in Kakinada Seaports Limited (KSPL). The case stems from a complaint filed by Karnati Venkateswara Rao, the Chairman and Managing Director (CMD) of KSPL, who alleged that the acquisition was orchestrated at the behest of former Andhra Pradesh Chief Minister Y S Jagan Mohan Reddy.
The FIR names three individuals—Y V Vikranth Reddy, V Vijayasai Reddy, and Sarath Chandra Reddy—as well as two firms: Aurobindo Realty and Infrastructure Pvt Ltd (now Auro Infra Pvt Ltd) and PKF Sridhar and Santhanam LLP. Rao has accused the leaders of forcibly acquiring 41.12% of KSPL’s shares, valued at ₹2,500 crore, for a fraction of their worth—₹494 crore—using threats and coercion.
Forcible Acquisition: Allegations Against YSRCP Leadership
According to the complaint, Venkateswara Rao alleges that the acquisition process began in May 2020, shortly after the YSRCP came to power in Andhra Pradesh. Rao claimed that V Vijayasai Reddy, a Rajya Sabha MP, initiated contact, stating that Vikranth Reddy would handle the acquisition of his shares in KSPL.
Rao further alleged that Vikranth informed him that the acquisition was not on Vikranth’s behalf but directly on behalf of then-Chief Minister Jagan Mohan Reddy. When Rao attempted to contact the Chief Minister to address the matter, he was denied access.
The complaint also accuses the state government of applying pressure tactics by falsely claiming that KSPL had underreported gross revenue, resulting in ₹965.65 crore in unpaid dues to the state between 2015 and 2019. Rao was allegedly threatened with criminal cases, vigilance inquiries, and even the arrest of his family members if he refused to part with his shares.
Undervalued Shares And Fabricated Reports
Rao claims that under immense pressure, he was forced to sell 41.12% of KSPL shares, valued at ₹2,500 crore, for a mere ₹494 crore. Additionally, 48.74% of shares in Kakinada SEZ—valued at ₹400 crore—were acquired for just ₹12 crore. Rao further alleged that another multinational conglomerate had offered ₹400 crore for the Kakinada SEZ shares, but the offer was disregarded.
The CID’s investigation will likely focus on allegations that fabricated audit reports, commissioned by PKF Sridhar and Santhanam LLP, were used to justify these undervaluations and create a pretext for coercion.
Alleged Role Of Aurobindo Realty
The shares acquired from Rao were allegedly transferred to Aurobindo Realty and Infrastructure Pvt Ltd, now renamed Auro Infra Pvt Ltd. However, B Adi Reddy, the Company Secretary of Aurobindo Pharma, issued a statement denying any connection between Aurobindo Pharma or its subsidiaries and the operations of Kakinada Seaports or Kakinada SEZ.
Rao, however, has maintained that the acquisition was executed with the direct involvement of Aurobindo Realty’s leadership. He alleged that the agreements were drafted by representatives appointed by Vikranth and that he was not informed about the beneficiary of the deal until after the agreements were finalized.
Rao’s Reluctance To File A Complaint Earlier
In his statement, Rao said that he refrained from filing a complaint earlier due to fear of harassment under the YSRCP government. He alleged that, with Jagan Mohan Reddy as Chief Minister until May 2023, any attempt to seek justice would have been futile and potentially dangerous for him and his family.
“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, and I would have been harassed. I am emboldened now that others who have faced similar situations are lodging complaints,” Rao explained.
Audit Tactics And Financial Intimidation
The complaint also describes the audit tactics allegedly used to corner KSPL. In November 2019, KSPL received a letter from the Andhra Pradesh government stating that PKF Sridhar and Santhanam LLP had been appointed to conduct a special audit of public-private partnership (PPP) ports for the financial years 2015 to 2019.
The audit concluded that KSPL had suppressed gross revenue, resulting in significant financial losses for the state government. Rao, however, dismissed the findings as fabricated, accusing the auditors of creating false records to justify demands for payment.
Kakinada Seaports And SEZ: A Legacy In Jeopardy
Kakinada Seaports Ltd (KSPL) was established in 1999 under an agreement with the Andhra Pradesh government to develop and operate the Kakinada Deep Water Port. Over the years, it became a critical infrastructure hub for the region.
Kakinada SEZ, formed in 2003, spans 8,320 acres in the East Godavari district. Rao alleged that after the coerced acquisition, Aurobindo Realty gained a 100% stake in the SEZ by also purchasing shares from the GMR Group, raising concerns about the monopolization of vital assets.
No Response From YSRCP Leaders
Repeated attempts to seek comments from the named individuals, including Vikranth Reddy, V Vijayasai Reddy, and Sarath Chandra Reddy, as well as YSRCP representatives, yielded no response.
This silence has further fueled speculation about the allegations, with opposition parties demanding transparency and accountability from the state’s leadership.
Implications And Next Steps
The allegations against YSRCP leaders have serious implications, not only for those directly involved but also for the political climate in Andhra Pradesh. The CID’s investigation will focus on verifying the claims made by Rao and assessing whether coercion and financial intimidation were indeed used to facilitate the acquisition.
If proven, the case could mark a turning point in Andhra politics, raising questions about the ethical practices of key leaders and their handling of public-private partnerships.
For now, all eyes are on the Andhra Pradesh CID as they delve into one of the most high-profile corporate-political cases in recent history.