MP says no scam in leasing KMF land to firm he has invested in

The office of Rajya Sabha MP Rajeev Chandrasekhar has said no scam was involved in the leasing out of land of the Karnataka Milk Federation to a firm in which he was an investor.

Chandrasekar's office said that the MP chairs the board of Jupiter Capital in a non-executive capacity. The statement was in reaction to the story in DH about the KMF land in Koramangala in Bengaluru. The statement, issued by senior manager communications, office of Chandrasekhar, said he    was not a member of the boards that manage any of the investee companies of Jupiter Capital.

"Rajeev Chandrasekhar chairs the board of Jupiter Capital in a non-executive capacity. Jupiter Capital is a financial investor that has invested in and continues to invest in many ventures. These financial investments are in public listed companies and private companies.''

It stated that he held the majority of shares but did not interfere in the administration of these companies.

"Chandrasekhar is not a member of the boards that manage any of these investee companies. Each company in which financial investments are made, are separate entities and as per law are managed by separate independent boards and professional managements. All financial investments of Jupiter Capital are made after proper due diligence. This is how all mature private equity and financial investment companies function, that is, as limited liability companies. Therefore, to suggest that Chandrasekhar exerts any management influence on any of Jupiter Capital's investee companies would be mala fide, false and defamatory.''

The statement said PVK Koramangala entered into a joint development agreement with Mantri Habitats Private Limited to build the commercial complex and that the concession agreement and the lease deed executed by KMF permitted PVK Koramangala to enter into such joint development transactions.

"The commercial complex is nearing completion. The KMF has always received lease rentals in accordance with the concession agreement and the lease deed, which is to the tune approximately of Rs 1.6 crore per annum.

The KMF will receive rentals throughout the lease period and at the end of the lease period, the commercial complex worth hundreds of crores of rupees will be transferred entirely and free of cost to KMF," the release stated (according to the lease deed executed by the KMF in favour of PVK Koramangala, the KMF would get a quarterly rent of Rs 35 lakh after completion of the commercial complex).

DH response

This paper had reported how PVK Koramangala obtained two acres and 14 guntas from KMF on lease.

After this, PVK Koramangala entered into an agreement with Mantri, keeping KMF in the dark.

 Between them, Mantri Habitats and PVK Koramangala raised Rs 165 crore in loans mortgaging the land. While Mantri pledged 56% of its share for construction, PVK Koramangala pledged the land for repayment of unsecured loans and for other business requirements.

DH looked at documents accessed from the ministry of corporate affairs to track PVK Koramangala to Jupiter Capital.

The Anti Corruption Bureau is now out to pin responsibility on KMF officials who allowed this transaction.

The ACB has filed an FIR and has sought vacation of a High Court stay to continue with its investigation.

DH stands by its reports.