AP seeking details of loans secured by Krishnapatnam Infratech

The Andhra Pradesh government has reportedly requested the Centre to conduct a probe into the "fraud" committed by Krishnapatnam Infratech Private Limited in obtaining loans of Rs 1,900 crore from various banks and diverting the money for "other purposes."A top official, speaking on condition of anonymity, said the state government is also obtaining details from banks on the loans they disbursed, mortgaging government allotted lands to different organisations for industrial development in the last few years.As several banks were involved, the state government is said to have sought a probe by Central agencies to establish the complicity, if any, of the lenders, according to the official.The Andhra Pradesh government on October 19 cancelled the allotment of 4731.15 acres to Krishnapatnam Infratech Private Limited for setting up a multi-product special economic zone in SPS Nellore district as the promoter failed even after 10 years to get even a basic notification for it."It brings out the malicious intent of KIPL of taking huge extent of land on the pretext of MPSEZ and using these lands as cash cows for its promoters other business needs while keeping the lands vacant and idle, depriving the local communities from utilizing the lands for their needs," the order said.Most of the money has been used for its promoters personal business purposes and no amount of the loan drawn by KIPL was spent towards development of MPSEZ, it added.Highly placed officials sources said the Andhra Pradesh Industrial Infrastructure Corporation detected KIPLs fraud back in the year 2016 and reported it to the state government.The APIIC Board passed a unanimous resolution requesting the state government to initiate criminal action against KIPL promoters for committing the fraud by illicitly mortgaging government-allotted lands with banks and securing hundreds of crores in loans, but not utilizing the money for specified purposes."... but nothing happened," the top official told PTI."The fraud angle is obvious. KIPL mortgaged 200 acres of the proposed SEZ land and obtained Rs 200 crore from ICICI Bank for Machilipatnam Port Limited. Another 1222 acres was mortgaged for a Rs 250 crore loan from Central Bank of India for Krishnapatnam Port Company," the official pointed out.While Krishnapatnam was a port in operation, Machilipatnam Port was never developed.APIIC got a performance audit conducted on KIPL and found that loans taken from banks, by pledging the proposed SEZ land, were not used for the specified purposes."The (Navayuga) Group Companies got loans many times over and above the money invested in KIPL and utilized (it) for their own use, other than for the development of SEZ. This was also confirmed by the Balance Sheet of KIPL," a top official of APIIC revealed.He said the financial institutions that extended loans never sought a no-objection certificate (NOC) from APIIC despite it being a clear responsibility while using the lands as collateral."It only shows they (banks) knowingly and wilfully disregarded the covenants and conditions governing the transfer of land. Only one financial institution approached us for an NOC and we duly declined," he added.Against this background, Chief Minister Y S Jagan Mohan Reddy issued clear instructions to the authorities concerned to pursue the case vigorously from the fraud angle and possibly initiate criminal action where warranted, the official added.

AP seeking details of loans secured by Krishnapatnam Infratech

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