Andhra Pradesh government is all set to convert 29,000 existing ‘fair price shops’ into ‘Anna Village Malls’. In the first phase 6,500 ‘Anna Village Malls’ would-be setup across the state. Engaging the two corporate giants ‘Reliance Retail’ and ‘Future Group’ to handle these village malls, will be cited as an example of cronyism designed to benefit the Nara family.
In November 2016, Kishore Biyani-led ‘Future Retail Limited’ group announced that they were obtaining loss-making retail segment of ‘Heritage Foods Ltd’. In return Heritage received 1.8 crore shares which accounts to about 3.65 percent of Future Retail’s stakes. This all-equity transaction was reportedly a win-win situation.
Another such transaction in October2016 was the acquisition of the dairy business of ‘Reliance Retail’ by Heritage. The acquisition was completed in April2017 through a slump sale.
Therefore Heritage, a company promoted by the family members of Andhra Pradesh Chief Minister N. Chandrababu Naidu, will now receive indirect monetary benefit, from any deals that help these two groups.
Giving the ‘Anna Village Malls’ to Future group in which ‘Heritage group’ owns stake would be sort of cronyism designed to benefit the Nara family. As the Chief Minister cannot give the project to the firm in which his family has 3.65% ownership.
If these two firms continue to work on this ambitious project, Naidu being the Chief Minister will come across as a facilitator of crony capitalism. Also, the first family will be surrounded by controversy for securing monetary benefit out of the deals in the disguise of welfare schemes.
One needs to wait and see, how Naidu answers the possible and obvious accusations on this deal.
