Amaravati, May 12
The way Heritage Foods that belongs to former Chief Minister N Chandrababu Naidu’s family profited when he was in office will be case study for business schools in future. The Anti-Corruption Bureau (ACB) recently has brought to light the tip of the ice-berg which clearly illustrates the way Mr Naidu and his confidants have tried to systematically run the dairy sector into the ground for their benefit.
For the purpose of better administration milk producers’ unions were organised district-wise in the undivided Andhra Pradesh.
Sangam Diary of Guntur district was one of the most profitable of the milk unions. The AP Government established a feeder balancing dairy in Sangam Jagarlamudi, Guntur district in 1973. To begin win it was under the control of the Milk Commissioner, AP Dairy Development Corporation Limited (APDDCL) later the unit evolved into the Guntur District Milk Producers Cooperative Union Limited.
Just as the profits of Heritage Foods were linked to Telugu Desam leader and founder N Chandrababu Naidu being in office the profits were of the District Diaries in the state were all linked to the performance of Heritage Foods. The Dairy movement which drew inspiration from Amul and really flourished began to slowly perish once Heritage Foods came into the picture. Sangam Dairy was one of the most profitable district dairies in the state and it is now being dubbed to be in huge losses.
Heritage Foods was started in 1992 as a small milk powder manufacturing unit in Chittoor district, as Chandrababu Naidu one of its founders. Back then, he was already a key political figure who had served as a minister in Congress government and the rising star in Telugu Desam Party. After TDP came into power in 1994, Heritage successfully executed a public issue of Rs. 10 crore. The company also received quite a few tax incentives from the government. While the company profit was Rs. 6 crore in 2000, it grew to Rs. 17 crore by 2004- 05. However, the profits have come down once the party lost elections in 2004. In 2007, the company profit was mere Rs. 1.7 crore and then it had fallen into the red zone very quickly. In 2009, the company declared Rs. 35 crore net loss on the sales of Rs.794 crore. In 2012-13, the company earned only Rs. 9.3 crore on the sales of Rs. 1,393 crore. Meanwhile, the failure of the Congress government headed by Kiran Kumar Reddy became a boon for Chandrababu Naidu and Heritage. In a quid pro quo arrangement, Chandrababu Naidu extended support to the Kiran Kumar Reddy’s minority government and secured business for his company in return. The company earned Rs.49 crore net profit on Rs. 1,650 crore sales in 2013-14. As Chandrababu Naidu came into power in 2014-15, the company has announced Rs. 45 crore in profits.
The district dairies run into the ground To make Heritage the top player, Chandrababu Naidu had ensured the shutdown the most reputed AP Dairy and Chittoor Dairy, which were then leading dairy players. In the name of strengtheningthe cooperative movement, Chandrababu introduced the Mutually-Aided Cooperative Act (AP MACS) -1995 and used it to weaken the district-level dairies. The profits of cooperative dairies in Krishna, Guntur, Nellore Ongole and Visakhapatnam- most important districts for then AP Dairy Development Cooperative Federation Ltd.- fell drastically. Soon, the ailing cooperative dairies were overtaken by Heritage. Chandrababu Naidu used his public office to extend undue favours to his business. He compelled Tirumala Tirupati Devastanams (TTD) to use only Heritage dairy products and deprived the cooperative dairies a major buyer.
Last nail in the coffin Post-bifurcation, the AP Dairy Development Cooperative Federation faced severe hardships since the cheque power was with Telangana government. About Rs. 30 crore dues were not paid to the AP farmers. This has caused turmoil and the farmers had to come onto the streets across the state. The agitation continued for almost two months. Despite the intensity of the problem, Chandrababu did not respond to their grievance.
In the foot steps of their leader Telugu Desam MLA Dhulipalla Naarendra Kumar indulged in several offences to rob Sangam Dairy of its assets.The Anti-Corruption Bureau (ACB) after a thorough investigation booked criminal misconduct, criminal misappropriation, criminal breach of trust committed by a public servant, cheating, forgery and using false document cases against him.
According to the remand report submitted to the court by ACB “Dhulipalla Narendra Kumar, the then Chairman of erstwhile Guntur District Milk Producers Cooperative Union Limited (GDMPCUL) and Guntur District Milk producers Mutually aide Cooperative union (GDMPMACUL) and presently Sangam Milk producers company Limited(SMPCL) prominently known as “ Sangam Dairy” connived
with the Managing Directors of GDMPMACUL and Sri M.Gurunatham, the then District Cooperative Officer(DCO), Guntur and others during the period from 1994 to 2020 and got 10 Acres of land which is in the name of MilkCommissioner, Govt of AP/ MD,APDDCL(Govt) transferred illegally to Sri Dhulipalla Veeraiah Chowdary Memorial Trust (SDVCMT) without approval from the Government in violation of the conditions envisaged in GO Ms. No.515, Forest & Rural Development (Corporation) Department Dt. 17.07.1978, obtained a fabricated/false Certificate Dtd. 26.02.2011 issued by the then DCO, Guntur, fraudulently used a false certificate for the purpose of incorporating Sangam Dairy as a Producer Company and fraudulently availing huge loan in favour of SMPCL from National dairy Development Board (NDDB) by depositing the Title Deeds pertaining to the immovable properties which are in the name of Milk Commissioner, Govt of AP/ MD,APDDCL(Govt) by defying the orders of the High Court and thereby caused huge wrongful loss to the Government and huge wrongful gain to SMPCL.
It is further submitted that the Special Chief Secretary to Govt., (FAC), Animal Husbandry, Dairy Development, & Fisheries Department, AP vide letter No.1254174/Dy. &Vig(1)/2020 dt.05.11.2020 had requested the Director General, ACB, AP, Vijayawada to enquire into the allegations with regard to the grave irregularities committed by the Chairman & Management of Guntur District Milk Producers Mutually Aided Cooperative Union Limited (SangamMilk Producers Company) including misuse of the assets of the government.
In turn, the Director General, ACB vide Memo in C.No.99/RE-VGT/2020-S.17 dt.20.11.2020 ordered a Regular enquiry into the said allegations and instructed Sri J.Venkata Rao, DSP, ACB, Guntur to conduct the RegularEnquiry. In pursuance of orders of the Director General, ACB, AP, the Regular Enquiry was conducted on the above allegations and the Regular enquiry report was submitted to the Government in this regard.”
With the clearance of the government Mr Narendra Kumar has been taken into custody’s along with a couple of others.