Reddys run Amok

Published: Mon, 07/05/2010 - 07:12 Updated: Mon, 09/05/2011 - 08:00

CBI arrests former Karnataka minister Gali Janardhan Reddy on criminal charges related to the mining empire that he and his brothers run. Hardnews was among the first to report how the state government is hand in glove with the mining mafia.
Sanjay Kapoor Bangalore

Barely 48 hours before the BJP leadership converged at the Palace Ground in Bangalore to celebrate the second anniversary of the BS Yeddyurappa government in Karnataka, a determined Lokayukta of the state, Justice Santosh Hegde, urgently drove to Raj Bhavan to tender his resignation to Governor HR Bharadwaj. As the ombudsman mandated to fight corruption, Justice Hegde, by this move, was sending out a strong message that the BJP government was corrupt and it was sustained by the rapacious mining mafia of the state. 

Justice Hegde's decision to resign helped in bringing back focus on the brazen loot of natural resources and how its gargantuan illegal proceeds were subverting politics and public institutions in the region and at the Centre. Justice Hegde's bold move to show up the BJP's government in its true colours follows another exemplary decision by Governor Bharadwaj to refer a complaint of conflict of interest against Minister of Tourism, Infrastructure and Development Janardhan Reddy, also, the Managing Director of Obulapuram Mining Company (OMC). 

Bharadwaj, in an unusual, precedent-setting decision, had summoned Reddy to give an explanation for his manifest conflict of interest. As one who had administered the oath of office and secrecy, the governor had the right to question a minister when such charges were levelled against him. Later, the matter was referred to the Election Commission, which will take a decision shortly. 

Before the central BJP leadership browbeat him, Yeddyurappa, an old fashioned RSS pracharak, had been trying to figure out a way whereby he could wrest control of the government and the party from the Reddy brothers. Reports of how the Reddy brothers controlled transfers and postings of top officials not only in their own district and constituency, but also in Bangalore, have been rife for a while. An RSS leader told Hardnews that the Reddy brothers controlled not only the local party, but many central leaders. 

Sushma Swaraj, who had fought a Parliament election from Bellary, is their favourite for the prime minister's job in case the BJP comes to power next time round. In fact, she played a key role in snuffing out the crisis in the Karnataka government last year when Yeddyurappa and the Bellary Reddys fell out. Yeddyurappa then had gone on record to say that the Reddy brothers were looting the state. The central BJP leadership heaped humiliation on its chief minister when they asked him categorically to find a way to work with them. The message was clear: the BJP leadership gave greater importance to the Bellary Reddys and their illegal money-making mint than their own chief minister. 

It will be wrong to assume that the Bellary Reddys have only BJP for support. As any Reddy watcher would testify, their phenomenal growth is credited to late Andhra Pradesh Chief Minister, YS Rajsekhara Reddy, who died in a helicopter crash early this year. His powerful son, Jagan Mohan Reddy, who is stirring up things in Andhra Congress, hunts with the Bellary brothers. Reports of joint enterprises between the Reddys and Jagan are rampant in Bangalore and Hyderabad circles. Indeed, the relationship with Rajsekhara then and Jagan now allows the Bellary brothers to simultaneously have a deep hook in the Congress party. 

There are reports that Jagan's intransigence towards the Congress central leadership is fed by his relationship with the mine owners of Karnataka. Some senior Congress leaders are reportedly controlled by the Reddys. A particular party general secretary is believed to be quite close to them. A close relative of his is reportedly employed by them at a fancy salary. There are also allegations that BJP's support on the Women's Reservation Bill to Congress saw an interesting outcome: the conduct of the Bellary mining mafia was not discussed in Parliament.

The charges against the notorious Bellary brothers are serious. Or else, Justice Hegde would not have resigned. Nor would Bharadwaj have summoned Janardhan Reddy and subsequently refer the matter to the Election Commission to decide on the conflict of interest issue. 

For Justice Hegde, the last straw on the proverbial camel's back proved to be a revelation. This happened when a minister wrote to the chief secretary of the state that he should take action against a forest official who had seized illegal iron ore shipment worth Rs 1,750 crore. Typical of the last days of Sodom when evil takes over the affairs of the state, the upright were being punished for doing their duty. 

The Lokayukta had earlier submitted many reports about illegal mining, but the BJP government did not take them into cognisance. The office of Lokayukta had also accused the mining companies about destroying the Karnataka-Andhra inter-state boundary pillars to enlarge the mining permits of one state by encroaching into another. As many as 69 mining encroachments were detected by the Lokayukta. 

It is also estimated that 1.5 lakh tonnes of iron ore was looted as hafta everyday since last year. The total value of this loot is Rs 20 crore, which is used for greasing different cogs of the government. 

There are also allegations that Rs 4,000 crore worth of minerals have been exported to China through different ports. Needless to say, papers are ritualistically forged to facilitate this journey from the illegal mines of Bellary to the mineral hungry Chinese market. There are allegations that extensive under-invoicing is done with the foreign buyer to evade taxes and generate black money, which is again given to political parties and law enforcers. 

