InduTech SEZ puts Central ministers in a fix

New Delhi: Reports of YS Jaganmohan Reddy's alleged scam pertaining to InduTech Zone IT SEZ has put Prime Minister Narendra Modi, Finance Minister Arun Jaitley, Law Minister Ravi Shankar Prasad, Commerce Minister Suresh Prabhu, Urban Development Minister Narendra Singh Tomar in trouble on Thursday. Although Jagan is not named as respondent, his name is mentioned by the Mauritius government, it is said.

Carissa Investments LLC, a Mauritius company, had bought 49 per cent stake in InduTech Zone IT SEZ in the unified Andhra Pradesh, through foreign direct investment (FDI). The SEZ did not start as it got entangled in legal issues after the CBI chargesheeted YS Jaganmohan Reddy involving the land of the InduTech Zone IT SEZ.
It is now said that the Carissa Investments LLC has brought up the matter with the Mauritius government. The Mauritius government has raised the issue under a bilateral treaty - between Mauritius and India - for the protection of investments.

Citing the United Nations Commission on International Trade Law Model Law on Commercial Arbitration, the Mauritius government sent notices to the top Union ministers of the nation. The Mauritius government claimed that Carissa Investments LLC, based in Mauritius, has been cheated. Carissa Investments LLC is seeking a claim of $50 million and an arbitration. The Mauritius government said it is a breach of bilateral investment treaty that promised protection of investments.

It is being pointed out that in the first place, the Centre has no role in the said agreement between Carissa Investments LLC and InduTech Zone IT SEZ. The Centre has only provided a platform for the individuals to invest. Choosing a right partner is the responsibility of the investor.

Secondly, it is at best laughable that a company or a government should involve the Prime Minister or central ministers in the matter even if it prefers to interfere on behalf of a company registered under its laws and on its land, experts pointed out.

None of these were signatories to the agreement. Similarly, the liability of the state government also is ruled out in the case, they say. "If Mauritius seeks arbitration under a bilateral agreement, it is within its right to do so,” sources said.

Any FDI investor has the right to seek recourse to legal redress of his grievance but mentioning the names of the central ministers is weird. "If there is a case, the government would respond through proper channel because of the bilateral investment agreement,” the sources said. As for mention of the names of PM and other ministers, “no comments", they said brushing aside the reports to this effect as "part of hyper journalism".