Kakinada port scandal: K.V. Rao lodges complaint with CID against three individuals, including Vijayasai Reddy, and two firms 

Former KSPL CMD K.V. Rao accuses ARIPL and others of coercive acquisition, leading to a ₹3,000 crore fraud.

Karnati Venkateswara Rao alias K.V. Rao, former CMD of Kakinada Seaports Limited (KSPL) which is in the eye of a storm over the allegations of coercive acquisition of his share in Kakinada Deep Water Port (KDWP) by Aurobindo Realty & Infrastructure Pvt. Ltd. (ARIPL), lodged a complaint to that effect with the CID Director General Ravi Shankar Ayyanar against three individuals and two companies on Monday accusing them of robbing his family-owned enterprise Kakinada Infrastructure Holdings Pvt. Ltd. (KIHPL) of its 41.12% share in KSPL. 

By doing so, Mr. Venkateswara Rao set the stage for a formal inquiry into the role of the accused — Rajya Sabha member V. Vijayasai Reddy, and his son-in-law Sarath Chandra Reddy, and Y. Vikranth Reddy (son of Y.V. Subba Reddy) and auditing firm PKF Sridhar & Santhanam LLP. and ARIPL. 

Mr. Rao stated that though the offence occurred between May, 2020 and February, 2021, he could not file the complaint earlier because Y.S. Jagan Mohan Reddy was the Chief Minister at that time, and that the value of properties involved in it was about ₹3,000 crore. 

He claimed that KSPL was used as a cash cow for funding projects that belonged to the accused, and trouble started after the YSR Congress Party came to power in 2019. KSPL had since not received cooperation from the Directors of the Port and AP Maritime Board in the conduct of its operations. 

It was in May 2020 that Mr. Vijayasai Reddy entered into the picture and then came in the other accused, with ‘a demand of nearly ₹1,000 crore towards the revenue share of the Government of A.P.’. 

Things went from bad to worse as a concerted plan to take over the shareholdings of KSPL and Kakinada SEZ limited (in which KIHPL, Veda Infra Projects Pvt. Ltd. and Mr. Rao in his personal capacity together owned 48.84% share and the rest by GMR SEZ & Ports Holdings Ltd.) was implemented by appointing auditors for special/forensic audits, which found non-existent suppression of gross revenue and led to the raising of a demand of approximately ₹966 crore with the help of fabricated documents. 

Mr. Venkateswara Rao complained that he was thereafter forced to sign agreements which facilitated the transfer of shares in favour of M/s Aurobindo Realty & Infrastructure in the due course, under the threat of his arrest and his family members. It was a huge fraud in which KIHPL was deprived of its assets worth ₹2,500 crore for just ₹494 crore and KSEZ of its assets valued at ₹1,109 crore for merely ₹12 crore, he added.