The Andhra Pradesh government on Tuesday informed the Hyderabad High Court that it was rejecting the proposal by the Essel-Zee Group’s Subhash Chandra Foundation, to take over the scam-hit AgriGold group of companies.
The foundation had proposed to take over the tainted company by paying Rs 4,000 crore and said that it would do so in a phased manner.
The state government was responding to an earlier order by the court on August 3, to spell out its stand on the proposal.
According to media reports, CID additional DG Amit Garg said in an affidavit that the proposal submitted by the Essel Group would be difficult to implement and cited various contradictory statements made by the company, when it expressed its wish for the takeover.
“If this proposal is accepted as it is or with modifications, if any, it will result in a situation where the state will reach a point of no return and will be dependent on the intervener having entered into an understanding and lapse, if any, will further complicate the issues and situation with the interest of the depositors taking a back seat,” the state government was quoted as saying.
After hearing all arguments, the court directed the Essel Group to submit a detailed proposal with specific details of the amount it was willing to invest in purchasing properties of AgriGold, along with a detailed timeline that it would follow, while doing so.
The case was posted to September 17 for further hearing.
Around 3.2 million people in many states, including Telangana, Andhra Pradesh, Tamil Nadu and Karnataka, were duped by the AgriGold scam, which came to light in 2014.
AgriGold owes Rs 6,380 crore to over 32 lakh depositors in 9 states, with Andhra Pradesh leading the list with 19 lakh depositors.
The company lured several lakh customers on the promise that their investment would come back to them with higher returns. Several 'agents' were also sent out to convince people to invest in the group of companies.
The company allegedly took this money and invested heavily in real estate, before branching out to other areas as well, and finally duping the customers. Over 100 people have committed suicide after the scam came to light.