Andhra Pradesh Industrial Infrastructure Corporation Ltd also known as APIIC is an Andhra Pradesh Government initiative for providing infrastructure through development of industrial areas.
APIIC was established in the year 1973 for identifying and developing potential growth centres in the State fully equipped with developed plots/sheds, roads, drainage, water, power and other infrastructural facilities; providing social infrastructure, like housing for workers near industrial zones; co-ordinating with the agencies concerned for providing communication, transport and other facilities. The Corporation also has active projects in the Public-Private Partnership Mode.
APIIC Tower going to be the signature building of Hyderabad a 100-storeyed trade tower that will house corporates, star hotels and even entertainment theatres.
The Government has earmarked a 97-acre (390,000 m2) site to the Andhra Pradesh Industrial Infrastructure Corporation (APIIC) for the proposed trade tower to be constructed at Manchirevula near Narsingi, in the Business District. According to APIIC Chairman S.Siva Rama Subramanyam, who recently led a three-member corporation team to Kuala Lumpur, Malaysia, to study the famed ‘Petronas Towers’ there, the modalities of the project were being worked out. After the initial expression of interest, global tenders were expected to be called in in a couple of months.
He said the Government was keen to have the APIIC Tower completed in a couple of years by the time the Hyderabad International Airport at Shamshabad and the elevated expressway corridor would be ready.
The APIIC tower could either be a joint venture or with the APIIC as an equity partner, the modalities of which were yet to be worked out with consultants. He said a consultant, Fortune Capitals had been mandated to work out the plan. The APIIC was keen to start the work at the earliest in the next fiscal.
APIIC has been embroiled in a controversy over land acquisition for the Boulder Hills project in Hyderabad, a joint venture with EMAAR-MGF (also see EMAAR). News reports suggest that the APIIC agreed to dilute the public stake by undervaluing the land that it contributed. About 500 acres (2.0 km2) of land was acquired by APIIC in 2002-2003 for setting up a golf course and residential properties. Of the 535 acres (2.17 km2) of land in Manikonda near the Indian School of Business, APIIC sold 285 acres (1.15 km2) at 27 lakhs per acre as against the prevailing price of 1 crore per acre in 2003. The remaining 235 acres (and an additional 15 acres (61,000 m2) of unusable land) were allotted as a 66 year lease with a 2% share of the Golf course revenues. EMAAR sold this project to EMAAR-MGF and diluted the value of APIIC’s stake from 26% to 4%, by not considering the prevailing market rate for the land in 2009.
Multiple claimants to the land have emerged, including the WAKF board and the previous farmer owners of this land. The customers who have paid for properties in the developed project are in jeopardy due to the unclear land title. On the back of the controversial Boulder Hills deal with EMAAR-MGF, several other APIIC projects, including the Raheja Mindspace IT park, that were approved in the period between 2003 and 2009 are being questioned. There are allegations of irregularities in land deals during the Chief Ministership of Y.S. Rajasekhara Reddy.
There are also allegations that government officials were allocated parcels of the property at deeply discounted prices compared to the prevailing market price. Officials who previously ran APIIC and seem to have conflicts of interest with the developers, have refuted many of these allegations and defended earlier land allotment decisions.
There have been several calls for a thorough investigation into APIIC deals either by the CBI or by the state investigative agency CID. Though there were initial reports of an external audit, the calls for a CBI enquiry were downplayed by the Andhra Pradesh Government, which has initiated an internal APIIC probe.
Government activity after the scam
Andhra Pradesh government on 4th February suspended senior IAS officer and Principal Secretary (Home) B P Acharya who was arrested by CBI in connection with a scam relating to an township project here.
The state government said the 1983-batch IAS officer was placed under suspension following his detention for over 48 hours in the APIIC- Emaar scam.
According to the government order, “Acharya is under suspension with effect from January 30 2011, the date on which he was detained. He shall continue to be under suspension until further orders.” Acharya, former Chairman and Managing Director of Andhra Pradesh Industrial Infrastructure Corporation (APIIC), is accused by CBI of having entered into a criminal conspiracy with officials of Emaar Group and unnamed public servants to cheat APIIC and secure wrongful gains to Dubai-based infrastructure firm Emaar.
