Hyderabad project: CBI chargesheet names Emaar MGF, 11 others

By: Kritika S.

Hyderabad, India : The Central Bureau of Investigation (CBI) today filed a 300-page chargesheet against Andhra Pradesh Home Secretary B P Acharya, Emaar MGF, represented by its managing director Shravan Gupta, Emaar PJSC-Dubai, represented by Md Ali Alabbar and nine other firms and individuals as part of its ongoing investigation into the alleged financial irregularities committed in Emaar Hills Township Project Limited (EHTPL). EHTPL is a joint venture promoted in association with the Andhra Pradesh Industrial Infrastructure Corporation (APIIC).

The CBI has named two more IAS officers apart from Acharya, who is already in its custody in the case.

It submitted 1,834 documents running into over 50,000 pages before the special court along with the chargesheet, including the statements of 286 witnesses.

CBI joint director V V Laxminarayana, who is heading the investigation, said they had sought court’s permission to file supplementary chargesheets in this case as the investigation progresses. The accused are charged under several sections of the Indian Penal Code and Prevention of Corruption Act.

The chargesheet, filed under sections 120B, 420, 109, 409, 477-A of IPC and also under various sections of the Prevention of Corruption Act, 1998, in connection with alleged irregularities in the sale of villas, plots and flats in the integrated project at Manikonda in Hyderabad, a CBI press release said.

The names of 12 accused in the order of A1 to A12 are: B P Acharya, Emaar PJSC -Dubai represented by Md Ali Alabbar, EHTPL, Emaar MGF represented by managing director Shravan Gupta, Stylish Holmes Private Limited, businessman Koneru Prasad, Emaar MGF CEO Srikant Joshi, Boulder Hills Leisure Private Limited, L V Subrahmanyam (IAS), K Vishweshwar Rao (IAS, retired), Koneru Madhu, son of Koneru Prasad, and T Rangarao, managing director of Stylish Holmes.

Emaar in a response said, “We shall review the contents of the chargesheet once and comment thereafter. We maintain that the Company continues to uphold the highest standards of corporate governance and follows the laws of the land. The company and its officials have faith in the judicial system and are confident that the group will be cleared of the charges and allegations.”

The names of G V Vijayraghav, finance head (south), Emaar MGF, and businessman Sunil Reddy, who were already under judicial custody in this case, have not figured in the chargesheet as the CBI officials said it would require more investigation into their roles before filing a chargesheet against them.

Boulder Hills, the second special purpose vehicle (SPV), responsible for developing a golf course, and boutique resort hotel among others on 235 acres, was also named in the chargesheet as it had transferred the development rights in favour of Emaar MGF, besides EHTPL.

These projects were to be implemented by Emaar PJSC through SPV 1 and SPV 2 according to the collaboration agreement executed in 2003 between Emaar and APIIC, the CBI said.

Acharya, Emaar Properties PJSC, EHTPL (the SPV for the 258-acre township project), Emaar MGF Land Private Limited, Stylish Holmes and others had allegedly entered into a criminal conspiracy to cheat APIIC in the JV projects proposed on 525.5 acres in Hyderabad, according to the remand report filed by the CBI in connection with the arrest of Vijayraghav.

Further, Emaar PJSC entered into an agreement with Stylish Holmes to sell villa plots at a predetermined price, which was less than the market value without the consent of APIIC board and also EHTPL assigned the rights of development to Emaar MGF without in principal approval from the board of APIIC.

The agreement with Stylish Holmes was to sell only first 30 villa plots at Rs 5,000 per square yard and the remaining (300 to 400 plots) were to be sold at the prevailing market rates. However, about 102 plots were sold by EHTPL through its marketing agency (Stylish Holmes) by collecting in excess of Rs 4,000 to Rs 45,000 per square yard but the sale consideration at the rate of Rs 5,000 was accounted for in the books of accounts of EHTPL, it said.

About 34 villa plots were sold by Emaar MGF of which, 16 plots were sold by Shravan Gupta, Srikant Joshi and Vijayraghav during 2009-2010 by collecting excess amount over and above the documented rate of Rs 5,000 per square yard. However, the amount accounted for in the books of Emaar MGF was only the sale consideration at the rate of Rs 5,000 per square yard, it said.

Coming down further on the top executives of Emaar MGF, the remand report alleged that Gupta, Joshi and Vijayraghav had blocked 18 villa plots in the name of 10 companies, incorporated with the names of employees of Emaar MGF as directors and shareholders, at Rs 5,000 per square yard when the prevalent market rates were around Rs 50,000 per square yard, according to CBI.

Though Emaar MGF was required to pass on 25 per cent of gross annual revenue to EHTPL it did not do so depriving APIIC of its legitimate revenue share, it said.