Mr Rao has already ordered the Criminal Investigation Department, or CID, the state police's specialised probe team, to investigate the transfer of 700 acres of government land.
Chief Minister Rao ordered the crackdown after the police arrested directors of two real estate companies and a government official over the weekend in the scam. One government official was also arrested, and two more have been suspended.
District Registrar Saidi Reddy stumbled upon the fraud when he was conducting an audit review in the first four months of this year. In the transactions carried out in four documents in January last year, he found the two companies had paid just Rs 41.2 lakh in government levies for registering 693 acres of land, instead of 587 crores estimated by the police. The market value of the land was not even mentioned.
As he dug deeper, Mr Reddy found that the patches of land being sold had been declared by revenue officers as government land. He promptly cancelled the deeds, filed a criminal complaint and informed his superiors.
Undivided Andhra Pradesh, from which Telangana was carved out in 2014, was one of the first states in the country to computerise its land records system. But land registration officials figured a way around technology. To keep the shady land deals under the radar, the officials weren't uploading the transfer into the online system.
But Chief Minister Rao said that people needn't worry about government losing land in the scam. Mr Rao, or KCR, as the Chief Minister is often called, said the land continued to be in the government's possession and the real estate companies transferring land in government records were playing the banking sector.
A statement issued by the Chief Minister's Office said the registration documents were being used "to get loans from banks and other financial institutions". There is, however, no clarity about the size of loans released by banks on the basis of these dubious land deals.
Ravishankar Jandhyala who represents the two private companies, however, suggested the government had got its facts wrong. "It is disputed land and several SLPs (special leave petitions) are pending in the Supreme Court. Only after the apex court disposes the petitions can the land be bought or sold. My clients had only entered into deeds of assurance and not a sale deed. There was no malafide to cheat the government of its revenue," he said.
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