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Business News/ Industry / Infrastructure/  Ashok Kheny: miles of uncertainty

Ashok Kheny: miles of uncertainty

Controversies over the Bangalore-Mysore corridor have engulfed Kheny’s reputation, but he refuses to give up on the project

Ashok Kheny, MD, Nandi Infrastructure Corridor Enterprises Ltd. Kheny rescued the bullocks from a butcher and donated them to an animal shelter, only to take them back again when he saw they were ailing.  Photo: Aniruddha Chowdhury/Mint    (Aniruddha Chowdhury/Mint   )Premium
Ashok Kheny, MD, Nandi Infrastructure Corridor Enterprises Ltd. Kheny rescued the bullocks from a butcher and donated them to an animal shelter, only to take them back again when he saw they were ailing. Photo: Aniruddha Chowdhury/Mint
(Aniruddha Chowdhury/Mint )

Bangalore: “Here honey. Come here…," 63-year-old Ashok Kheny croons.

He is standing in front of his office on the outskirts of Bangalore along a peripheral ring road his company has built leading to a proposed 111km expressway that would theoretically reduce the three-hour driving time between Bangalore and Mysore to an hour.

The objects of Kheny’s attention are Amar and Prem, two big, well-fed bullocks of the type commonly seen in south India, who are being led up the manicured lawns by one of Kheny’s workers. When within earshot, they pick up their pace to a trot and patiently allow Kheny to nuzzle them and pose for photographs.

Kheny rescued the bullocks from a butcher and donated them to an animal shelter, only to take them back again when he saw they were ailing. His care for them stems from more than just a concern for animal welfare. His company Nandi Infrastructure Corridor Enterprises Ltd (NICE) is named after the Hindu god Shiva’s mount, Nandi, a bull usually depicted kneeling, and worshipped alongside the god.

In temples dedicated to Nandi, devotees kneel before the statue of the bull, whispering their problems into its ear, in the belief that Nandi will, in turn, convey them to Shiva.

Kheny has more reasons than most to want a conference with Nandi. The massive infrastructure project that his company is building has been mired in delays for the past 18 years. Out of the original proposal of a 111-km road, as well as link roads and interchanges in both Bangalore and Mysore that would together pass through 149 villages over four districts, requiring some 20,193 acres of land, all that so far exists is the 41-km ring road on which Kheny stands, some 9 km of link roads and 5 km of expressway.

No ground has been broken for the five industrial townships envisaged along the route and since 1995, when the project was approved through a memorandum of understanding (MoU) with the Karnataka state government, NICE has fought 550 lawsuits related to the project at various levels of the judiciary, including at least six in the Supreme Court.

In the last 18 years he has also branched into acting, playing small movie roles, into film production (he has even made a film with Hindi actor Salman Khan, apart from Kannada movies). And he owns a cricket team of movie actors from his native Karnataka.

But the road project, for which Kheny is famous, has remained mired in controversies. It’s fair to say that the last two decades have not been smooth sailing for Kheny. And yet there is no definitive explanation as to why the project has been so delayed.

Some contend that a long-running feud between the businessman and H.D. Deve Gowda, Karnataka chief minister when the MoU was signed in 1995 and who went on to become prime minister in 1996-97, has been responsible for the delay.

Allegations of mutual backstabbing, kickbacks and greed over real estate have shadowed the project for years, and each insists that the other is entirely to blame.

But the details of such allegations are murky and the courts have repeatedly cleared Kheny and his company of wrongdoing.

Nevertheless, protests against the expressway have continued, driven by activists, farmers groups, local politicians and Deve Gowda himself.

Some observers have framed the fight as a caste battle, its two protagonists each representing a caste group: the Lingayats (Kheny) and the Vokkaligas (Deve Gowda). Fellow businessmen, politicians, journalists and locals are sharply divided as to who is to blame for the imbroglio.