During the period of suspension, Acharya’s headquarters will be Hyderabad, which he cannot leave without the government permission, the order said. As per All India Services (Discipline and Appeal) Rules, a member of the Service, who is detained in official custody, on a criminal charge or otherwise, for over 48 hours, he or she would be deemed to have been suspended
What the Emaar scam is all about
On the orders of the AP High Court following a petition filed by Congress MLA P Shankar Rao, the CBI filed an FIR on August 17, 2011, against BP Acharya, directors of Emaar Properties, Dubai, Emaar Hills Township Pvt Ltd, Emaar-MGF Land Pvt Ltd, directors of Stylish Homes real Estate Pvt Ltd, unknown public servants of AP government, and others and charged them with criminal conspiracy, cheating, criminal breach of trust, showing forged documents as genuine under the Prevention of Corruption Act.
The allegation is that BP Acharya and others named in the FIR entered into a criminal conspiracy to cheat APIIC during 2005-2010, and towards that end, Emaar Properties, Dubai, and Emaar Hills Township Pvt Ltd entered into an agreement with Stylish Homes to sell villa plots at pre-determined prices which was less than the market value and without the knowledge or consent of the APIIC board. Further, the CBI alleged that Emaar Hills Township assigned the rights of development to Emaar-MGF without in-principle approval of APIIC.
The joint venture between APIIC and Emaar Properties, Dubai, was to develop an integrated project consisting of golf course, club house, boutique, hotel, township, on 535 acres of land at Manikonda on the outskirts of Hyderabad in Ranga Reddy district besides a business hotel and convention centre on adjoining leased land. While APIIC’s stake in the Manikonda project was 26%, the same in the convention centre was 49%.
According to the CBI, while the GOs mandated that only Emaar Properties, Dubai, should execute the project, the MoUs signed between APIIC and Emaar later inserted a clause regarding assignment of rights towards development, management and operation of the project by the developer to a third party.
Subsequently, in April 2005, Emaar Properties, Dubai, assigned the project to three other firms, Emaar Hills Township Pvt Ltd, Boulder Hills Leisure Pvt Ltd and Cyberabad Convention Centre Pvt Ltd. Emaar Properties also entered into an agreement with Stylish Homes represented by its director T Ranga Rao, who, on behalf of Emaar Hills Township, was to sell plots and residential units in the project at Rs 5,000 per sq yard for which the latter was entitled to 4% commission on the sale value.
According to the CBI, Stylish Homes collected excess amounts in cash ranging from Rs 5,000 to Rs 50,000 per sq yd from villa plot buyers. In all, Stylish Homes sold 105 villa plots and pocketed at least Rs 95 crore over and above the documented rate of Rs 5,000 per sq.yd and deprived APIIC of its due share in the revenue generated by the sale of villa plots. In the meantime, the stake of APIIC was reduced both in the Emaar Hills Township and the convention centre projects, the CBI has charged.
Incidentally, CBI’s efforts in the case was facilitated by an inquiry in the matter earlier by the vigilance and enforcement department of the AP government then headed by Dinesh Reddy who is now the director general of police. The V&E report had unraveled the scandal and exposed the nexus.
CBI filed its chargesheet against seven persons including Andhra Pradesh home secretary and senior IAS officer B P Acharya and five companies in the case relating to alleged irregularities in land transfer and sale of villas and apartments in an upscale township in Hyderabad.
The chargesheet was filed before the special CBI court in Hyderabad under IPC sections relating to criminal conspiracy, cheating, criminal breach of trust among others and relevant sections of Prevention of Corruption Act.
Besides Acharya, CBI has named executive officer, Tirumala Tirupati Devasthanam(TTD) L V Subrahmanyam, who was the then vice-chairman and MD, APIIC, the then Secretary (Industries) K V Rao (now retired), private persons Koneru Rajendra Prasad, Srikant Joshi, Madhu Koneru and T Ranga Rao.
The companies booked by CBI included Dubai-based Emaar Properties PJSC, Hyderabad-based Emmar Hills Township Pvt Ltd, Emaar MGF Land Ltd, Stylish Homes Real Estates Pvt Ltd and Boulder Hills Leisure Pvt Ltd, CBI sources said.
“The public servants had abused their respective official positions and facilitated the private Real Estate Companies to sell the Villas, Plots at exorbitant rates to the buyers, remitting only the documented sale consideration to a Hyderabad-based Real Estate Company, and allegedly swindling away with the unaccounted extra sale consideration received in cash,” CBI spokesperson Dharini Mishra said in New Delhi.
Replying to a query, joint director CBI V V Lakshmi Narayana said in Hyderabad they had already sought permission for sanction of prosecution against the two IAS officers — Acharya and Subrahmanyam and another retired IAS official K V Rao named in the chargesheet.
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