The Andhra Pradesh government on Tuesday ordered a probe into the alleged irregularities by the Obulapuram Mining Corporation (OMC) owned by Karnataka Tourism Minister G Janardhana Reddy.
Chief Minister K Rosaiah has constituted a three-member committee to probe the allegations. The committee has been asked to submit its report in 10 days, an official said.
The committee would also include a representative from the department of industries.
This is the first time that the Andhra Pradesh government has ordered a probe against the mining interests of the powerful Reddy brothers, who had almost pulled down the Bharatiya Janata Party (BJP) government in Karnataka last week.
The probe was ordered following a demand from the Telugu Desam Party (TDP) and other opposition parties for a comprehensive probe into allegations that OMC illegally shifted iron ore worth Rs.5 billion from Karnataka to Andhra Pradesh.
The probe was ordered a few days after a forest official in Anantapur district served notice on OMC for irregularities. This was the fifth notice served on the firm by authorities for various irregularities since October 26.
The notices pertain to complaints on illegal mining, encroachment of reserve forest area as well as other companies' mining areas, construction of illegal roads in the forests and transporting ore in violation of the permits.
The authorities in Andhra Pradesh started tightening the screws on OMC following the death of then Chief Minister YS Rajasekhara Reddy in a helicopter crash on September 2.
Rajasekhara Reddy was considered close to Janardhana Reddy and his brothers and the two families share business interests.
Anantapur Divisional Forest Officer (DFO) Kallol Biswas had issued notice on November 1 asking the OMC to explain why the iron ore mined outside the lease area was being illegally transported from Karnataka to Andhra Pradesh using unauthorised roads.
The official claimed that the company destroyed the boundary pillars between the mining lease areas between the two states for this illegal activity.
The opposition parties in Andhra Pradesh had been targeting Rajasekhara Reddy's government for extending the mining lease of OMC and allowing it to indulge in irregularities.
TDP president N Chandrababu Naidu has demanded that the mining licence of OMC be cancelled. He alleged that the illegal mining by the firm caused huge losses to the state during the last five years.