Whatever be its origin, the hostility has engulfed Kheny’s reputation and overshadowed the rest of his career. Kheny feels these grievances acutely and claims to have been abandoned by everybody except his mother and his wife. But he refuses to give up on the project. In fact, he insists with an incongruous bullishness that it will yet be a success. “Everybody gets persecuted," he says. “Jesus Christ got persecuted. Mahatma Gandhi got persecuted. You know Basaveshwar (a Karnataka social reformer from the 11th century) got persecuted."

In 1994, Kheny was one of many affluent Indians pursuing a successful career in the US. After completing his engineering degree at Karnataka Regional Engineering College, Surathkal, he studied at Worcester Polytechnic in Massachusetts for a Masters degree in 1969 before taking a job at American railroad company Penn Central, which later became Conrail. In 1978 he founded SAB Engineering and Constructions Inc., part of which he later sold to the American International Group Inc. He claims he helped to lay the first fiber optic network between New York and Los Angeles and from Florida to Washington DC for the telecommunications firm AT&T. Neither AIG nor AT&T responded to e-mails seeking comment.

In 1992, he married Rita, an Italian-American, and a few months later his father died. The following year, Kheny travelled to India and was taking his mother to visit Mysore, when, he says, he got the idea of building the road. The state highway linking Bangalore and Mysore was in bad shape, he says, and back in Bangalore he complained about the state of the road at a dinner where there were government officials present. Kheny says they told him that it was common among people who had gone abroad to complain about the infrastructure back home. “Why don’t you do something about it?" he says they told him.

Two years later, having wound up his US businesses, Kheny was back with an ambitious plan for the expressway, link roads and seven proposed industrial developments. On 20 February 1995, according to the MoU, William F. Weld, then governor of Massachusetts, met Deve Gowda. “During the discussion," the MoU states, “the interests of the consortium comprising Vanasse Hangen Brustlin Inc., a company registered in the State of Massachusetts, in collaboration with the Kalyani group of companies, and SAB Engineering and Construction, in taking up the construction of express highways in Karnataka State was discussed". While Kheny signed on behalf of his company, SAB, his first cousin B.N. Kalyani signed for the Kalyani group. On behalf of the government, the document was signed by the then secretary to the government public works department, C.R. Ramesh. The MoU was witnessed by Deve Gowda and Weld.

A year later, in 1996, Kheny incorporated NICE Ltd and a framework agreement was signed by Kheny for NICE and Ramesh for the state government on 3 April 1997. The project was approved and the work was expected to take 10 years to complete.

The details of the agreement have prompted allegations that it was heavily tilted in favour of NICE. Critics point to the fact that as per the agreement, the government gave up its right of eminent domain for the land under development, the fact that NICE’s arbitrators are based in London. Eminent Domain refers to the power of the government to obtain individual property, forcibly if required, if the land is needed for public purposes.

“To say it is one-sided is an understatement," said a former Karnataka government bureaucrat who did not want to be named. “GoK comes out as a subordinate to NICE."

In his defence, Kheny says that his project got far fewer benefits than the Bangalore International Airport, which is also held by a private firm. Lawyers say that having arbitrators overseas was par for the course, that when the project was signed companies did not like appointing arbitrators in India because of the inordinately long time they took.

“Till 2002 we did not have concept of institutional arbitration so companies that wanted it would appoint people in Singapore, the US or London," said Anil Xavier, president of Indian Institute of Arbitration and Mediation.

There were also allegations that government officials were in cahoots with NICE from the beginning. For example, C.R. Ramesh, who had signed both the MoU and the framework agreement as a secretary to the state’s Public Works Department, subsequently did some work for NICE as a consultant after he retired from government service.

A NICE spokesperson confirmed that Ramesh had signed the framework agreement on behalf of the government and that after he retired he was hired at the behest of former Karnataka chief minister J.H. Patel, to help the company in its constant interactions with the Karnataka government. The issue was also raised as part of a 2005 lawsuit on various aspects of the project but the judge had said Ramesh was not guilty.

