Kannur Airport: Government’s ‘business’ with Yusuffali to induce Rs.26-crore loss

As Kannur International Airport is all set to be launched next year, attempts are made by the State Government to give out the shares worth Rs.152.09 each to Lulu Group’s Yusuffali M.A. at Rs.100 per share, causing a loss amounting to Rs.26 crore to the State exchequer. The share value of Kannur airport when calculated in March was Rs.152.09 and the Government has now decided to sell the shares to the businessman at Rs.100. Almost 50 lakh shares will be received by Yusuffali at this rate.

It is informed that the report which was published in connection with the 8th annual meet of Kannur International Airport Ltd (KIAL) had mentioned about this change in value of the shares which will be sold to Yusuffali. Several shareholders had also stated that they did not receive the shares from KIAL when they applied for them.

However, officials at KIAL termed the allegations “baseless”. The officials justify their stand by saying that no other investor showed interest in investing such a huge amount of money as Lulu Group’s Yusuffali did.

Besides, it was reported that the shareholders who hold shares worth Rs. 50,000 to Rs.2,00,000 were voiceless in the general body meetings while the bigger names in the list including Yusuffali and his nephew Dr. Shamsheer hold greater say in the affairs of KIAL.

When contacted, Minister Kadannappally Ramachandran and several MLAs from Kannur district declined to respond.

O. Rajagopal MLA said that he was unsure about the happening. “However these things may occur. There are enough rooms for such things to take place in Kerala as communism has withered away from its original values. The existing communist party has degraded to back only the high-profile businesses and their leaders,” he said.

 

“The allegations are absolutely baseless. We don’t know what exactly is the agenda behind these allegations. One thing we have always ensured is that anybody who would like to purchase the shares will not be restricted for sure. They can register their names. There is a procedure and formalities and that is all. No one is restricted from being a shareholder and no one is given preference,” said Bala Kiran IAS, Managing Director of KIAL.

The shares are managed by company secretary and when contacted, the official, Jnanendra Kumar, said along the lines of the Managing Director. “KIAL is a company which works in public-private partnership. We had earlier issued shares worth Rs.1,000 crore, of which we could acquire nearly Rs.990 crore from various shareholders. We have now issued shares worth Rs.500 crore and those worth Rs.10 crore which was pending from the previous time of issue of shares. Now people are saying they are not given enough shares. This is baseless as we have not restricted the general public from owing shares ever in the history of KIAL,” he said.

“Yusuffali and his nephew Dr. Shamseer had owned shares worth Rs.45 crore when the company was very badly in need of money. Yusuffali has now expressed his willingness to invest another Rs.50 crore in the required Rs.510 crore. There are around 4,700 other shareholders but none of them had a comparable investment as Yusuffali’s. The Chief Minister had also said this the other day when we had our annual general body meeting. He said we could not run without high capacity investors though the general public is never restricted to hold shares. In fact, we are in need of more shareholders and we always welcome any interested individual,” he added.

As per the existing structure of shares, the State Government holds 35 per cent of the shares. Kerala Government owned this share following it granted land for the airport. The Airport Authority of India, a Central Government institution, owns 10 per cent of the shares. Bharat Petroleum Corporation Ltd and several PSUs including Beverages Corporation, KTDC, Kerala Metals and Minerals Limited, KSIE, together hold 24 per cent of the shares. The remaining 31 per cent is open to private investors, high net worth individuals, Cooperative societies, Cooperative Banks, Federal Bank, Canara Bank and South Indian Bank.

Meanwhile, shareholders in Kannur seem to be oblivious about the Government decision to sell shares to Yusuffali at the earlier rate. A shareholder from Kannur who has been a regular attendee at the shareholders’ meetings said that he never knew if the share value had changed from Rs.100 to 152. “I think the share value is Rs.100 at present. I don’t know if it has changed in the recent times,” he said.

He further shared his concerns about the appointment of staff and the irregularities in the compensation to land owners who gave their land for the airport. “I have attended almost all the meetings. I don’t think we are restricted from expressing our concerns. The meetings have given the shareholders time to speak but what I have often felt is that there should be a consolidation of shareholders, I mean those who have invested Rs.50,000, one lakh or two,” he said.

“But of course in the last meeting, we had expressed our concerns about the appointment of staff. Almost 150 houses were removed from the land which was acquired by the Government for the airport construction. The members of these families must be provided with jobs at the airport. There are irregularities in the appointment of staff at the airport now. When the land owners who gave their land to the airport were given compensation, there was huge corruption as different people got different amount for same area of land. Public officials who dealt with the settling had accrued huge amount of money in this way. There are many other such irregularities happening in the airport on a daily basis,” he alleged, adding that these things should be monitored.

 

Picture of the work at the airport has been taken from the official website of Kannur International Airport Ltd.

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