ACB seeking vacation of HC stay in KMF land scam case

The Anti-Corruption Bureau has registered an FIR in connection with the shocking Karnataka Milk Federation land scam.

Two private companies fraudulently claimed land belonging to KMF as their own and raised huge loans, DH reported on Monday.

The ACB, which had begun digging out details in August, put the investigation on hold following a high court stay in November.

It has now filed an interlocutory application, seeking vacation of the stay.

How it all began

KMF had leased out two acres to PVK Koramangala Development Pvt Ltd, a company linked to Rajeev Chandrasekhar, Rajya Sabha MP representing Karnataka. He is also the vice-chairman of the National Democratic Alliance in Kerala.

I R Ramalinge Gowda, the then managing director of KMF, had signed on the lease deed executed between KMF and PVK in 2008.

The government had granted the prime property, near the National Games Village in Koramangala, for a KMF office complex.

The government had granted four acres and 14 guntas to KMF in 1998.

Ten years later, in 2008, KMF leased out two acres and 16.74 guntas in Survey 5 and 5/1 to PVK, a company linked by a circuitous route to Chandrasekhar's Jupiter Capital.

PVK then entered into a joint development agreement (JDA) with Mantri Habitats in 2011, entrusting it with the construction of a commercial complex. It left KMF completely out of the deal.

Corruption case

In the FIR filed by the ACB, the officials are booked under the Prevention of Corruption Act and Section 420 (cheating) of the Indian Penal Code.

Sources said the role of the then executive engineer was being probed when Gowda moved the high court.

Sources in the ACB told DH the FIR was registered in August against the MD, the KMF board, and the then executive engineer of PWD (buildings).

Gowda contended before the high court that the police had registered a case after a "long delay" of 10 years.

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What will KMF do now?

KMF managing director Rakesh Singh said he had taken the matter seriously.

"We became aware of the developments when the FIR was registered. We will seek legal opinion about the joint development agreement and loans being raised on KMF property. We will take a decision in the best interests of the KMF," he told DH.

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How the swindle was pulled off

* Govt hands over 4+ acres in Koramangala to KMF

* KMF 'leases out' 2+ acres to MP Rajeev Chandrasekha's firm PVK

* PVK strikes deal with Mantri Habitats for Rs 9 crore

* PVK, Mantri fraudulently claim ownership of KMF land

* They mortgage KMF land, raise huge loans

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They got Rs 165 cr in loans
against fraudulent mortgage

In 2014, the Mantri group raised a loan of Rs 50 crore from Punjab National Bank by mortgaging KMF property.

How it was able to raise loans on land that it did not own is a mystery.

On January 4 this year, Mantri closed the loan account by paying off Rs 66 crore.

The same day, it got a loan of Rs 140 crore from Lakshmi Vilas Bank, against the 56% share it claims to enjoy in the commercial property coming up on KMF land.

Three months later, on March 17, PVK mortgaged KMF land to Lakshmi Vilas Bank, and raised a loan of Rs 25 crore.