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MS Prasad's firm in biodiesel scam!

Moturi Srinivas Prasad recently donated golden sword worth Rs 1 cr to Lord Venkateswara

MS Prasad’s firm in biodiesel scam!
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MS Prasad’s firm in biodiesel scam!

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Hyderabad-based industrialist Moturi Srinivas Prasad, who recently hit the headlines for donating a golden sword worth Rs 1 crore to Tirumala Tirupati Devasthanams(TTD), is embroiled in a controversy over export of biodiesel from Visakhapatnam.

Prasad, whose name also figured in the Panama Papers scam for his alleged involvement in four offshore British Virgin Islands companies, is the managing director of XtraaCleancities Ltd, a unit at Visakhapatnam Export Processing Zone (VSEZ)-Duvvada in Andhra Pradesh. Though he changed the name of the company to Divine Chemtec Ltd, VSEZ has not approved it and on its records it continues to be referred as XtraaCleancities Ltd.

XtraaCleancities Ltd was issued Letter of Approval under Rule 19 of SEZ Rules, 2006 to set up a unit for production of biodiesel, blended biodiesel and glycerin. The unit is inoperativenow.

"The case is regarding violation of foreign trade rules and it is under litigation. We are pursuing the case in the Supreme Court," VSEZ Development Commissioner A. Rama Mohan Reddy told Bizz Buzz on Thursday declining to comment further.

The city police also registered a case of fraud in 2012. Prasad had subsequently denied the charges and claimed that he did not commit any irregularity. There is also not much progress on the Panama Papers scam by the Enforcement Directorate (ED) apparently for want of evidence.

VSEZ in 2012 had slapped a penalty of nearly Rs70 crore on Prasad's firm for violation of foreign trade rules. The amount was later slashed. Sources said the alleged biofuel scam was worth Rs19 crore.

In the case filed in Delhi High Court, the complainant had questioned the jurisdiction of the Development Commissioner appointed under Section 11 of the Special Economic Zones Act-2005 to pass an order imposing penalty under Section 11 (2) of Foreign Trade Act. He had also challenged the imposition of penalty saying the alleged violation did not take place. The case filed by VSEZ against Prasad was about misuse of Generalised System of Preferences (GSP) Certificates of Indian Origin. He was alleged to have exported 19,299.644 MT American biodiesel along with 5,700.647 MT of Indian biodiesel under 'false and wrong GSP Certification of Indian Origin' to evade anti-dumping duties imposed by the member-countries of the European Union.

It is alleged that the company exported biodiesel to Switzerland and allowed entry without duty in view of GSP certificates of Indian Origin by concealing facts. Doubts were cast against the company following receipt of intelligence inputs from Export Inspection Council of India in 2011 on the actual origin of the consignments of biodiesel.

Santosh Patnaik
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