Johnson T A
Bangalore: Between the financial year 2006-07 and 2010-11, the Andhra Pradesh-based Obulapuram Mining Company (OMC) of former Karnataka minister G Janardhan Reddy did not receive a single permit from the mining department in Karnataka to export iron ore.
Yet, data gathered by investigating agencies from 10 different ports in south India for the period shows that the OMC — with iron ore mining leases only in Andhra Pradesh — exported 71,61,455 MT of iron ore by claiming its point of origin as mines in Karnataka.
If there is one key fact nailing Reddy and his company in the CBI investigations, it is the disparity in the data for exports by the former minister’s company.
Much of the details of what is emerging as a widespread mafia-style iron ore smuggling business, spanning Andhra Pradesh and Karnataka, comes from the collation of information by investigating agencies as varied as the Karnataka Lokayukta, the Income Tax department and the Enforcement Directorate.
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Investigations by the Karnataka Lokayukta that resulted in a July 27 report have already highlighted the fact that OMC was being supplied iron ore by an elaborate network of front companies linked to Reddy and his associates involved in criminal smash and grab tactics in Karnataka. Lokayukta sources said the details of their investigation was provided to the CBI in an information sharing arrangement that is gradually unravelling the illegal mining mafia.
“The investigating team has reported that these export details requires further investigation. It has also stated that CBI is dealing with the matter in this regard and the said agency may take note of it,’’ the Karnataka Lokayukta report of July 27 had stated.
Lokayukta sources said Reddy finds himself at the centre of investigations along with B V Srinivasa Reddy, who is a partner and MD at OMC, on account of their day-to-day role in the activities of the company and as the brains behind it.
Others like Reddy’s brother, MLA Karunakara Reddy and their close associate B Sriramulu who resigned as an MLA on Sunday, played a less direct role but were direct beneficiaries of the illegal activities and could find themselves in the loop of investigations, sources said.
Apart from the fact that OMC exported iron ore obtained from unexplained sources the company is also accused of resorting to under invoicing during the course of their export activities between the years 2007-08 and 2008-09. The total loss to the national exchequer for the period from under invoicing has been put at Rs 215.12 crore by the Karnataka Lokayukta’s probe team.
Among other crucial findings that will have a bearing on the CBI probe in Andhra Pradesh into the mining business of Reddy and associates are the findings of the Income Tax department and Lokayukta on the activities of several benami companies linked to the Reddys.
One firm called Sri Bhakta Markandeshwara Minerals (SBMM) from Hospet in Bellary has a man called Kashi Vishwanath as its owner on paper. Investigations have shown that SBMM and at least two other similar benami companies are actually run by a man called Karapudi Mahesh who allegedly transports iron ore looted from mines in Bellary to ports around South India for export. Details from bank transactions and personal diaries of Karapudi Mahesh have revealed that he made regular payments under a “risk amount” column to a person identified in his diary as “G J Reddy Sir”.
In another illegal arrangement for obtaining iron ore, three companies, Devi Enterprises, Madhushree Enterprises and Sree Minerals, are alleged to have been floated as front companies of OMC. These companies were run by close associates of Reddy including OMC managing director B V Srinivas Reddy and Ali Khan, Reddy’s personal assistant.
These companies are alleged to have arm-twisted their way into legitimate mining areas, disputed mining sites, forest land or dormant mining sites and extracted iron ore for OMC’s supplies or export on their own. Payments made for the analysis of iron ore by Devi Enterprises and Madhushree Enterprises on behalf of OMC demonstrates that these companies were working as part of a mafia group, according to the Lokayukta report.
In 2009-10 alone, the illegal mining mafia from Bellary through its network of operatives and operations is alleged to have illegally exported a total quantity of 73,99,314 MT of iron ore from various port costing the exchequer an approximate loss of Rs 1849.82 crore at an average price of Rs 2500 per metric ton.