Former Chief Minister Jagan Mohan Reddy, a prominent leader of the YSR Congress Party (YSRCP), is facing serious allegations of illegal acquisition of shares in Kakinada Port.
The allegations were made in a formal complaint lodged by KV Rao, the chairman and managing director of Kakinada Seaports Limited, which led to the filing of a First Information Report (FIR) with the Andhra Pradesh Criminal Investigation Department (CID). The complaint implicates several individuals, including YSRCP MP Vijay Sai Reddy, Vikrant Reddy (son of MP YV Subba Reddy), and Sarath Chandra Reddy (a director at Aurobindo Pharma).
The allegations suggest that a 40% stake in Kakinada Port, valued at approximately Rs 2,500 crore, was acquired for a significantly lower price of Rs 494 crore. Similar concerns were raised regarding the acquisition of 49% of the Kakinada Special Economic Zone (SEZ), valued at Rs 400 crore, which was reportedly purchased for just Rs 12 crore despite a competing offer from GMR Group.
KV Rao, who has been involved in the development of Kakinada SEZ in partnership with GMR since 1999, holds a significant stake in the SEZ. The FIR alleges irregularities, including the suppression of gross revenue, which allegedly resulted in a loss of approximately Rs 1,000 crore in revenue share for the government between 2014-15 and 2018-19.
The timeline of events leading to the FIR indicates that MP Vijay Sai Reddy informed KV Rao that Vikrant Reddy would be in touch regarding the acquisition of the port shares. Vikrant Reddy confirmed that the shares were being acquired on behalf of Jagan Mohan Reddy, and they were ultimately transferred to Aurobindo Realty and Infrastructure, now operating as Auro Infra Private Limited.
These allegations have significant implications for the political landscape in Andhra Pradesh, particularly for the ruling YSR Congress Party. The credibility of Jagan Mohan Reddy and the party may be undermined, raising concerns among investors and stakeholders in the region. The allegations of accounting irregularities and financial discrepancies may also lead to broader investigations into the financial practices of the Kakinada Port and SEZ operations.
As the investigation progresses, the consequences for Jagan Mohan Reddy and the YSR Congress Party may extend beyond legal implications, affecting public perception and trust in governance. The political fallout from these allegations could also impact upcoming elections and the overall stability of the ruling party in Andhra Pradesh.