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Billionaire NRI caught in comrades’ cobweb

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ANANTHAKRISHNAN G.   |   Published 29.05.13, 12:00 AM

Thiruvananthapuram, May 28: Marx may have missed it but revolution, as the comrades in Kerala recently discovered, sometimes comes in the shape of a mall.

A sprawling, 2.5-million square feet edifice billed as India’s largest.

Throw in a proposed hospitality complex and the picture’s complete. But first the mall.

Five years ago, when it was in power, Kerala’s CPM-led Left government had cleared the way for M.A. Yusuf Ali, a billionaire Malayali NRI and chairman of the Abu Dhabi-headquartered EMKE Group, to build the mall in Kochi, Ernakulam.

But barely two months after the Lulu International Shopping Mall opened to a full house and traffic snarls, a section of the party has suddenly woken up to its green impact.

Ali, however, has the backing of the party’s proletarian face, V.S. Achuthanandan. The former chief minister’s detractors from the official faction, led by state unit secretary Pinarayi Vijayan, make up the critics.

The party’s Ernakulam district committee has alleged that the complex, built at a cost of Rs 1,600 crore, had flouted building rules and worsened the traffic chaos at Edappally, where it is situated.

District secretary Dinesh Mani, a Vijayan loyalist, demanded that the EMKE Group bear the cost for the construction of a proposed flyover to decongest Kochi. The state cabinet had last month sanctioned the flyover and also agreed to release Rs 180 crore for the project.

Asked about allegations by the Ernakulam district committee, Achuthanandan said: “The mall has not violated any rules. Those who are raising the charge now were silent in the last five years and had participated in the building process at every stage.”

The detractors have also targeted Ali’s investment in the proposed hospitality complex, due to come up on land reclaimed from the ecologically fragile Vembanad Lake.

An upset Ali has threatened to pull the plug on the project, which includes a convention centre, hotel, restaurant and a health club besides 572 apartments. He has written to the land’s custodian — the Cochin Port Trust (CPT) — to return the Rs 71.37 crore he had paid for 10.9 hectares taken on a 30-year lease.

Ali’s troubles began after a news report said the land for the convention centre — “reclaimed by the CPT in 2004-2005 exclusively for port-related activities” — had been leased to the EMKE Group for just Rs 71 crore, much less than its projected market price, for a Rs 380-crore hospitality project.

The land is situated in the upmarket Bolgatty Island off Marine Drive. Quoting estimates, the report claimed the land value alone would exceed Rs 500 crore in the open market.

The report went on to allege that the deal signed on July 26, 2011, had even exposed the CPT to the risk of losing the land as it allowed the developer to “seek loans ... against the property from commercial banks and central financial institutions”.

Citu leader M.M. Lawrence, who is also president of the Cochin Port Labour Union, has demanded a detailed probe.

Ali, once listed by an Arabian business magazine as the second-richest Indian in the Gulf with assets worth $1.84 billion, told reporters in Dubai that he had only tried to create more jobs but was withdrawing from a project that would trigger a controversy.

The CPT, too, came out with its version. At a media meet in Kochi today, port trust chairman Paul Antony asserted that the lease had been finalised after completing all legal formalities. He said there had been no undervaluation but the EMKE Group had been told that the land could not be used for building residential apartments.

Ali has received support from Congress chief minister Oommen Chandy, who said the state government would not allow him to withdraw from the Bolgatty project.

As the fire rages in the political circles, sources say it has all the markings of the CPM’s intra-party feud. The Vijayan faction, which used to be friendly with Ali, has fallen out with him after he ignored “advice” to keep Achuthanandan at bay.

Antony claimed Ali had never requested sanction to build service apartments at the project site. The trust will decide on the issue as and when any request comes before it he said.

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