The Central Bureau of Investigation (CBI) on Monday searched the premises of JSW Steel’s plant in Bellary district and raided the properties of several mining companies in northeast Karnataka, besides offices of G Janardhana Reddy and some associates of the arrested magnate-politician. Several documents were seized in connection with the alleged multi-crore mining scam, official sources said.
The probe agency’s anti-corruption branch, which conducted the searches on Supreme Court orders, registered two regular cases against Reddy’s Associated Mining Company (AMC) and others including Deccan Mining Syndicate. The entities were charged under various provisions of the Indian Penal Code, Prevention of Corruption Act, Indian Forest Act and the MMDR Act, a CBI statement said.
It was in the morning that the CBI entered the premises of JSW’s plant in Toranagallu, and searched for documents in connection with the procurement of iron ore from the local mining companies.
The Mumbai-headquartered firm, founded by its chairman Sajjan Jindal, denied that CBI raided its premises. “They only searched for documents related to procurement of iron ore for our plant from the local mining companies. No documents have been seized,” a JSW official told Business Standard.
JSW has been procuring iron ore from various sources for its steel production needs, and “every tonne procured is accounted for, paid for and is in compliance with applicable rules and regulations”, the company said in a communication to stock exchanges.
Nonetheless, its stock slipped 7.07 per cent and closed at Rs 549.50 on the Bombay Stock Exchange. The stock has hit a high of Rs 585 and a low of Rs 540.
JSW Steel said it would “fully cooperate” with the CBI.
The CBI also raided the residence of B Nagendra, BJP legislator from Kudligi in Bellary district, besides the offices of AMC, owned by Reddy and his wife Laxmi Aruna, the residence of former AMC owner, offices of Deccan Mining Syndicate in Bangalore and seized several documents, official sources confirmed. It is said that Deccan Mining Syndicate has links with Janardhana Reddy’s company.
The CBI teams conducted searches on the residence of V Muniyappa, who was minister for mines in S M Krishna Government between 1999-2004.
It was on September 5 that Reddy, who was tourism minister in the BJP’s first government in Karnataka, was arrested from his Bellary residence — along with B V Srinivas Reddy, managing director of Obulapuram Mining Company. Both have been handed over to judicial custody in Hyderabad’s Chanchalaguda jail since then, except for over a week when they were in CBI custody for interrogation.
The spokesperson said CBI teams were also raiding houses of some Karnataka forest department officials in Davanagere and Chitradurga districts neighbouring Bellary in search of evidence on extent of illegal mining by the Reddys.
Two months ago, the final report on illegal mining submitted by Santosh Hegde, then the Karnataka Lokayukta, had put JSW Steel in the dock for what it termed “getting illegal supply of iron ore” far in excess of what it was permitted. JSW operates a 10 million tonnes per annum steel plant in Toranagallu.
Hegde’s report said JSW Steel and its suppliers caused a loss of close to Rs 325 crore to the state exchequer between April 2009 and July last year.
