n the previous part, we were talking about the corruption allegations on Nageshwara Rao and his involvement. In a note submitted to the Cabinet, the Finance Department of the TN government insisted that the portion of the premium price shall be shared with the state government, as the relaxation of this condition will fetch a higher price for the said land. The note stipulated that ‘therefore, as a pre-condition to the permission to grant of the NOC, the government may insist that out of the sale proceeds, an appropriate premium should be paid to the Government/SIDCO for lifting the rights to enable the deployment of the funds for the development of the MSME sector’.
But, the word “appropriate premium price” was mysteriously missing in the follow-up order issued granting the NOC. Sources say that the Finance Department raised a red flag about this omission but to no avail. In the secret note sent to the CM, it has been mentioned that Finance Department has specifically mentioned that an appropriate percentage of share on the premium price will be decided by the MS&ME department depending on the rights foregone. Hence the MS&ME department should be determined with the benchmark price to decide premium value to share it with the state government. But the Cabinet Note was prepared without indicating the benchmark price or percentage of share on the premium price shall be shared with the state government. In the Cabinet meeting, it was decided to fix this share as 10 per cent. There was no other modification suggested in the Cabinet meeting. However, in the Minutes of the Cabinet Meeting, this has been altered as 10 per cent of the share on the surplus of the land value after meeting the loan, instead of 10 per cent of the premium price fetched on such disposal.
This secret Finance Department note wonders why a decision taken in the Cabinet meeting was specifically altered.
Highly placed sources revealed that the conspiracy to confer the prime land of 11.021 acres at Guindy was hatched by the former Chief Secretary R Rama Mohana Rao and executed by his lieutenants Niranjan Mardi IAS and Hans Raj Verma IAS. Hans Raj Verma IAS was the then Chairman, SIDCO and Niranjan Mardi IAS was the then MS&ME Secretary. It was Niranjan Mardi, who specifically changed the wording different from the one actually in the Cabinet decision and the subsequent NOC issued. On March 7, 2013, the consortium of the Banks headed by the State Bank of India, conducts a meeting along with other stakeholding banks. The meeting was presided over by Leon Therattil, Deputy General Manager and officials of SBI, Pegasus, HTL participated. N Ramadoss, Chief Manager of SBI, reported in the meeting that four prospective buyers are readily available and the sale can be closed quickly. It was also decided in the meeting not to go for open auction and close the sale as a private treaty. It was resolved in the meeting that all offers should be finalised by 2 pm on March 15, 2013. It was also resolved to accept offers that are more than Rs 250 crores. It is pertinent to note that the upset price of Rs 250 crores is being decided in 2013, whereas the price offered by RMZ Millenia in 2007 was Rs 298 crores. On March 15, 2013, the offers received in sealed cover were opened in the presence of the SBI officials. As per the minutes of this meeting, only one offer was received from M/s VGN Developers private limited for Rs 272 crores. There was no whisper about the four offers readily available as told by Ramadoss, Chief Manager. The meeting, in which VGN representatives also attended, unanimously resolved to accept the offer of VGN. Even after the government issued an NOC allowing the HTL Limited to convert the land proposed to be sold to residential purposes, no open auction was adopted and instead, the land was sold in a private treaty.
The land in question was a high-value property. The land has a permissible built-up space of 2.5 times of the land area. Since the land has been reclassified from ‘industrial’ to ‘residential’, the market value of the land would be more than the guideline value fixed by the government. Further, the land is situated in Guindy, which has locational advantages, nearby airport, metro connectivity, etc.
As per the advertisement placed in newspapers at that time for a realty project just near to the land of VGN in dispute, the asking price was Rs 12,000 per square feet. As per the government records, the guideline value of the land is as follows:
April 1, 2003, to July 31, 2007 — Rs 2,200
August 1, 2007, to April 31, 2012 — Rs 4,600
From April 1, 2012 — Rs 8,500
This guideline value is for a land, which is classified as ‘Industrial’ under SIDCO Industrial Estate, under Industries Special Type I. The conversion as ‘Residential’ should have shot up the guideline value too; however, the sale price was finalised far below the market/guideline value. The consortium of banks headed by the SBI had fixed the reserve price for the said land at Rs 250 crores and finalised the deal on June 19, 2013, for Rs 272 crores. But as per the registration department records, the guideline value of the said land comes to Rs 376.26 crores on the date the sale was finalised. The VGN Developers Private Limited paid stamp duty for Rs 376.26 crores and not for the actual sale price of Rs 272 crores.
On the same day the deal was finalised, the VGN Developers mortgaged the property to IL&FS Trust company for Rs 280 crores. While it is the normal banking standard to pay 80 per cent of the mortgaged property value as a loan, the VGN purchased a property for Rs 272 crores and mortgaged the same for Rs 280 crores. The entire transaction smelt of a huge scam and after a detailed investigation, a story was published in www.savukkuonline.com on November 17, 2014.
The connected documents were also passed on to the CBI officials for further action at their end. But after dragging its feet for more than 18 months, the CBI finally on December 28, 2016, registered an FIR against (1) Leon Therattil, DGM, SBI, (2) Ramadoss, Chief Manager, SBI, (3) D P Gupta, Chief Operating Officer HTL, (4) D Prathish, Managing Director, VGN Developers.
(This is the second part of the editorial and the third portion will continue tomorrow.)
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