Reddy fiefdom in trouble

Will the Lokayukta’s leaked report be the final nail in the coffin for the Reddy brothers and their confidante B Sriramulu ?The answer seems a big ‘yes’, going by what Lokayukta Justice Santosh N Hegde revealed to a section of reporters on Thursday.
“We’ve gathered information on money laundering activities by Obulapuram Mining Corporation (OMC) owned by the Bellary ministers-cum-mining magnates in Andhra Pradesh,’’ said an official who is part of the investigating team.
Asked about this, Justice Hegde confirmed there were instances of money made through illegal mining being parked in tax havens overseas. “We are bound to recommend that the Enforcement Directorate (ED) inquire into the affairs of OMC,’’ he added.
Tourism minister G Janardhana Reddy and his family, revenue minister G Karunakara Reddy and health minister B Sriramulu are the original partners of OMC. Sensing trouble, the Reddy brothers had some time ago resigned as partners.
Justice Hegde said there are instances of OMC where the money earned against iron ore exports is not being brought back to India.
He said the company run by the Reddy brothers has evolved a “zero risk’ ’ system. “The miners in Bellary were being forced to give them 40-50 % of iron ore to the Reddys solely to transport it to the nearest ports.”
Lokayukta sources also said the report is backed by documents pertaining to several transactions worth crores of rupees in the accounts of the Reddy brothers in Vikas Cooperative Bank in Bellary, and dubbed it
the “Swiss Bank of Karnataka’’.
The Lokayukta, however, said he expects the ED, Supreme Court-appointed Central Empowered Committee (CEC) and other agencies to take the investigation forward as it involves foreign transactions. “Following leakage of the report, some investigating officials from the ED and CEC called to request me to send the report and I will oblige them under RTI,’’ he added.
Reddys own 40% of Bellary mining
The powerful overlords of Bellary, the Reddy brothers have consistently maintained that they do not have mining interests in the district. Their legitimate interests are across the border in Andhra Pradesh. But the Lokayukta report on illegal mining finally documents how the Reddy brothers control mining in the district without ostensibly having any mining licences. The Reddys, by controlling the administrative machinery from top to bottom in the district, force all miners to part with up to 40-45 % of their production. In street language, it would be called ‘hafta’. So roughly, half the iron ore mined in Bellary goes into the pockets of the Reddys.
‘I TAKE FULL RESPONSIBILITY FOR THE LEAK’
For once, Lokayukta Justice Santosh N Hegde was not at his usual best — enterprising, bold and outspoken. A day after the explosive report on illegal mining was leaked to the media, he appeared angry, forlorn and distraught. Forgetting words and fighting back tears, Justice Hegde, in his first reaction to reporters on Thursday said: “I feel really let down and cheated but don’t want to blame anyone. I take full responsibility for the leak.’’
Hegde later held two meetings with his team of officials to combat their downbeat mood and decide on the future course of action. The Lokayukta and other officials had initiated investigation into illegal mining a year ago but many among them feel their painstaking efforts have gone in vain. Earlier last week, Justice Hegde had grown emotional during an interview with a television channel, when he spoke about his confidante director (vigilance) U V Singh, who also broke down in the recorded version recalling an attack on him while inspecting encroachment of a lake.