July 06 2020
Illegal mining: CBI arrests Janardhana Reddy
04 September 2011

he Central Bureau of Investigation (CBI) has arrested mining baron from Karnataka G Janardhana Reddy after raids on his premises in an illegal mining case. Srinivas Reddy, the managing director of Bellary Mining Corporation and Mr Janardhana Reddy's brother-in-law, has also been arrested.

The CBI is investigating alleged illegal mining operations in the Reddys' Obulapuram Mining Company (OMC) in Andhra Pradesh. A 10-member CBI team raided the house of Janardhana Reddy in Bellary and office in Bangalore, and Srinivas Reddy's house in Bangalore. Sources say they were taken away by the CBI team with police escort.

Janardhana Reddy, along with his brothers Karunakara and Somashekara, owns the Obulapuram mining company. The brothers are not just billionaires and mining barons with huge influence in their area, they are also powerful politicians.

Obulapuram Minining Company is Andhra-Pradesh-based, along the Karnataka border, though the company's main office is in Bellary, the iron-ore rich district of Karnataka, about 300 km from Bangalore.

The Reddys are accused of mining far beyond the 25.9 hectares their company was allowed to mine in. The CBI alleges the Reddys mined deep into the Bellary Reserve forest area - which includes portions of both, Anantpur district of Andhra Pradesh and Bellary in Karnataka. The CBI says the Reddys have violated the state borders, including allegedly blasting the Sugulamma Devi temple on the border, which was a landmark.

The Reddy company has been accused of mining in areas not shown as designated; of showing much less mined ore than they have actually mined - it is alleged that they mined 27 lakh tonnes of ore illegally; of not paying royalty and also of mining on illegal leases.

Trouble in this case began for the Reddy brothers soon after former Andhra Pradesh Chief Minister YSR Reddy's death in a helicopter crash two years ago. A central empowered committee of the Supreme Court reported gross violations and said a mining lease to OMC extended from 2004 till 2017 by the YSR government was illegal. The committee suggested that mining be suspended till pillars were erected and boundary posts laid on the state border.

The Congress government of K Rosaiah in Andhra Pradesh suspended mining by OMC and sought the CBI probe in December, 2009. The Reddy brothers went to court and got a stay, but that stay was vacated in December, 2010.

The story of Obulapuram Mining Company begins in 2001 - a story of meteoric growth and then big trouble: Gali Janardhan Reddy, then 34 years old, set up the company with an initial capital of Rs. 10 lakh. By 2003-2004, OMC had taken over several mining leases directly or indirectly and had reported a turnover of Rs. 35 crores. In just five years, by March 2009, the turnover was Rs. 3,000 crore.

The BJP has tried to play down today's arrest as part of routine investigation. "It has been in public knowledge for a long time that Janardhana Reddy has been carrying on mining activity. He has been making claim that he's not done anything illegal...I don't see anything special in this. It's natural course of investigation. I am sure Mr Reddy will come out clean after proving to authorities that he is innocent and he has not violated any rules," senior BJP leader Dhananjay Kumar said.

The Congress was quick to retort, "Unfortunate that BJP spokesperson saying so. If you look at Bellary, it's obvious that national wealth has been looted... the Lokayukta said it is no no lesser than the 2G scam." The party's BK Hariprasad also tore into Dhananjay Kumar for saying that the Reddy's had played an important part in developing the BJP at the grass roots in Karnataka and that the party "has benefitted by their political activity."

Mr Hariprasad said, "Stern action should be taken. The spokesperson of BJP says he has developed BJP in Karnataka. The whole deal is taking place under the BJP high command. The high command has benefitted from this."

Till the Karnataka illegal mining issue blew up in the face of the BJP's BS Yeddyurappa government -  after the lokayukta's report severely indicted the then Chief Minister and the Reddy brothers among the many others - Janardhana Reddy was the minister of Tourism and Infrastructure. Of his brothers, one was the state's Revenue Minister, the other is a BJP MLA from Bellary. Janardhana Reddy is a member of the legislative council (MLC), Karnataka's Upper House.

After Mr Yeddyurappa was forced to step down amid huge pressure recently, the ruling BJP deided that it would not re-induct any one facing allegations in illegal mining cases into the new Cabinet of  Sadananda Gowda. The Reddy brothers joined the ranks of rebels and have since tried to push for ministerial berths, but to no avail.

Yesterday, former minister and a man very close to the Bellary Reddys, B Sreeramulu announced his resignation as an MLA, in a clear sulk over not having been inducted into the new Cabinet. Sreeramulu is also named in the Santosh Hegde report on illegal mining.

"My credibility is at stake. Nothing is greater than maintaining my credibility. I am hurt over the Lokayukta report indicting me in illegal mining. But I have not indulged in illegal mining," Sreeramulu said in Bangalore on Sunday. Though the Reddy brothers kept away from Sreeramulu's press conference, it was seen as political move from that camp to step up pressure on the BJP for at least one ministerial berth. (Read)

Former Karnataka Lokayukta Santosh Hegde's report is expected to lead to more trouble. "In my report, there is material to show that Obulapuram company has been doing illegal mining in Karnataka and that it forged licences, exporting via Andhra to ports in east coast like Vishakhapatnam, Kakinada and we have produced documents. Copies of which are with CBI also, "Mr Hegde claimed today.



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