Dismissing the allegations, Kheny insisted that Deve Gowda had foiled his intentions on purpose. Once he had the expressway contract, Kheny says, he began to receive calls from all sorts of influential people, lobbying him to alter its route to avoid their land: including a “whole bunch of politicians" and “some retired judges". It was amazing, he said, “Everybody wants to shift the road." He claims Deve Gowda sent him a list of lands to avoid on his route. “He called me up. He said, ‘Let go of this 1,100 acres of land, then in place I’ll give you 5,000 acres.’ I refused," Kheny said. “And he (Deve Gowda) said, ‘I am going to punish you.’"

For the villagers who live along the 41km stretch of ring road around Bangalore, built to service the non-existent expressway, Kheny is either a saint, or the devil incarnate, depending on who you ask. Those with jobs manning the ring road toll booths have only good things to say. Others, who have lost land to the project, complain that the expressway was diverted by influential landowners to avoid their land, that it is nothing more than a real estate project in disguise.

Whichever version you believe, Kheny’s presence is ubiquitous along what is commonly called the “NICE road". As solidly built as his bovine friends—last year he underwent bariatric surgery, a weight-reduction procedure—with a thick neck, a mop of jet black hair and wide-set brown eyes, Kheny is something of a showman: the NICE office is overlooked by a 60-foot billboard of himself and its front hall is decorated with pictures of the boss acting in various movie roles, including one in which he played a bygone king—complete with a turban and a large moustache—in an improbable rebirth drama.

Kheny was born into a household with a similarly rich family mythology; he is the second of five siblings, of a wealthy family in Bidar, the northernmost district of Karnataka. On the upper floor of the Bidar house, there is a wooden hand fixed to a pole. The hand, according to local villagers, is a symbol of Kheny’s great grandfather Maharudrappa. The belief is that Maharudrappa, whose charity is legendary, was paralysed because he gave so much. Local legend has it that when an epidemic of plague struck the countryside, Maharudrappa housed the villagers in his fort-like home. The wooden hand on its pole is taken in a procession around the village once a year, after which the villagers are fed.

The younger generation of Khenys work in the manufacturing industry: Kheny’s older brother, Shivkumar, is a director at Kalyani Steel. His sister Sunitha married their first cousin Babasaheb Kalyani, who currently heads the 12,000 crore by revenue Kalyani group, which has interests in metal working, steel and auto component making. The Kalyani group is also the biggest investor in NICE Ltd.

Kheny has a plethora of other business interests aside from NICE, however. He also holds directorships at LXY Homes Pvt. Ltd, Premier Apartments Pvt. Ltd, Ashok Kheny Infrastructure Pvt. Ltd, Bonick Developers Pvt. Ltd, Ashok Kheny Motors Pvt. Ltd, AKK Developers Ltd, Nandi Economic Corridor Enterprise Ltd, Nandi Engineering Ltd, Nandi Infrastructure Capital Co. Ltd, Nandi Intellectual Properties Pvt. Ltd, Nandi Highway Developers Ltd and Nandi International Infrastructure Engineers Ltd.

BF Utilities Ltd, itself a subsidiary of the $8.8 billion Bharat Forge, holds 74.82% in NICE. Babasaheb Kalyani holds 4.62% while Kheny himself holds 19.81%,

Nor are his business interests limited to infrastructure: he also owns a company that produces movies, AKK Entertainment Pvt. Ltd. He is currently making two movies, one each in Hindi and Kannada. He owns a 19% stake in the Celebrity Cricket League, a cricket league of movie actors from state film associations, in which he says Bennett, Coleman and Co. Ltd (BCCL), has a stake. Kheny separately owns the Karnataka Bulldozers, the Karnataka team in the league. According to an official with the Karnataka Bulldozers team, Kheny also holds a 30% stake in the Kerala Strikers.

BCCL CEO Ravi Dhariwal did not respond to a query seeking comment. BCCL, publisher of The Times of India and The Economic Times, competes with HT Media Ltd, which publishes Hindustan Times and Mint.

Kheny admits that he had set up Bonick Developers in the expectation that it would be able to develop real estate but when the government didn’t hand over land, he did nothing with the company. Bonick doesn’t “have one square centimetre" of land, Kheny said. He held directorships in some other firms, but no stake, he said.

