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Mining czar Reddy held in early morning swoop

india Updated: Sep 06, 2011 01:23 IST
Samar Halarnkar
Janardhana Reddy


More than 30 kg of gold and Rs 1.5 crore in cash was found by the Central Bureau of Investigation in a swift, secret, early morning raid, that led to the arrest and imprisonment of powerful former Karnataka BJP minister Gali Janardhan Reddy.

After a two year investigation, started at a request from Andhra’s Congress government, the CBI also arrested Srinivas Reddy, Janardhan’s brother-in-law and managing director of the Reddys’ controversial Obulapuram Mining Company (OMC), who has been sentenced to 14 day custody along with Janardhan Reddy.

Officials also searched the government bungalow of Reddy aide G Sriramulu, former BJP health minister, in Bangalore.

On Monday evening, a special court sent Janardhan and Srinivas to 14 days in the custody of the CBI. The next hearing is on September 4.

"I am innocent," said Reddy outside the court before sentencing.

“The truth shall prevail.”

Janardhan faces various criminal charges related to the Andhra Pradesh branch of the two state multi billion dollar mining empire he runs with family and two brothers, popularly called the Bellary brothers.

In the morning, CBI officials drove Janardhan, an OMC director, to Hyderabad — more than 500 km northeast of Bangalore — in his own Toyota Innova, an Indian flag on its hood carefully wrapped up.

The CBI seized Janardhan’s private helicopter, named “Rukmini”, some cars, froze bank accounts, and took away a laptop, a diary and other documents from his home in Bangalore.

Other CBI officials questioned his wife, Aruna Lakshmi, in the Reddy home fief of Bellary, 300 km north of Bangalore.

The cash and gold were found in both houses.

The raids continued all day. Monday’s arrests and raids are not connected to the report of the Karnataka anti-corruption ombudsman, the Lokayukta, submitted 41 days ago, accusing Janardhan, brothers Somashekhar and Karunakara (one a fomer BJP minister, the other, head of a milk federation), former chief minister BS Yeddyurappa, and more than 700 officials and politicians of involvement in illegal mining across the district of Bellary.

The arrest was the latest blow to south India’s only BJP government, riven with feuding factions after the party forced Yeddyurappa to resign following the Lokayukta report.

The three Reddy brothers, accused of running a parallel government called the “Republic of Bellary”, were dropped from the ministry of new chief minister DV Sadananda Gowda.

As angry Reddy supporters took to the streets in Bellary, a former Congress stronghold, their party accused the Congress of political vendetta. But there was confusion over the stand the party should take after the arrest of Janardhan, who is close to senior BJP leader Sushma Swaraj.

"This is definitely a setback to the party, especially given the situation in the state. With this, the infighting within is also likely to increase, particularly given the close affiliation of some senior leaders with the Bellary brothers. This is just an unnecessary front that we have to battle now," said a senior party leader who did not wish to be identified.

The party stance in Karnataka was belligerent.

“The CBI stands for Chor Bachao Institution and Congress Bureau of Investigation,” said former health minister and Reddy confidant Sriramulu, a day after he announced his resignation as BJP MLA because he was dropped from the cabinet.

“My children cried today when the CBI came…Sonia Gandhi is behind this.”

“The CBI is working under the Congress’ orders,” said BJP state president K S Eshwarappa.

“The BJP respects law and democracy; we are confident that Reddy will be proven innocent.”

A more nuanced take came from BJP Member of Parliament (MP) Dhananjaya Kumar, who said Janardhan’s arrest was part of a “routine investigation” ordered by the high court.

“Mining is the private affair of Mr Reddy,” said Kumar.

“The BJP can only hope and pray that Mr Reddy can prove to the court he has not violated the laws of the land.”

Across the border, another Reddy who knows the brothers, was infuriated when journalists asked him for reactions.

“This is not ethical, it is beneath, under the belt,” said an angry Jagan Reddy, Congress rival and son of former Congress chief minister YS Reddy.

“How is Janardhan Reddy connected to me? You ask him (Janardhan), you ask the BJP.”

The Congress hand?

The case that led to Janardhan Reddy’s arrest was registered after a request from the Congress run government of Andhra Pradesh, “and further notification from govt of India,” says a CBI release.

The Andhra Pradesh high court stayed the investigation on December 14, 2009. A division bench vacated the stay on December 16, 2010, after a CBI appeal.

The court ordered the CBI to probe only illegal mining, not the allegation that the Reddy brothers moved state-boundary markers, which is being probed by a Supreme Court committee.

Since then, the CBI gathered 1,530 documents, collected 112 iron-ore samples and interrogated 85 people, witnesses and suspects.

“Whether in Bihar, or Gujarat, or any other opposition-ruled state, the Centre has been using the CBI as a political puppet for the last four years”, alleged DV Sadananda Gowda, Karnataka chief minister.

Reddys and their empire | Lokayukta report on illegal mining | Report about Reddy bros | Does Reddy brothers' arrest mark a turning point in fight against corruption?