The corporate feud between Mantri Developers and Navabharat Group of Industries has exposed the irregularities in the jinxed 250-acre Brahmani IT SEZ near the international airport on the city’s outskirts. The Navabharat Group is a major stakeholder in Brahmani Infratech, which is one of the three Special Economic Zones of 250 acre each, given away by the government of Y.S. Rajasekhar Reddy on nomination basis. The other two belong to Raheja and Indu. Incidentally, all three are non-starters because of the recession, claim the developers.
Brahmani Infratech is being probed by the CBI for alleged illegal investments in Kadapa MP Y.S. Jagan Mohan Reddy’s companies. Brahmani Infratech inked a joint development agreement with Mantri in February 2008 according to which the latter would develop both SEZ and non-SEZ area of about 4.5 million sft built-up space. Mantri is entitled to “convey” (sell) 70 per cent of the residential area and 72 per cent of the IT space.
Sources told this newspaper that this kind of arrangement is not in the knowledge of the government. The government did not know of this arrangement. “The original developer can only enter into technical collaborations and development agreements, but in this case the agreement seems to have covered commercial aspects also,” a senior official pointed out. Recently, Brahmani served a notice to Mantri terminating the agreement. It blamed Mantri for delaying the project. According to sources, Brahmani terminated the contract after the top brass in the government warned the company against cancelling the entire project.
Mantri countered by issuing a notice to Brahmani invoking a clause of the Arbitration and Conciliation Act 1996. The fallout of this bad blood between the companies is Mantri’s startling revelations about the fund flow into Brahmani, which Mantri itself admitted to have done without the knowledge of the government. Mantri said its partner obtained a security deposit of Rs 30 crore from it (Mantri) of which Rs 10 crore was diverted to Navabharat. Mantri also claimed that it has spent Rs 10 crore so far on the development of the project.
Accusing Brahmani of attempting to “gain illegal income”, Mantri in its notice said “the illegal collection of huge sums (by Brahmani) is not at all within the knowledge of the government.”
Brahmani has urged the government to extend the deadline to complete the project to 2021.