It has been an eventful week for Andhra Pradesh. Early this week, a top industrialist and investor Nimmagadda Prasad was reportedly taken into custody by the Serbian police in Belgrade.
Midweek, the Enforcement Directorate released properties of AP Chief Minister YS Jagan Mohan Reddy that were attached a few years ago in the infamous quid pro quo case.
As the week wound down, the Andhra Pradesh government took Navayuga Infrastructure off the multi-crore Polavaram Irrigation Project. By a strange coincidence all the three involved have had a link in the not too distant past. Nimmagadda Prasad shot to fame in 2006 when he sold his pharma company Matrix to Mylan. Thereafter, with shrewd investments in diverse sectors, he turned a major player in the State’s business scene. This brought him close to Jagan, then a rising star. As for Matrix Prasad’s arrest, reports are that it was done on a complaint by Ras Al Khaimah, a joint venture partner in the Vodarevu-Nizampatnam Port and Industrial Corridor (Vanpic) project. This project was approved when the late YS Rajasekhara Reddy was Chief Minister of United AP during 2004-09.
Vanpic was formed in 2008 with the AP Government signing an MoU with the Ras Al Khaimah Investment Authority (51 per cent) and Prasad’s Matrix Exports Holdings Pvt Ltd. as the Indian partner holding the rest of the stake. Vanpic acquired thousands of acres in Guntur and Prakasam from farmers and locals with the objective of developing two minor ports in the two districts and a 25,000-acre industrial cluster.
In 2011, the Navayuga Group entered the project as a strategic partner picking up 40 per cent in Prasad’s firm, ostensibly based on its experience in developing the Krishnapatnam port. It picked another 25 per cent from Ras Al Khaimah.
Not only did the project not make much progress, worse it landed Prasad in a Hyderabad prison for his alleged quid pro quo investments in companies floated by Jagan, now CM of AP and the son of Rajasekhara Reddy. After YSR’s death in 2009, the CBI filed cases against Jagan’s business dealings. Besides suffering losses, Ras Al Khaimah is said to have got entangled in legal cases. Navayuga exited Vanpic in 2012, selling its 65 per cent stake to Ras Al Khaimah in a move to distance itself from the CBI cases and Jagan.
After the bifurcation of Andhra Pradesh in 2014, N Chandrababu Naidu came to power in AP. He started the execution of the over ₹50,000-crore Polavaram irrigation project. Navayuga Engineering Company was awarded three contracts totalling nearly ₹3,000 crore in 2018. Jagan, who was the opposition leader, has consistently charged Naidu with ‘favouritism and scams’ in Polavaram implementation. He promised to review all contracts, including Naidu’s dream capital city Amaravati project, if voted to power.
In April 2019, Jagan swept the Assembly elections. After being sworn in CM on May 30, he has gone about systematically implementing his electoral promises. Consequently, on Thursday, the AP Water Resources Department issued a pre-termination notice to Navayuga Engineering. It was based on the recommendation of an expert committee set up in June. Even as Navayuga got eclipsed, Sun came out for Jagan. On July 31, in a major relief, the Appellate Tribunal for Prevention of Money Laundering Act (PMLA) directed the Enforcement Directorate (ED), to release the assets of Jagan and his wife Bharathi that were attached in a money laundering case. The assets worth ₹746 crore include ₹569 crore of Jagan and his group, ₹22.31 crore of Bharathi and ₹154 crore of Bharathi Cements Corporation Private Limited (BCCL). It’s no secret that politics and business go hand-in-hand. In the relief to Jagan, political observers see the BJP hand.
More to come
The BJP has been stepping up its game in Telangana and AP with an eye on the 2023 elections. In AP, it wants to replace the TDP at least as the main opposition party. It has already won over four TDP Rajya Sabha members. With the YSR Congress, which is going after Naidu and the TDP, the BJP has a supportive relationship.
The political analysts see the developments this week as a precursor to a lot more coming.