Wednesday, November 8, 2023

When will Agrigold bloom again?

  • Lakhs of families depend on the organisation
  • Assets are more than liabilities
  • Judiciary alone can solve the issue
  • All eyes on Hyderabad High Court

Agrigold is a massive organisation that had come up in a big way and then collapsed like a pack of cards. Whether it collapsed on its own or it was deliberately felled by someone is an issue that is not very important at this point in time. When will the problem connected with crores of people be resolved? This question has been bothering crores of people across several States. Agrigold company which started its operations in Vijayawada in 1995 had grown into a big conglomerate in 20 years. By 2015, it had its presence in several States. It was doing business in Andhra Pradesh, Telangana, Karnataka, Tamil Nadu, Odisha, Maharashtra and Andaman.

Roots of the problem

The problem had come to light when the cheques issued by the organisation started bouncing. The CID wing of Andhra Pradesh had booked a case and started investigations. Many cases have been filed in other States. The police departments in different States had submitted reports to the respective governments. Agrigold customers and agents have formed associations and approached Andhra Pradesh High Court with a request to solve their problem. The undivided AP High Court had started hearings in 2015 in Hyderabad. It had given orders at different stages of hearing. The CID had identified Agrigold properties and submitted a list to the AP HC. All the properties that were identified so far are under the attachment of Hyderabad High Court.  In view of the agitations by customers and agents, several State governments have taken steps to resolve the issue.

Naidu’s promise that was not kept

As part of the government’s initiative, the then chief minister of AP, Nara Chandrababu Naidu, had promised to pay to the customers to the tune of Rs. 200 crore. A GO also was issued to that effect. But it did not get translated into action. The then Opposition leader Y.S. Jagan Mohan Reddy during his historic walkathon had received a number of appeals from the victims of the crisis. He promised that he would earnestly try to solve the problem expeditiously after he came to power. As part of that promise, he said he would earmark Rs. 1150 crore. This was included in the YSRCP manifesto. Jagan Mohan Reddy came to power in 2019. As a first step in implementing the promise, YSRCP government in AP had released  Rs. 263 crore and distributed the amount among 3.74 lakh customers. The government had announced that it is going to release Rs. 200 crore in December.

AP govt. starts paying small customers

AP government had written a letter to AP high court seeking its permission to proceed in this direction. There are 32 lakh customers in all the above mentioned States. In AP alone there are 19 lakh customers. Among them those who have to get less that Rs.20,000 are 12 lakh members. Out of them, 3.74 lakh customers have already been paid by AP government. With the instalment to be released in December, 2.85 lakh more customers will be paid their dues. In this way, in AP alone, out of the 19 lakh customers, about 6.5 lakh customers would have been paid their dues. If the total of Rs. 1150 crore were released by AP government as promised, the dues that are due to 12 lakh people would be cleared. All these are customers whose dues are less than Rs. 20,000. Then, seven lakh customers would be left. These customers have to get more than Rs.20 thousands.

Total customers are 32 lakh

The total amount due to the customers in all the States, according to the calculations done by different government departments, is about Rs. 6,350 crore. The amount to be paid to those customers whose cheques have been bounced would come to Rs. 700 crore. This accounts only for the customers. There are agents who should get their commissions, suppliers who should get their dues, the dues to be paid to the employees, the taxes that have to be paid  and the bank loans to reckon with. The total amount due in all these categories would be about Rs.800 crore, according to the estimate of the market experts. The grand total that would be due from the company to various agencies would be Rs. 7,800 crore. Among those who should get their dues are 32 laks customers, eight lakh agents, three lakh suppliers and ten thousand others. In sum, crores of persons are affected directly or indirectly because of the crisis that afflicted Agrigold company. Problems faced by all these people have to be resolved as soon as possible. Governments, private, corporate sources estimate that Agrigold has more assets than liabilities.

Haailand and 16,000 acres of land

Besides the Haailand in Vijayawada, there are about 16,000 acres of land registered in the name of Agrigold. All these lands are under the attachment of Hyderabad High Court. This is a source of great relief for the victims. Among the assets of Agrigold there are different industries and varieties of plantations. Red sandal trees are a source of huge wealth. By making plots in the vast lands in the name of Agrigold and forming townships and also by constructing commercial complexes, crores of income could be generated.  The judiciary and the governments have already taken some measures to solve the problem. Meanwhile, the organisations of the agents and customers had approached the Supreme Court through a petition with a request to resolve the problem as soon as possible.

SC advises to consult HC

The Supreme Court bench has directed that since the case is already in Hyderabad High Court, the petitioners could consult the high court. The Supreme Court bench has also expressed its view that the problem should be solved soon. The management of Agrigold has filed an affidavit on 18 July 2019 in Hyderabad High Court. The affidavit said the company could create an income of Rs. 11,500 crore in four years. The company has said, in its affidavit, that it would pay Rs. 700 crore more towards the 10 percent interest on the dues to the customers. All these commitments would add up to Rs.8,500 crore. The value of the assets Agrigold said it would create will be Rs. 11,500 crore. There would be a surplus of Rs. 3000 crore after all dues were paid.

Haailand has to be valued

Besides this, the price of Haailand also has to be decided. State Bank of India in the past valued Haailand at Rs. 600 crore. This has to be estimated again depending on the revised prices. The value of the lands under attachment with the high court, according to SR (Sub-Registrar) value, would be about Rs. 8,000 crore.  If the market price that is prevailing is taken into consideration the worth of the lands would be more than Rs. 20,000 crore. Agrigold management had made several appeals in the affidavit filed in the high court. Some of them are: 1. To appoint a committee with retired judges. 2. To permit organsiations/companies that come forward to work on joint ventures to sell the lands after developing them and dividing them into plots. 3. The proceeds realised through the sales would be deposited in high court after deducting the share of the developers. 4. The court and the governments have to pay to the customers and others as and when the money comes. 5. To pay everybody’s due and be debt-free within four years. 6. All these activities have to be done under the  supervision of the high court.

HC hearing on 4 Nov.

This issue is going to come up in high court for hearing on 4 November 2020. The high court has to take a decision on this issue. If everything goes well, the problems of the victims would hopefully be resolved satisfactorily and totally. Five years have gone by due to cases and court proceedings since 2015. If the problem is resolved faster, crores of people across different States would get benefited. Observers feel that if the associations of the customers, agents, State governments, concerned departments, Agrigold management come together on one platform, the solution could be found and implemented much faster.

Light in the lives of crore of people

There is dire need for new light to be filled in the lives of crores of people. The enforcement directorate (ED) is also understood to have started probe into Agrigold matters. Properties belonging to the organisation are already under the attachment of Hyderabad High Court. Whichever agencies conduct probes, the final resolution has to be done by the courts. The courts give judgments fairly abiding by laws of the land. Let us hope justice would be done to all as soon as possible.


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