Geography Reference
In-Depth Information
receiving favours in return. 52 The documents allege that Jagan and his father created 49
dummy companies around the country to launder the money they received in bribes. 'The
modus operandi was very simple: investors favoured with land allocations in exchange for
their buying shares of the dummy companies at exorbitant premiums fixed by Jagan and
Co,' says the TDP website, 53 quoting a First Information Report (FIR) filed by the CBI.
The CAG said in its annual report in March 2011 that a total of 88,500 acres of land was
allotted on an ad hoc and arbitrary manner to private parties, 'depriving the state revenue of
nearly Rs 1 lakh crore (Rs 1bn)'. Among the companies named were Vanpic, Obulapuram
Mining and Aurobindo Pharma, all of which were already being investigated in Jagan's
cases. 'Alienation and allotment of land by the state government during 2006-11 was char-
acterized by grave irregularities, involving allotment on an ad hoc, arbitrary and discretion-
ary manner to private persons/entities at very low rates, without safeguarding the financial
and socio-economic interests of the state,' said the CAG. 'The rates proposed at differ-
ent established levels of the government hierarchy were disregarded and substantial bene-
fits were unduly granted to private parties. Audit scrutiny revealed that in the test-checked
cases, undue benefit of Rs 1,784 crore was given to various entities and persons due to the
difference in the rates at which land was allotted and the market value as recommended by
the district collector and empowered committee. In many cases of land allotment, the state
government ignored the prescribed procedures and disregarded canons of financial propri-
ety.'
In 2012, a 28,000-acre ports and industrial zone development in the state's Guntur and
Prakasam districts called Vanpic (Vadarevu and Nizampatnam ports) became the main fo-
cus of inquiries by the CBI, which said it was 'nothing but a criminal conspiracy to loot
the public assets in order to help private parties'. 54 Vanpic was promoted by Nimmagadda
Prasad, a businessman, through one of his group companies, Matrix Enport. Prasad's ori-
ginal business was Matrix Labs, a prominent pharmaceutical company that was acquired
by Mylan Labs of the US in 2006-07. Known locally as 'Matrix Prasad', he has interests
in media and is chairman of Maa Television.
In addition to generous tax concessions, the government committed in 2008 to give Van-
pic an excessive amount of land totalling some 18,000 acres, according to the CAG, 55 al-
legedly in return for Prasad investing $300-400m in Jagan's businesses including Sakshi.
Investors in Vanpic, besides the Andhra government and Matrix Enport, included Ras Al
Khaimah (RAK), one of the United Arab Emirates. (RAK also obtained controversial rights
along with the state's mining corporation and a branch of the Jindal family business group,
one of India's largest steel producers, to mine for bauxite in a protected tribal area, the
Araku Valley, where only state agencies are allowed to work 56 ). Prasad was jailed in 2012
while inquiries continued. In March 2013, CBI counsel alleged in court that, between 2006
and 2009, the government had provided assets worth Rs 17,000 crore for Vanpic ports, an
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