How Radha Kishan Rao, Kria Healthcare directors forced shares transfer, orchestrated company takeover

Hyderabad: A case has been registered against former Task Force DCP Radha Kishan Rao and eight others including CI Gattumallu, SI Mallikarjun, for kidnapping him and forcing the ownership exchange of shares from chairman Venumadhav Chennupati and other directors of Kria Healthcare.

Venumadhav lodged a complaint with the Jubilee Hills police after Radha Kishan Rao’s recent arrest. Radha Kishan allegedly aided in the hostile takeover of Kria Healthcare Private Ltd valued at Rs100 crores from its founder.

The complainant urged the Hyderabad City Police to investigate the matters comprehensively, including the roles of Radha Kishan, Chandrasekhar Vege, four part-time directors of Kria Healthcare, and others involved.

The case

After completing his MBA/MPH at Harvard University and working at the World Bank, Venumadhav returned to India in 2008. In 2011, he founded Kria Healthcare, aimed at providing affordable healthcare solutions. By 2014, they were operating major projects in Andhra Pradesh, including 165 urban healthcare centres, telemedicine facilities, and emergency vehicles.

In 2011, Venu started a healthcare services company under the name and style of Kria Healthcare at Road Number 76, Jubilee Hills, Hyderabad, and engaged in innovative, low-cost solutions for affordable primary, preventive, and wellness services in India. In 2014, the Government of Andhra Pradesh allotted 165 primary healthcare centres. Since 2014, Kria Healthcare has been running healthcare centres and providing primary healthcare services at various government healthcare centres.

In 2016, Kria Healthcare was operating three major projects: running 165 urban primary healthcare centres in AP, managing telemedicine centres in Khammam, and overseeing 1,033 national highway emergency vehicles, with a total project worth 250 crores over five years.

New directors join the company

These projects were established even before the four part-time directors, Gopal, Raj, Naveen, and Ravi, had joined the company.

Initially, the complainant hired Balaji as the CEO in 2015, and later, a few investors joined the company. By the end of the financial year 2016-17, Kria Healthcare had four shareholders: Venu with 60 per cent, Balaji with 20 per cent, Gopal with 10 per cent, and Raj with 10 per cent. The company had a total of six directors, including two full-time directors, Venu and Balaji, and four part-time directors, Gopal, Raj, Naveen, and Ravi.

Pressure on selling shares

In 2018, the Government of Uttar Pradesh called for bidding on non-emergency mobile healthcare clinics. Kria Healthcare participated in that bidding, and the Government of Uttar Pradesh was about to conditionally award the said project to Kria Healthcare for running 1,500 mobile ambulance health clinics.

As the project was about to be allotted by the Government of Uttar Pradesh, four part-time directors of Kria Healthcare insisted that the complainant sell his 60 per cent share for a lower value. They started pressuring him to sell his shares in the company and had taken Balaji Utla on their side as they wanted to completely take over the company and run it for themselves.

Role of Vege

Chandrasekhar Vege, managing director and CEO of Goldfish Abode Private Limited, who is his neighbour and is engaged in the construction business, approached him in March 2018 for an investment in his Goldfish company.

The complainant mentioned the issues between him and the four part-time directors of Kria Healthcare to him. He devised a strategy where he would become a shareholder of Kria so that he could negotiate with the four part-time directors.

To become a shareholder, he proposed an undervalued transaction of Rs 10 per share for 4,00,000 shares. Through this transaction, he assured the complainant he would negotiate the market value of Rs 40 crores. For his services, a small service payment would be made. The Vege portrayed himself as being on friendly terms, winning his confidence.

Then Venu transferred Rs 40 crore worth of shares to him in the market at Rs 40 lakhs. He did this thinking that the four part-time directors were influential, and Vege seemed like he would be able to handle the job. Vege gave him the confidence that he would negotiate with the other party and get him the entire stake of Rs 40 crores.

Vege involved in manipulation

Upon receiving his shares, Vege initiated negotiations with the four part-time directors. However, Vege cheated by breaching legal and ethical standards by changing allegiance and orchestrating a separate agreement with them, engaging in dual-sided manipulation. Venu was completely unaware of this manipulation at the time that Vege had made a separate agreement with the four part-time directors.

