Telangana govt raised Rs 10k crore via bonds by showing 400 acres of land as 'pre collateral': Minister

Hyderabad: Telangana Industrial Infrastructure Corporation has raised nearly Rs 10,000 crore by issuing through a private placement of senior secured taxable redeemable, non-convertible debentures from the market by showing 400 acres of land adjacent to University of Hyderabad as "pre collateral", Industries Minister D Sridhar Babu said on Saturday.

Addressing a press conference, the minister said the bonds, which are rated and listed in exchanges, carry a coupon rate of 9.35 per cent and Rs 8,476 crore deposited in TGIIC account through the sale of bonds.

He also said the proceeds were spent towards welfare schemes, including farm loan waiver (Rs 2,146 crore), Rythu Bharosa (Rs 5,443 crore) and bonus for cultivating fine variety of rice (Rs 947 crore).

"As many as 37 organisations, including some international and mutual funds, invested in those bonds. There was an escrow account in ICICI Bank, Rs 9,995 crore was raised with 9.35 per cent (annual interest)," Babu said.

Dismissing the allegations made by BRS Working President Rama Rao that ICICI Bank violated RBI nomes and extended loan to the state government, the minister said the private bank never gave any loan to the government but just maintained an escrow account for the bonds.

"I am once again clarifying that the ICICI Bank did not give us any loan. And the land (400 acres) is not under litigation. The Supreme Court has given a judgement on it. The 400 acres land belongs to the state government," Babu asserted.

Demanding an inquiry by Central agencies such as the RBI, CBI or Serious Fraud Investigation Office (SFIO), into the irregularities of alleged mortgage of 400 acres of land, Rao had alleged that the land did not belong to TGIIC and hence was not entitled to mortgage it.

However, Minister Babu said the land will be transferred to TGIIC through Government Order after the state cabinet clearance.

The Congress Minister hit out at the BRS leader, saying he was trying to mislead the public on the issue.

The rate of interest for the bonds is 9.35 per cent whereas the previous BRS government raised loans for the Kaleshwaram project at the rate of 10.9 per cent from banks and other institutions, Babu alleged.

He also dismissed the allegation that there was undervaluation of the land saying it was assessed by a reputed organisation.

The Telangana government's plan to develop the 400 acres of land in Kancha Gachibowli here to create IT infrastructure has sparked protests by UoH Students' Union.

BRS and BJP also opposed the government’s decision.

The matter is now being heard in the Telangana High Court and the Supreme Court. Petitioners in the HC are alleging that the flora and fauna of the area will be adversely impacted by the Congress government in the state.