A visitor to Deve Gowda’s son H.D. Revanna’s house will overhear the name “Ashok Kheny" several times in other people’s conversations in the waiting area. The two men seem inextricably linked—Kheny as the south pole to Deve Gowda’s north. Except, in the laws of physics, opposites attract.

Deve Gowda was born 18 May 1933 into an agrarian family in Hassan district, Karnataka. He contested elections and became a member of the Karnataka Legislative Assembly in 1962 as an independent candidate, according to his website. He was elected as a member of Parliament from Hassan in 1991 and went on to become the leader of the state Janata Dal and was elected chief minister in December 1994.

In the early nineties, Deve Gowda, who likes being called mannina maga (son of the soil), was persuaded by then Prime Minister P.V. Narasimha Rao to attend the World Economic Forum, in Davos. According to Deve Gowda, Rao had wanted “a non-Congress, non-BJP chief minister to attend" as a representative to encourage foreign investment. “I went there and of course we invited the investors to come to India. So this is one of the companies to come to India," he said, of NICE. However, Deve Gowda insists he only signed the Kheny MoU as a witness, and that bureaucrats ironed out the details.

“It’s a loot," he says of the project. “He has not proceeded from the first stage at all. See the beauty?"

Deve Gowda claims that Kheny has acquired “2,000 and odd acres" around Bangalore and that he is sitting on valuable real estate. On the coffee table is a covered spittoon, which the politician uses once. He suffers from breathing difficulties and has a lot of sputum, he says. Asked about persistent speculation of his own family’s land in the Bangalore-Mysore area, he says: “Even if one gunta (a local unit of land. 40 guntas make an acre) of land belongs to my family or my relatives or any benami land (land under fictitious ownership), let it be taken today."

Deve Gowda is not the only one to see the road as the disguise for a real estate venture. “That road will never come up because it is basically a real estate project," says a former Karnataka government official, who said he had interacted with Kheny several times as a government representative. “Because first of all they are not interested in the road." The former official said Deve Gowda had set up a raitha sangha, or farmers’ group, who occasionally go and protest or “plough up the road".

In 1996, a year after the MoU was signed, Deve Gowda became the prime minister of India for 10 months, heading a coalition of regional parties. In that year’s elections, Rao was defeated and the rival Bharatiya Janata Party was unable to show a majority, leading to the fall of Atal Bihari Vajpayee’s 13-day government. It isn’t easy to identify exactly when things began to sour between the politician and the businessman, but he became a staunch critic of the project in the 2000s. Since then, he has led street protests, supported angry farmers, written letters to the current prime minister Manmohan Singh criticizing the project, published a book alleging wrongdoing, and even taken part in a hunger strike in New Delhi to protest against the project.

There are multiple opinions on his motivations: “Very clearly what has happened to contribute to the fallout is the sharing of spoils between the political class and the business class," said Sandeep Shastri, a political analyst and pro vice-chancellor of Jain University.

For his part, Kheny has a reputation for being very litigious, having fought some 550 cases. “He is fighting only to make cover-up," Deve Gowda says. NICE’s spokesperson claims that most of the cases are ones filed by land losers and that NICE may have filed “20-30%" of the 500, apart from four against journalists. “When people say things without a shred of proof, the company does not have any recourse," he said.

Others say that, in the absence of a government-provided alternative, any argument on an issue like the BMIC (Bangalore-Mysore Infrastructure Corridor) is coloured by the fact that Kheny has at least built part of a good road where none existed before.

Ashwin Mahesh, a Bangalore resident who has a research appointment at the Indian Institute of Management, and is an adjunct faculty member at Indian Institute Information of Technology (IIIT), said, “Their (the people’s) judgement is it a good road, and that itself becomes a judgment on every other aspect of the project. It’s not that the other stuff isn’t important, or shouldn’t be the focus, but at a public perception level, it is hard to get to that stage. The immediate perceptive element is: this is a road. The others are, frankly, not worth calling roads," he said.

As to whether the project agreement unduly favoured Kheny, Mahesh said that the line between the project proponent and the government was often blurred—a serious but common problem with infrastructure projects in India.

