Photo: Chandra Babu laying foundation stone for fraud IMGB company
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Not many people of this generation know how corrupt Chadra Babu Naidu is. Several corruption scandals happened during his nine years rule. But, a friendly vernacular media suppressed many of these.
The largest of Naidu’s scams was the land allotment to a fake company called IMGB, when Naidu was a caretaker Chief Minister in August 2003. His government sold 850 Acres of prime land to IMGB for a paltry sum of 4.25 Crores. Naidu also leased out 7 stadia to this fake company for a period of 45 years – again for a negligible lease amount.
It is a deal that has not only raised many eyebrows but also reeks of a major scandal.
In 2005 August, acting on an Andhra Pradesh High Court directive, the court for Anti-Corruption Bureau in Hyderabad slapped notices on Naidu, two of his former cabinet colleagues and a few officials in this controversial land allotment case.
IMGB was incorporated on August 5, 2003, with a share capital of Rs.5 lakh, the only stakeholders in the company being brothers Ahobala “Billy” Rao and Prabhakar “Pat” Rao, both known to Naidu. Six months later on February 10, 2004, the sale deed was executed and Naidu laid the foundation stone for the project the very next day.
Any sane person would ask how the state government allotted land worth Rs.850 crore to a company having a paid-up capital of only Rs.5 lakh and does not even have a office.
Photo: The conspiracy hatched by Billy Rao and Babu resulted in a major scam
Chandra Babu Naidu offered the land for Rs.4.25 crore. The memorandum of understanding grants extraordinary rights to IMGB and puts unrealistic responsibilities on the state government. Besides, the MOU provides for the government to sell another five acres along the road leading from Banjara Hills to Cyber Towers at “reasonable rates” to enable IMGB put up its “international-class headquarters”.
The Naidu government offered to lease seven stadia, built by the government at a cost of Rs.116.4 crore, to IMGB for 45 years. It has also granted IMGB the right to buy these properties by factoring in costs, which decrease with the passage of time.
The MOU lists many responsibilities on the Andhra Pradesh government:
– Compensating costs incurred by IMGB for city promotion up to Rs.2.3 crore a year for five years.
– Guarantee to pay for the training of 50 people at a fee 25 per cent less than the prescribed charges.
– Persuade the Centre to waive customs and all other duties and taxes on all equipment IMGB may import.
– Extend to it all concessions and incentives provided by the state government to the educational institutions.
– Assure high-quality power supply and potable water to IMGB free of cost for the first three years and at 25 per cent discount for the next four years.
– Ensure that there will be no entertainment tax for 10 years on any of the events held by IMGB at the stadia.
After Chandra Babu lost the 2004 election, the Congress goverment took up steps to take back possession of the land given to IMGB
What is shocking is how Ahobila Rao’s IMGB claimed fraudulently that it is the Indian arm of Florida-based reputed sports management company IMG.
Equally significant is the fact that there is no mention of IMGB being a subsidiary of the IMG in its Memorandum of Association or Articles of Association.Even the so called parent company has 120 acres in Florida, while the ‘subsidiary’ was given 850 acres.
The fact that Ahobila Rao brothers also run BHC Agro (India) Limited, which took up the task of implementing a modern agriculture project in Kuppam, Chandra Babu Naidu’s assembly constituency, speaks volumes about the ‘connections’ they have with Naidu.
[With inputs from India Today]