The Central Bureau of Investigation (CBI) special court in Hyderabad on Monday arrested former Karnataka infrastructure minister Gali Janardhan Reddy and his cousin, Obulapuram Mining Company (OMC) managing director Srinivas Reddy, opening a new chapter in Karnataka and Andhra Pradesh’s mining politics.
The duo were arrested by CBI officials in Bellary on Monday morning and sent to 14 days’ judicial remand. The arrests were based on alleged violations committed by OMC in Andhra Pradesh.
CBI officials also seized Rs 3 crore in cash and 30 kg gold from the residence of Janardhan Reddy and Rs 1.5 crore cash from Srinivas Reddy’s residence in Bellary.
The Andhra government led by then chief minister K Rosaiah had sought a CBI probe into various allegations, including illegal mining, forest land encroachment and other activities involving OMC in Anantapur district in November 2009. While the company owned by the Reddy brothers had a single mining lease for an area of 29 hectares in Obulapuram from 2002 to 2007, it got two more mining leases. One was over 33 hectares and the other 68, in the same area in 2007, when Y S Rajasekhara Reddy was chief minister.
The fresh leases were granted to OMC for captive use in the light of a very large integrated steel plant proposed to be set up in Kadapa district by Janardhan Reddy’s Bramhani Steels. However, the lease orders issued by the government mentioned no such condition, thus allowing the company third-party sales.
While allotting the leases, the state government invoked the captive usage clause and ignored the first come first served rule in the case.
While that led to a huge political outcry after YSR’s death, the legal recourse sought by other mining companies against OMC’s alleged encroachment of their areas had led to the Supreme Court’s intervention.
In 2009, the apex court had ordered the stoppage of all mining activities in Obulapuram after the Central Empowered Committee appointed by it found several violations, including encroachment of forest land by OMC.
Following the court directions, the state government sought an inquiry by the CBI against OMC. The investigative agency filed an FIR in 2009, naming the OMC promoters along with some unknown public servants in the Andhra Pradesh government as the accused.
CBI joint director V V Laxminarayana, who is heading the investigation, said Janardhan Reddy had been booked under several sections and Acts, including section 120 B, 420, MMDR (Mines and Mineral development and Regulation), Forest Conservation Act and Forest Act.
Meanwhile,the state government has decided to cancel the allotment of over 8,000 acres given in the past to Janardan Reddy’s companies for setting up a steel plant and an airport.
A red-faced Karnataka unit of the BJP charged the ruling Congress at the centre with misusing the CBI to settle political scores. Chief minister D V Sadanand Gowda refused to comment on the Reddys’ arrest.
