Emaar MGF refutes APIIC charges

Emaar MGF, one of the respondents in the integrated township-cum golf course project case, has refuted all the charges levelled against itself and the parent company Emaar Properties.

A writ petition against Emaar is currently being heard by the Andhra Pradesh High Court and the allegations are being investigated by the Central Bureau of Investigation (CBI) through a court order.

The company has filed a counter affidavit in the High Court stating that neither the writ petition is maintainable nor the court’s order is binding as the same was passed even before the respondent was impleaded and is liable to be cancelled.

It may be recalled that the state-owned Andhra Pradesh Industrial Infrastructure Corporation (APIIC), which holds 26 per cent in the three special purpose vehicles that were set up in joint venture with Emaar Properties PJSC, Dubai, for developing the integrated project along with the Hitex international convention centre in a total area of 525 acres here, has charged the partner with violation of agreements resulting in reduction of its equity and a loss to the state exchequer.

The high court admitted the writ petition based on a letter written by state textiles minister P Shankar Rao early this year and subsequently the APIIC filed an affidavit largely in support of his contentions.

The state agency told the court that Emaar MGF was brought in as the developer of the township project by Emaar Hills Township Private Limited (EHTPL), one of the SPVs, without its knowledge and in contravention of the original agreement only for the purpose of siphoning the money from the project covering 258 acres.

Both the minister and the APIIC maintained that the plots in the project were sold at just Rs 5,000 per square yard even though the registration value was about Rs 12,000 and the market rate was Rs 60,000. The project was to be developed from internal accruals but Emaar MGF was made the developer of the project thereby reducing APIIC’s equity to a mere 6.5 per cent from 26 per cent, the APIIC alleged.

In its counter affidavit, the company said it had so far invested Rs 405 crore and at this stage it was not open to anyone, including APIIC or the government, to say that it has no authority to enter into the said agreements or carry on construction. There is no cause for any inquiry by agencies like the CBI as the disputes are of civil nature, the company said while terming the APIIC’s claim that its stake had fallen to 6.5 per cent as not true.

“APIIC’s stake in EHTPL as on date is 26 per cent. The contra allegations are made with oblique motives and with malafide intention,” the affidavit said. The company has also refuted the allegations that it had collected Rs 25,000 per square yard from the buyers separately.