“No, it was a fair agreement, done when land prices were low and nobody was building infrastructure of this sort," said Mohandas Pai, ex-chief finance officer of Infosys and current chairman of Manipal Global Education Services Pvt. Ltd. “It is a political fight since Ashok did not do favours nor favour people when it came to land acquisition. Many powerful people’s land was to be acquired and they opposed it."

Pai said he had met Kheny with Baba Kalyani and attended the inauguration of the project because the Bangalore leg of the project would help a lot of companies—including Infosys—that had their offices in Electronic City on Bangalore’s outskirts. “All of us supported his road because it made a big difference to some 1 million people who use Hosur Road," connecting Bangalore to Electronic city, he said. Hosur road goes on to Hosur in Tamil Nadu.

Kheny says that there have been no changes to the original alignment of the road. “Between here and Mysore, 55 MLAs are there. If I favoured one guy, 54 others would jump on me. And not only that, for every guy who got elected, two guys who didn’t get elected, they think they deserve the right. So, I’ll have over 150 people after me, okay. Forget about them, how about the DCs, tahsildars, village accountants, numerous panchayats etc are there," Kheny says. DCs refer to deputy commissioners. They and tahsildars are senior revenue department officials.

Kheny has another fan base near his ancestral village: farmers, who lost their land to the Karanja dam near Kheni Ranjol and are protesting the amount of government compensation, paint the man as a saint.

Suryakant Patil, of the Karanja Melugade Horata Samithi, a committee set up by farmers who lost their land to the Karanja dam says that without Kheny’s hand-holding, they would not have survived. He says Kheny helped them file a public interest litigation, helped them out with money. Patil says villagers in a clutch of villages in Bidar lost some 15,000 acres of land to the submergence area and another 5,000 acres to a canal. Around 8,500 families were affected.

Kheny hasn’t cheated anybody, says a villager from Hemigepura, a village along the peripheral ring road. The man, who says he lost some 6 acres of land to the project but was given a job at one of NICE’s many toll booths, along with compensation and the promise of a new developed plot, said that at the time Kheny bought his land, the going rate was 6.5 lakh an acre. Now that the area has come under the jurisdiction of the Bruhat Bengaluru Mahanagara Palike (BBMP), land values have gone up because once the land falls under the city civic body, it will allocate areas for civic amenities and administer to the area.

“They shouldn’t have sold it earlier," said the villager. “They should have protested earlier. Having sold it earlier because of the lust for money, now if they protest… No? Now it is (under) BBMP (the land goes for) as much as 1.5 crore. At that time it was only that much ( 6.5 lakh). Now, you cannot make Kheny the villain," he said.

Not a lot of people agree.

“Unfortunately the people who took the cause of the farmers did not know how to deal with this issue. It’s an absolute fraud," said T.J. Abraham, an activist, who has filed a lawsuit against the company for alleged irregularities in the project.

Kheny is mindful of his unpopularity in some quarters. He is always surrounded by bodyguards, as many as six sometimes although they don’t seem to be carrying guns. There are 24 guards in total, who work in shifts, says an employee, who did not want to be named. They are necessitated by the protests against his road, protests which are stirred by politicians, the man says. In a recent protest, where social activist Medha Patkar threw her weight behind the land-losing farmers, farmer after farmer spoke on stage, denouncing equally the road itself and Kheny.

Even in the face of nearly two decades of such antipathy, however, Kheny has not called off the project; on the contrary, he still seems genuinely enthused by it. He is happy to show off his plans for the peripheral road, including the new office shaped like the eponymous bull, a 300-acre film city and even a monorail running along the road’s median. There are plans to build a cricket stadium (“retractable roof, retractable ground"), which Kheny says will go up for approval within a month.

Anil Kheny, Kheny’s cousin, calls him a Hattavaadhi or a stubborn man. When asked to explain why somebody who came from wealth would want to be involved in a protracted fight with politicians and farmers, he mused: “If I decide to do it, I have to do it. He is that kind of guy."

Aman Malik in New Delhi contributed to this story.

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Updated: 25 Apr 2013, 11:54 PM IST
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