Complaint on threatening calls

On October 3, 2018, the complainant filed against these four part-time directors for harassment, threatening calls and the non-payment of agreed share amounts into the company by Ravi and Naveen.

This was followed by retaliatory legal action from the four part-time directors on October 12, 2018, accusing him of non-distribution of shares. The authorities ignored their initial complaint on October 3, 2018; he even met the ACP Banjara Hills to complain about this issue.

In his complaint, Venu Madhav stated “I was made to sign the settlement agreement with weapons being shown at me, and I had to sign the agreement to save my life.”

When all the accused approached Radha Kishan

Towards the end of November 2018, there was a pressing urgency on all directors as the deadline for the UP Project was approaching in the first week of December. The situation escalated significantly when Chandrasekhar Vege, Gopal, Raj Talasila, Naveen and Ravi approached DCP Radha Kishan with a proposition to kidnap and coerce him into signing off the remaining shares and make him resign from the company.

Vege and Kria, four part-time directors, convinced DCP Radha Kishan that this drastic measure would effectively resolve their issue of taking over the company. They also made Balaji Utla, the CEO of Kria, a partner in the plan. Due to the Kria four part-time directors having influential status in society, they were able to leverage their contact with a highly powerful person.

This person called upon DCP Radha Kishan and gave him the go-ahead to execute the plan and take over the company. DCP Radha Kishan was promised hefty amounts by the four part-time directors for executing this plan. Vege, exploiting his role as the complainant's friend, intended to ensure his compliance by closely monitoring his activities.

On November 22, 2018, DCP Radha Kishan, Vege, and the four part-time directors and Balaji consented to and carried out the kidnapping plan, claiming they were from the Task Force and detaining him on a CI’s orders.

Role of SI Mallikarjun

To threaten Venu, SI Mallikarjun was asked to beat him. The SI warned that such treatment could befall him if he refused to comply with their demands. Later, Venu was taken to the DCP’s office, where he found Vege, Balaji, Poorna, Gopal, Raj Talasila, and Krishna conversing with DCP Radha Kishan. He attempted to clarify to the DCP that the existing directors were attempting a hostile takeover, referencing a recent inconclusive meeting regarding the new shareholder’s agreement.

In response, DCP Radha Kishan asked him to close the deal and not argue.

Kidnap drama

Upon his request, DCP Radha Kishan instructed that his phone be returned to him for a few calls, with a warning not to escalate the issue publicly to avoid further trouble. He messaged his lawyer, Srinivas, about being kidnapped by the police, and he replied that he would handle it in court.

Sanjay, owner of Lahari Resorts, who reached out to the DGP’s office. A call from the DGP’s office to CI Gattu was answered by Radha Kishan, who mentioned following orders from higher up. Sanjay called him back, suggesting that there were allegations against him involving money laundering and terrorism.

Understanding the gravity, he assured Sanjay he would handle the situation.

Vege, who is still acting as his well-wisher, was convincing him to accept the Radha Kishan deal or face danger to his life. Feeling exhausted and hopeless, He asked if the intent of this kidnapping was to get him to sign away his shares without compensation. Radha Kishan had already decided on the compensation to be given, and he told him to just sign whatever would be given to him, which he refused.

A settlement agreement

CI Gattu was instructed to draft the settlement agreement and the company secretary and Kria’s CFO, Manick and Naveen to come to the DCP office. They waited for their arrival, and they reached around 6 or 7 pm.

Balaji, in his capacity as CEO, threatened him, stating that he would assist the four part-time directors in fabricating additional false cases against him if he didn’t sign the settlement agreement. He was made to sign the settlement agreement with weapons like guns and sticks being shown at him, and he had to sign the agreement to save his life.

The DCP threatened him, clearly stating that discussing the situation with anyone or approaching the media, courts, or any other external parties would result in a life/death situation. Venu was also asked to avoid contacting the media, and lawyers or going to the courts.