In a missive sent by the CBI’s Anti-Corruption Branch to the Chief Secretary of Karnataka in September 2017, the investigating agency has cited technical reasons for closing the preliminary investigation in the case.

A quiet burial for some of the mining cases against Janardhana Reddy
news Crime Thursday, November 16, 2017 - 09:27

A few years ago, the involvement of Gali Janardhana Reddy, one of the most powerful mining barons in the country, in illegal mining had become a national scandal.

One of the main cases in the Rs 35000-crore illegal mining scam in Karnataka first exposed by JD(S) leader Kumarawamy and then investigated by former Lokayukta Santosh Hegde has been closed by the Central Bureau of Investigation.

In a missive sent by the CBI’s Anti-Corruption Branch to the Chief Secretary of Karnataka in September 2017, the investigating agency has cited technical reasons for closing the preliminary investigation in the case.

This was in connection with the cases of illegal export of iron ore from Karnataka through the Mangalore port. The missive was sent four years after a probe was ordered against Janardhana Reddy.

“My report had stated that more than 12.57 crore metric tonnes iron ore was transported from ports in Goa. 2.4 lakh metric tonnes iron ore was deposited in the port in Belekeri. This iron ore did not vanish all of a sudden. Where is the accountability? Someone has to be answerable. Where did the ships come from to export all the iron ore? After submitting documented proof, the effort has been wasted,” Santosh Hegde, the former Lokayukta said.

Janardhana Reddy after he got bail in January 2015

He said that the Lokayukta team, which had unearthed the scam, documented the case meticulously. “All the documents were attached with the report. So, was the material provided of no merit at all? Should we think about how the justice system works? I am sorry that it turned out this way,” he added.

There are 63 cases against Janardhana Reddy, some of his family members and associates in both Karnataka and Andhra Pradesh. Out of these, 10 cases are concerning the Belekeri port, the chargesheet hasn't been filed in some cases as the investigation is still going on. Twenty-eight of these cases are with the CBI in which chargesheet has been filed in almost all.

All cases related to illegal transportation of iron ore from ports in Mangaluru, Karwar, Krishnapatnam and Goa have been disposed of due to lack of evidence.

“The cases involving Obalapuram Mining Company have not yet started. There was also a case against his wife Aruna but no appeal has been filed after a CBI special court discharged all the accused in the case,” Hegde said.

“Everyone was involved in this scam. The BJP, Congress, JD(S). Everyone. So they are helping each other,” Santosh Hedge said.

With cases related to Reddy falling flat, the Congress party is now alleging that he has the Centre’s support. Congress leaders allege that the CBI is a mere puppet of the NDA government, which is why those involved in the mining scam were being given clean chits.

“The Union government is misusing the central agencies like CBI, I-T and ED. Now the CBI has washed its hands off the illegal mining cases,” Home Minister Ramalinga Reddy said.

Joining the bandwagon, JD(S) President HD Kumaraswamy is now alleging that the BJP made a deal with Reddy to let him off the hook if he coughed up Rs 500 crore. “There is a fixed deal. Reddy would give Rs 500 crore to BJP for the next election and all cases against him would be rendered too weak to probe. Why do you think properties that had been seized from him are now being given back?” Kumaraswamy asked.

Meanwhile, Yeddyurappa has refuted the claims and turned the tables on the Congress. “The Congress government has set up a committee for tackling illegal mining but what is it doing? Nothing. What about the closure reports involving cases against sitting Congress Minister Santosh Lad?” Yeddyurappa said.

Janardhana Reddy’s rise and fall

The Reddy brothers – Janardhana, Karunakar and Somashekhar were sons of a police constable. The ambitious brothers set out to make it big. Janardhana Reddy, however, was the one who hit the jackpot. In 2001, Janardhana Reddy bought the Obalapuram Mining Corporation (OMC) for Rs 5 crore. When the prices of iron ore skyrocketed in 2002, luck favored Reddy and he made huge profits.

Soon they had massive holdings in both Andhra Pradesh and Karnataka’s Ballari district. They also made inroads into politics by helping BJP’s Sushma Swaraj fight against Congress heavyweight Sonia Gandhi.

B Sriramulu and Janardhana Reddy with BJP leader Sushma Swaraj

They tried to break into the ranks of the Congress in Karnataka through their trusted friend B Sriramulu. This did not pan out as Sriramulu lost the 1999 assembly polls. The Reddy brothers jumped ship and decided to strengthen the BJP’s reach in Ballari.

They had moved on to living in lavish mansions from the humble two-room house they grew up in. They displayed their wealth for everyone to see but they also made it known that they were “philanthropic”. The Reddys run an old age home and a residential school for intellectually disabled children in Ballari. 

Reddy soon had the support of the people, especially after he began campaigning for the SC, ST and Backward castes in the region along with Sriramulu.

Back then, they bagged 23 assembly seats for BJP and were responsible for the BJP’s win in the 2008 polls.  

The brothers also maintained links with the Congress in Andhra Pradesh by rubbing shoulders with former Chief Minister YS Rajashekhar Reddy. His son Jagan Mohan Reddy became a partner in Brahmani Steels, one of the Reddys’ holdings.

Flush with money and political backing, the Reddy brothers became unstoppable. It was former Lokayukta Santosh Hegde’s report on their illegal mining which exposed Janardhana Reddy’s power and influence.

Reddy was accused of mining iron ore from properties which belonged to other miners in the region and selling it under the banner of the OMC and the Associated Mining Company. 

The scandal had shaken the political power structure in Karnataka. And then CM Yeddyurappa was faced with the eventuality of a government collapse. Yeddyurappa had fired his close allies when Reddy’s influence grew and had finally wept in public when he lost his post as the state’s Chief Minister. Reddy was arrested and the BJP distanced itself from the mining baron.

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