FIR Against Aurobindo Pharma Official, Others for Alleged Rs 3,600 Crore Share Acquisition Scam
Vijayawada: The non-executive director of Aurobindo Pharma, Penaka Sarathchandra Reddy has come under scrutiny by the Crime Investigation Department (CID) of Andhra Pradesh along with several prominent figures for alleged forced acquisition of shares in Kakinada Seaports Limited (KSPL) and Kakinada SEZ, valued at Rs 3,600 crore, during the tenure of the previous YSRCP government.
The CID has issued a lookout circular (LOC) for Penaka along with YSRCP MP Vijayasai Reddy, and Vikrant Reddy, the son of MP Y.V. Subba Reddy, preventing the individuals from leaving the country as part of an ongoing investigation into a case filed under various sections of the Indian Penal Code, including extortion, cheating, forgery, and other offences.
According to a recent media report in the Times of India, the investigation focuses on claims that KV Rao, a Hyderabad-based businessman, was coerced into transferring his majority shareholding in these entities to Aurobindo Pharma, under threat of criminal action.
As per the FIR filed by CID, the MP and his associates are accused of orchestrating a series of actions aimed at gaining control of these valuable assets through intimidation and manipulation. The complaint, lodged by KV Rao, alleges that audits were manipulated, reports forged, and political power was leveraged to force him into selling his shares in KSPL and KSEZ at highly undervalued prices.
Rao claims that the “systematic pressure,” which included fabricated audits, was endorsed by then Chief Minister Y.S. Jagan Mohan Reddy. Between 2014 and 2019, special audits conducted by PKF Sridhar & Santhanam LLP and KROLL India allegedly fabricated findings of revenue suppression amounting to Rs 965.65 crore, which formed the basis for the coercive actions taken against him.
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The CID investigation reveals that in May 2020, Vikrant Reddy and Sarathchandra Reddy approached Rao and demanded that he sell his shares in KSPL and KSEZ, threatening him with criminal cases and harm to his other business interests if he refused. Rao alleges he was forced to sell his 41.12% stake in KSPL, valued at an estimated Rs 2,500 crore, for just Rs 494 crore. Likewise, his family's stake in KSEZ, worth Rs 1,109 crore, was “acquired” for a mere Rs 12 crore. Rao asserts that these actions were carried out under the directions of Chief Minister Jagan Mohan Reddy.
Meanwhile, Vikrant Reddy, a primary accused in the case, has moved the High Court seeking anticipatory bail. TOI reports that in his petition, Vikrant argued that he has nothing to do with the alleged offence and has been "unjustly implicated" in the FIR with an "ulterior motive" as he is the son of an MP and relative of a former CM. The allegations levelled against him and other accused are based on a "fabricated and exaggerated narrative", he stated in his plea.
