Centre asks MADC to explain favouritism in land allotment

Centre asks MADC to explain favouritism in land allotment

16 Jun 2009, 0638 hrs IST, Ashish Roy, TNN

NAGPUR: The Union ministry of corporate affairs has sought an explanation from Maharashtra Airport Development Company (MADC) regarding a complaint lodged by the Vidarbha Janandolan Samiti (VJAS). The samiti has alleged that there was favouritism by MADC in allotment of land to big companies, including allotment of land before it was acquired by MADC and causing loss to the exchequer by giving land at discounted prices.

MADC, a state government-run company, is developing Mihan and a special economic zone (SEZ) near the city. The assistant registrar of companies, Mumbai, has said in a notice sent to MADC that the complaint lodged by VJAS prima facie shows that "there is material indicative of violation of Companies Act, 1956."

The ministry has warned in the notice that if it does not receive a reply or if the reply received was not relevant to the points raised by the complainant, or was haphazard or evasive in nature, then it would have no option but to take legal action against the company and its directors.

VJAS president Kishor Tiwari has alleged that MADC exhibited favouritism in allotment of land to big companies. Many companies were given land at throwaway prices, thus causing huge loss to the public exchequer, Tiwari alleged. He also claimed that allotment of land was started before completion of the acquisition process, and land was 'reserved' for certain companies without following due process of law.

Tiwari has said that many of these companies also raised bank loans amounting to crores of rupees by showing ownership of land allotted by MADC, even though at that time MADC itself had not become the lawful owner of the land.

Incidentally, land in SEZ was allotted to First City project of Reatox Ltd, which was later disallowed by Ministry of Commerce.

VJAS claimed that most IT companies got land in the SEZ disproportionate to their requirements. Most IT companies do not need more than 20 hectares, however MADC allotted them between 50 and 350 hectares., Tiwari said.

Tiwari also charged MADC vice chairman and MD R C Sinha with joining the board of directors of Maytas Ltd, which was owned by a son of Satyam chief B Rama Raju. Satyam had been allotted 330 hectares by MADC. Many of the companies that received land from MADC too had started giving contracts to Maytas, said Tiwari. Sinha was also a director in Ambuja and Indu Projects, which were direct and indirect beneficiaries of Mihan project.

Tiwari alleged that MADC officials were working in collusion with political bigwigs of the region and the livelihood of hundreds of farmers had been destroyed by the company.

MADC vice chairman R C Sinha said that he would send a reply to the assistant registrar of companies when he receives a communication in this regard.