A chargesheet by Congress MLC, KC Kondiah, suggests that fictitious companies in Singapore, Hong Kong and Dubai are used for trade in iron ore and to generate black money. Much of the money is moved through hawala or other banking channels. Kondiah wanted this matter to be investigated by the CBI.

He has provided mind-boggling figures in his chargesheet. According to him, the illegal ore transported per day in the district of Bellary and Chitradurga is about 1.5 lakh tonnes per day. Penalty per truck of only 16 tonnes is Rs 25,000. The total penalty foregone per year amounts to Rs 8,554 crore, he estimates.

Kondiah, whose chargesheet was used by Governor Bharadwaj to summon the minister, Janardhan Reddy, wants the government of India and its agencies to ascertain the gigantic quantum of illegal mining by the Bellary mafia by collecting data from the ports of Goa, Karnataka, Tamil Nadu and Andhra Pradesh. By matching the export quantities against the legally mined leases of Andhra Pradesh and Karnataka, it might be possible to figure out the value of illegal exports. 

The extent to which the resolve of the government has been weakened by corruption and muscle power can be gauged by the amazing freedom these companies enjoy while bending rules and the boundaries of the state. A reign of terror and fear prevails in these mining areas where government employees cannot discharge their duties freely, and according to law. Due to this reason, for a long time, the criminality of the huge illegal empire of the Bellary mafia was not known, hidden by the iron curtain of money and goon power. 

Also not known was the manner in which they had enlarged their massive area of operation and influence. One employee of OMC, V Anjaneya, in a petition to the Supreme Court, blew the whistle on how the company has relentlessly engaged in well-oiled and organised unlawful activities. Refusing to submit to their unreasonable demands, Anjaneya quit the company and has agreed to be an approver for CBI. His petition to the SC, which is yet to be admitted, is a damning indictment of the company and the BJP-led state government. 

Claiming a threat to his life, Anjaneya wrote to CBI on December 25, 2009, regarding large-scale theft and illegal mining activities carried on by OMC and its sister concerns in reserved forest areas. He claims that the Reddy brothers grabbed mining leases of other companies through political influence and also shifted state boundaries by blasting the Sugulamma Devi temple and tri-junction points between the states. Anajaneya claims that one of the mines of Janardhan Reddy did not have commercial grade iron ore. To ensure that they meet the daily target of 15,000 tonnes of iron ore of high commercial grade per day, they had to resort to changing border points and mine areas in forests. Interestingly, they do dummy digging on their mine leases to satisfy inspectors etc. Anjaneya has supplied rejection-grade iron ore from OMC's officially leased mines to prove that the iron ore that their company supplies does not originate from their mines.

It is due to this reason and a huge network of criminality and profit that the boundary of Karnataka was shifted. Anjaneya says that the "main reason to shift boundary pillars was to excavate iron ore from Hind traders, MBT and T Narayana Reddy by blackmailing them to surrender to Janardhan Reddy". This would not have been possible without the ample influence and terror machinery of the Bellary brothers.

Anjaneya claims that the Bellary Reddys illegally mined 20 times more area in forests and other parts then they have been legally allotted. The illegally mined iron ore is moved out with impunity with the help of officials from Karnataka and Andhra Pradesh. No papers are generated to transport it since in this territory Janardhan Reddy's word is law. His sinister influence has brought railway lines to mining and dump areas, allowing the iron ore to be shipped, without papers, to any part of the country. 

He makes serious allegations that important documents were suppressed by the two state governments of Karnataka and Andhra from the Survey of India, which was mandated to figure out how the state boundaries had been tampered by the mining mafia. Indeed, far more is extracted from these mines than it is stipulated. And this illegal activity takes place to meet the export demands of the benami companies against whom letters of credit are drawn. Some banks are stated to be hand-in-glove in these operations and allow these muscle miners easy money. 

In March 2010, the Supreme Court had stopped OMC from all mining and asked a centrally empowered committee to look into its operations. The issue of state boundaries was also to be settled. On May 10, 2010, in one of his last significant orders, then Chief Justice, KG Balakrishnan, allowed the Bellary Reddys to mine in undisputed areas so long it was 150 metres away from the Karnataka border. This controversial judgement has given a new life to the Reddys and put all those who were challenging their corrupt empire, on the backfoot. 

However, the resignation by Santosh Hegde and the referring of Kondiah's complaint by Governor Bharadwaj to the Election Commission would keep the state minister, Janardhan Reddy, his notorious brothers, their patrons and the BJP government on tenterhooks. 

Meanwhile, how the Indian State responds to the organised pillage of natural resources would serve as a test case of whether they have the courage to serve the interests of the poor and disenfranchised, and take on corrupt profiteers and politicians. Any relief to the Bellary brothers from the BJP or the Congress at the Centre would deepen the impression, seriously highlighted by the Maoists, that the government at the Centre supports corrupt mining companies who have displaced tribals from their forests and indigenous land. The moot question is, can any government live endlessly with this anti-people image?

CBI arrests former Karnataka minister Gali Janardhan Reddy on criminal charges related to the mining empire that he and his brothers run. Hardnews was among the first to report how the state government is hand in glove with the mining mafia
Sanjay Kapoor Bangalore

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