New documents nail the Reddy brothers’ lie. They do own mines in Karnataka


By Imran Khan

Janardhan Reddy (centre)
Miner baron Janardhan Reddy (centre) will have a lot to answer for once the Lokayukta submits its final report by the end of this month
Photo: Shailendra Pandey

THE REDDY brothers of Bellary are at it again. The mining barons who also hold powerful ministerial portfolios in the state BJP government have always maintained in the Assembly — and outside it — that they have nothing to do with the illegal mining in the state, and neither do they own any mine in Karnataka. However, fresh documents available with TEHELKA make it evident that state Tourism Minister G Janardhan Reddy not only owns mines in the state but has even indulged in illegal mining.

 The matter came to light after the Lokayukta team, led by Santosh Hegde, investigating illegal mining in the state stumbled upon a document of the Associated Mining Company, which has a mining contract in the Ramghad area of Karnataka. The document shows that the 44-year-old Reddy and his wife G Lakshmi Aruna, 36, have displaced the original owners of the company, and become sole owners.

The process of the ownership transfer, as shown in the Admission Deed, is a dubious one. According to the deed, the original owners of the company, KM Parvathamma, 69, and her son KM Vishwanath, 44, entered into an agreement with Reddy, whereby he and his wife Aruna were made partners in the company on 31 July 2009.

Covering the need for a third partner in the company, which the documents state arose due to the retirement of Master KM Ashish, the original partner, from the firm on 15 July 2009, the paper stipulates that, for the purpose of “smooth functioning of the business” and “capital requirements”, Reddy and his wife were inducted in the company as working partners.

The profit sharing of the business was also categorically stated, wherein the original owners Parvathamma and her son, shared a 2 percent and 78 percent profit margin. The Reddy couple would get 10 percent each of the profit arising out of the mining in the 25 acres (10.12 hectares) of Ramghad area of Sandur Taluk. The company had obtained a mining lease (No. 625/2434) for a 20-year period.

Janardhan pushed for nationalisation of mines. So, what happens to the one he owns?

Incidentally, on 1 August 2009, the very next day of the signing of the deed, the original owners of the company retired and this time, a retirement deed was executed. In the new deed, Reddy and his wife were declared the sole owners of the mining company. All assets and liabilities of the firm, including books and accounts were handed over to them.

Also intriguing is the fact that the original owners of the company retired with only a nominal amount of Rs 1 crore for the 25 acres of profitable mining land in Ramghad, which according to the Lokayukta report of 2009, has one of the highest deposits of iron ore in the entire Hospet-Sandur-Bellary region. The agreement copy says that “since the second party (original owner Vishwanath) has put in Herculean efforts for the purposes of obtaining statutory clearances and renewal of the mining lease, an amount of Rs 1 crore is being paid as compensation to him”. When contacted, Vishwanath refused to comment on the matter.

A senior official of the Lokayukta also pointed out that according to Section 37 of the Mining Act, 1960, any transfer of lease or mortgage of mining licences has to be cleared by the state or Central government. “If you look into the object of the Act, it states that the character of the original owner needs to be scrutinised by the authorities. If the constitution of the company changes, then the authorities will have to scrutinise who the other members are,” he said on condition of anonymity. “In this case, it wasn’t done as the Reddy brothers had continued mining in the area obtained by them until 2010.”

Lokayukta Hegde refused to say anything on the matter. “Since the final report is coming out at the end of the month, I would not want to comment on it just yet,” he says.

Others remain sceptical about the whole issue. “This isn’t the only case where a direct link connecting the illegal mining of the Reddy brothers has been established,” says SR Hiremath of Samaj Parivarthan Samudaya, a Dharwad-based NGO. It was on Hiremath’s complaint that the Supreme Court-appointed Central Empowered Committee (CEC) of four members came down to Bellary on 25 March this year to investigate the case of illegal mining and land acquisition.

Drawing attention to an FIR filed on 10 September 2009, where a case of illegal mining in the areas of Ramghad was filed against BJP MLA and chairman of Karnataka Milk Federation, G Somashekar Reddy, and his close associates, Hiremath said: “Even though a year-and-a-half has passed since the complaint was filed by Ramalingaiah H of the Department of Mines and Geology, Hospet, no action has been taken so far.’’ Even so, there is a chance that this might cause the brothers discomfort.

OF LATE, the going has been far from easy for the Reddy brothers, with several investigating agencies closing in on illegal mining in the state. The Central Bureau of Investigation (CBI) in Hyderabad had recently taken into custody BV Srinivas, MD of Obalapuram Mining Company, and Manager PM Shiva Kumar for interrogation. And it is likely to question Janardhan Reddy too in the matter.

The wind is blowing in the same direction in Karnataka as well, with the Lokayukta all set to come out with its final report on illegal mining in the state by the end of April. If rumour mills are to be believed, the report is likely to implicate the Reddy brothers. But, that remains to be seen.

Having gauged the situation himself, Janardhan Reddy, the most powerful of the Reddy brothers, said in the Legislative Council last month that he would not undertake any mining business in Karnataka and dedicate himself to politics. He even went so far as to demand that all the mines in the state be nationalised.

This new information about Janardhan Reddy owning a mine in Bellary and indulging in illegal mining clearly belies his public pronouncements. It will also give the Opposition — some of whose members too are tainted in the illegal mining business — an opportunity to attack the Reddy brothers in the wake of the fresh evidence that has surfaced.

Imran Khan is Correspondent with Tehelka


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