Insider trading in Amaravati: Andhra CID asks Naidu to appear before it on March 23

The Andhra Pradesh Crime Investigation Department (CID) on Tuesday issued notice to former chief minister N Chandrababu Naidu to appear before it in connection with its investigation into alleged insider trading in Amaravati. CID officials visited Naidu’s residence in Hyderabad and served him the notice under Section 41 of the CrPC.

The CID also issued notice to Dr P Narayana, who was minister for Municipal Administration and Urban Development during the Telugu Desam Party (TDP) regime. The CID has asked both Naidu and Dr Narayana to appear for questioning on March 23.

TDP spokesperson B Umamaheshwara Rao said the YSRCP government was being vindictive and revengeful, and dismissed the allegations of insider trading.

The CID notices come two days after the ruling YSRCP swept the municipal elections.

The CID alleges that several TDP ministers, leaders and party members had prior information that a particular region between Krishna and Guntur districts would be declared as the new capital of the state, and that they purchased vast tracts of land at low prices.

It also alleges that once the Amaravati region was declared as the capital, land prices increased, thereby benefitting those who had purchased land.

The CID had filed at least 20 cases against TDP leaders and real estate developers close to the TDP, accusing them of being involved in insider trading.

However, on January 19 this year, the Andhra Pradesh High Court dismissed the insider trading cases, observing there was no evidence to indicate the same.

In June 2019, the Andhra government constituted a Cabinet Sub-Committee and entrusted it with the responsibility of verifying various allegations against the policies adopted, alleged acts of corruption, nepotism and pilferage of public funds, and submit a detailed report. The study of the new capital area — known as Amaravati capital region — conceptualised for the state was one of the subjects examined.

“The Cabinet Sub-Committee, after verifying government records, conclusively opined in its report submitted on December 12 last year, that public servants at the head of affairs in the erstwhile government misused and abused their official position to pre-determine the location of the new capital and subsequently purchased lands to unjustly and illegally benefit their associates, their companies and businesses, family members and/or political party members. The boundaries of the capital and its infrastructure were designed and modified to suit their personal interests. Further, the said officials in violation of their oaths, revealed the privileged information about capital city location to their associates,” an official said.

The report of the Cabinet Sub-Committee also found several irregularities and illegalities with respect to the procedures followed by the erstwhile government in acquiring land and offences committed by dispossessing landless poor of assigned lands by an elaborate conspiracy, forgery, fabrication of documents and tampering of records. These transactions were penal offences under the Indian Penal Code, the Prevention of Corruption Act, 1988, The Benami Transactions (Prohibition) Act, 1988, and Prevention of Money laundering Act, the report stated.

A Special Investigation Team (SIT) was constituted in this regard and it was notified as a police station with state wide jurisdiction. While examining the contents of the report of the Cabinet sub-committee and the investigation done by the Crime Branch of CID, it emerged that for the commission of the offences, funds were channelized by certain people living in states outside Andhra and even abroad.

On December 27, 2019, the Sub-Committee submitted its report and the YSRCP government accused Chandrababu Naidu, his son N Lokesh, and at least six other TDP leaders of insider trading and purchasing lands in an area in Guntur district which was declared as the capital city six months later. The report submitted by the Sub-Committee stated that “persons privy to the likely location of capital purchased lands in the capital city/region area just prior to a formal official declaration.”

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“Certain highly placed individuals procured land through benami transactions; defined the boundary of the capital area to benefit certain connected people, holding lands on the fringes; fraudulent surrender of some lands towards land pooling scheme to receive returnable plots; irregularities in land allotment; violation of provisions of AP Assigned Lands (Prohibition of Transfer) Act of 1977; and violation of provisions of SC/ST (Prevention of Atrocities) Act 1989,” the report stated.

“Certain individuals, having the white ration cards meant for the low-income families, acted as benamis and transacted in lands, in the capital city/region area on behalf of the original beneficiaries. A verification of registration records revealed that at least 4069.94 acres of land was purchased by persons privy to information of location of the capital and their suspected benamis, between June 1, 2014 and December 31, 2014,” the report said.

“The prominent persons involved in insider trading are Nara Chandrababu Naidu; Vemuru Ravi Kumar Prasad, NRI, close associate of Nara Lokesh; former minister Paritala Sunitha; former TDP MLA GVS Anjeneyulu; industrialist Lingamaneni Ramesh in whose guesthouse Naidu is living now as his official accommodation; TDP MLA Payavula Keshav, former TDP spokesperson Lanka Dinakar, TDP leaders Dhulipalla Narendra, Kambhampati Ramamohan Rao and Putta Mahesh Yadav,” it added.

“Lingamaneni Ramesh, purchased large parcels of land in his name, in the name of his wife L Sumana, his other relatives, L Prasanthi, L Swarnakumari. Ponguru Narayana, the then Minister for Municipal Administration and Urban Development, purchased land to the extent of 55.27 acres in the name of his benamis Avula Munisankar, Rapuru Sambasiva Rao, Potturi Prameela and Kothapu Varun Kumar. Kommalapati Sridhar, ex-TDP MLA, purchased lands to the extent of 68.6 acres of lands in the name of his suspected benami firm Abhinandana Housing Private Limited, Guntur. Prattipati Pulla Rao, the then TDP Minister purchased lands to the extent of 38.84 acres in the name of his benami Gummadi Suresh. Nara Lokesh, son of the former CM purchased lands to the extent of 62.77 acres in the name of his benami Vemuru Ravikumar Prasad and his business firms Future Space India Private Limited, Hyderabad, Goshpadi Green Fields Private Limited, Hyderabad and Future Trends Constructions and Infrastructure Ltd, Hyderabad. Former TDP Minister Ravela Kishore Babu, purchased lands to the extent of 40.85 acres in the name of his suspected benami firm Mythri Infra, Visakhapatnam. Late Kodela Siva Prasad, former Speaker of AP, purchased 17.13 acres in the name of his suspected benami firm M/S Sasi Infra,” the report said.

The report stated the members noticed two types of alleged manipulations. “Redesigning the boundaries of the Land Pooling Scheme area, such that the lands of the leaders of the TDP or their relatives fell right adjacent to the boundary of the land pooling. Redrawing the boundaries of Capital Region Develoment Authority (CRDA) to bring in the areas belonging to the leaders of the Telugu Desam Party in to the CRDA zone,” it found.

In September 15 last year, an FIR was lodged against former Advocate General of Andhra Pradesh Dammalapati Srinivas for allegedly purchasing lands in an area in Guntur district which came under the Amaravati capital region. The FIR alleged Srinivas and his family members were involved in an insider trading ring which had prior knowledge of the region which the TDP government would declare as the new state capital, and purchased large tracts of land in that region. The prices of the lands purchased by Srinivas’ family multiplied after their land came under the capital region, the FIR stated. The FIR was filed at the Anti-Corruption Bureau’s Guntur Police Station.

However, on January 19 this year, the High Court dismissed the cases filed by the CID accusing several persons of insider trading. The CID had filed a case against TDP Organising Secretary Kilaru Rajesh accusing him of heading the insider trading ring. Rajesh approached the High Court stating that YSRCP leaders had filed a false case.

In his petition, he stated that none of the land sellers filed a complaint. “The YSRCP government is making false claims and taking revenge against those who sold land in the Amaravati region, accusing them of being involved in the alleged insider trading,” he stated in his petition.

After hearing the petition, the High Court asserted that no insider trading took place, and added that no IPC sections will be applicable to it.