Kavitha exposes Congress govt’s attempt to convert TGIIC to public company
BRS MLC K Kavitha charges Revanth Reddy government with conspiring to mortgage Telangana lands on the stock exchange to raise massive loans
Hyderabad: After its decision to sell land in Kancha Gachibowli ending up in the Supreme Court, the Congress government is now betting on nearly 1.75 lakh acres under the control of Telangana Industrial Infrastructure Corporation (TGIIC). Accordingly, the government is now reportedly conspiring to convert the corporation into a public limited company.
The government issued GO No.12 on April 15, authorising the change in TGIIC’s status from a private limited company to a public limited entity. This shift is meant to facilitate larger borrowings by enabling access to capital markets through bonds, debentures, or even a potential IPO.
Releasing the GO at a press conference at Telangana Bhavan on Monday, BRS MLC K Kavitha charged the Revanth Reddy government with conspiring to mortgage Telangana lands on the stock exchange to raise massive loans. She demanded the immediate withdrawal of the GO, questioning the secrecy behind the move.
“I have specific evidence. Why was this change hidden from the public? What will happen to Telangana’s lands if there is a loss in the market? This is a betrayal of the people’s trust,” she said.
Kavitha reminded that the Revanth Reddy government had borrowed over Rs 1.8 lakh crore in just 16 months, with no major welfare scheme fully implemented.
“While part of its was spent for administration and repayment of loans, nearly Rs 1 lakh crore was paid to big contractors, of which Rs 20,000 crore was paid to Revanth Reddy as commission,” she claimed, demanding a white paper on State finances.
According to the GO, the number of shareholders has been increased from the existing four to seven, fulfilling the legal criteria for the conversion. The vice chairman and managing director of TGIIC has been directed to take necessary action in this regard.
Sources said consequent to change of status of TGIIC to a public company, status of all its subsidiaries also would change to deemed public companies. The change in status would also result in wider participation of investors in secondary markets for bonds and debentures, enabling the company to raise more loans. Public companies often find it easier to secure future financing i.e. enable them to borrow larger funds.
Public companies face stringent reporting, disclosure, and compliance requirements, increasing operational costs and administrative burden, and must disclose financial and operational information to the public. However, public shareholders can influence company decisions, potentially impacting founder control and strategic direction. Such traded companies are vulnerable to hostile takeover attempts as well.
