The CBI has alleged that the state government led by YSR, had doled out many favours in the form of the Vanpic project, shipyard, the green field airport at Ongole, concessions to the project in the form of alienation of huge chunks of assigned and government lands to the companies floated by Prasad, exemptions for levy of stamp duty and registration charges, seigniorage fee etc.
Vanpic Projects Private Limited controlled by Mr Prasad has so far got about 13,000 acres of land in the project area as a quid pro quo, the CBI has alleged. In January 2008, Mr Prasad incorporated Matrix Enport Holdings Private Limited. In Febru-ary the same year, adviser to the government of Ras Al Khaima (RAK) Mr A.J. Jagannathan addressed the state expressing an interest to partner with the AP government in the proposed Vadarevu and Nizampatnam port projects on a government to government (G2G) basis. In March 11, 2008, the state government and the government of RAK signed an MoU for development of the Vanpic project.
The key provisions of the MOU were that RAK should contribute not less than 51 per cent of the project cost and that it could take an Indian partner. On March 29, RAK investment authority wrote to the state informing that Matrix Enport Holdings of Mr Prasad had come on board as the Indian partner. On the same day, Mr Prasad and RAK entered into a business agreement wherein RAK Infra held 51 per cent of the shares and Matrix Enport 49 per cent. Vanpic Ports Private Limited was incorporated with Mr Prasad and Matrix Enport as the original subscribers to the memorandum with the involvement of RAK.