Jaiprakash Associates says will challenge cancellation of land allotment by YEIDA

Yamuna Expressway Industrial Development Authority (YEIDA) has cancelled the land that was allotted by the authority in 2008 to Jaypee International Sports.

Jaiprakash Associates (JAL) on Tuesday said that it has received a letter from YEIDA conveying its decision to cancel the allotment of land given to Jaypee International Sports in an arbitrary manner and would contest the matter legally. Jaypee International Sports is a division of JAL, post its merger in October 2015.

JAL said that erstwhile Jaypee Sports International, which is now Jaypee International Sports, was allotted 1,085.33 hectares land by Taj Expressway Industrial Development Authority, now known as YEIDA for development of Formula One (F1) Race Track, other supports facilities and real estate in 2008 in terms of the publicly announced policy of Special Development Zone (SDZ) which contemplated setting up of SDZs with a particular core activity, sports in this case.

Out of the 1,085.33 hectares, lease deeds for 965.73 hectares have so far been executed by YEIDA, it said.

The company has since received a letter dated 12/2/2020 from Yamuna Expressway Industrial Development Authority (YEIDA) conveying its decision of having cancelled the allotment of land made by it in the year 2008 to erstwhile JPSK Sports Private Ltd (later renamed as Jaypee Sports International Ltd and now known as Jaypee International Sports, a division of the company, post merger of the same with JAL in October 2015), without affording any opportunity to the company and in arbitrary and illegal manner, it said.

JAL said that it has already paid Rs 1,179.57 crore against total consideration of Rs 1,659.25 crore for the said land, adding that it has also paid Rs 1,004.64 crore towards interest for delayed payments in terms of the allotment.

Further, as per JAL, in respect of the balance amount, YEIDA agreed to a reschedulement plan in May 2018, under which the dues were rescheduled and made payable through the mechanism of escrow account in instalments payable by May 2023 and the same is operational.

It said that YEIDA has without giving any opportunity to the company, conveyed its decision to cancel the allotment as well as the underlying lease deeds already executed.

YEIDA is yet to honour its part of various obligations under the terms of allotment, it said.

Shares of Jaiprakash Associates were locked in upper circuit limit of 10% at Rs 1.94 on BSE. In the past one month, the scrip slumped 11.81% to its current market price of Rs 1.94.

On a consolidated basis, Jaiprakash Associates reported net loss of Rs 834.07 crore in Q3 December 2019 compared with net loss of Rs 400.71 crore in Q3 December 2018. Net sales declined 19.1% to Rs 2,078.24 crore in Q3 December 2019 over Q3 December 2018.

Jaiprakash Associates' principal business activities include engineering, construction and real estate development and manufacture of cement. Its segments include construction, which includes civil engineering construction/engineering, procurement and construction (EPC) contracts/expressway.

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