HYDERABAD, India, 3 May — The Andhra Pradesh government has seized part of a historic palace in the state capital as its owner apparently took it on lease using money he borrowed from a cooperative bank accused of shady dealings.
The government Wednesday ordered the attachment of 7,458 square yards of prime land at Nazri Bagh King Kothi in the heart of Hyderabad.
M. Mohan Reddy had taken the land on lease from Mukarram Jah, the scion of the family that ruled the erstwhile princely state of Hyderabad, using money from the Charminar Cooperative Urban Bank.
Reddy, who borrowed 140 million rupees from the bank, had signed the deed with Mukarram Jah, the grandson of the seventh and last Hyderabad Nizam, Mir Osman Ali Khan. The extravagant successor of the last Nizam lives in Turkey and has periodically leased out or sold prime property, including palaces, in Hyderabad to meet his expenses. Nazri Bagh King Kothi was the official residence of Osman Ali Khan, who ruled the princely state of Hyderabad from 1914 to 1948, when it merged with the Indian Union.
The state government seized Reddy’s portion of the palace after attaching several prime properties belonging to the cooperative bank’s chairman and directors. It is now going after those who took huge loans from the bank. Charminar Cooperative Urban Bank plunged into crisis after its Chairman Almdar Hussain Sajjad Aga committed suicide Feb. 25. The Reserve Bank of India (RBI), which is conducting an inquiry, has since stopped payments to the depositors at all 19 of bank’s branches.
About 138,000 depositors have close to 4.75 billion rupees in the bank.
Investigators say the chairman and directors had committed several irregularities in sanctioning loans and advances of 2.71 billion rupees to companies and individuals.
