Anantapur: The Kurnool police arrested N. Keshava Reddy, chairman of the Keshava Reddy Educational Institutions, for cheating parents by not refunding deposits of about Rs 470 crore and defaulting on bank loans of Rs 62 crore in AP and Telangana state, at Kurnool on Thursday.
CCS police detained Keshava Reddy at a tollgate in Kurnool on Wednesday evening and seized his vehicle along with documents. The group has 40 branches in both states.
Kurnool SP Ake Ravi Krishna said that he had collected Rs 470 crore from 11,000 students and 800 individuals, including political leaders, farmers and others.
He collected Rs 1 lakh to Rs 3 lakh from the parents offering corporate school-style education. He issued promissory notes to the depositors.
He also borrowed Rs 62 crore from banks by pledging school buildings and Rs 10 crore on vehicles. He told the police that he invested the money in real estate.
The school management failed to repay the parents and depositors even a year after the due date. He kept postponing the payment dates at all branches.
Five cases were registered against Keshava Reddy at Nandyal and Panyam police stations based on complaints by depositors.
Police said Keshava Reddy confessed that he had not repaid depositors.
“I invested in real estate, but they do not have the value to repay debts and deposits. If I get one year’s time I’ll repay everyone,” he said. He expressed readiness to hand over all properties to the government, seeking settlement of dues.
Parents threaten suicide
In the first case of its kind pertaining to educational institutions Keshava Reddy violated norms of the Reserve Bank of India and the Depositors’ Act .
His group of institutions established 40 residential schools in AP and Telangana state. The institute attracted more students from rural areas of Rayalaseema and even parts of Telangana.
More than 11,000 parents, mostly farmers, middle class people and petty shop traders, paid the deposits. Many parents rushed to the Kurnool SP’s office when they heard of the arrest.
Three parents threatened to commit suicide if justice is not done. Keshava Reddy told the police he had no intention of escaping. “If I wanted to escape, I could have filed an insolvency petition,” he said.
