Three of India's leading companies, Adani Enterprises, JSW Steels and Sesa Goa, and three public sector institutions — including NMDC, India's largest mineral producer — are among hundreds of smaller companies accused by the Karnataka lokayukta of involvement in the state's growing mining scandal.
The intricate, ingenious details of a variety of crimes, including bribery and fraud, are listed over 464 pages of Justice Santosh Hegde's report, a copy of which is with Hindustan Times.
Shares of Adani, JSW, NMDC and Sesa tumbled as news leaked out of their involvement with illegal mining and export from Karnataka's Bellary district.One of India's largest trading houses, the $6.4 billion Adani Enterprises, has been accused of forging permits and bribing officials from at least seven state departments and politicians to export iron ore illegally from the port of Belekeri Port in Karnataka between 2006 and 2011.
"The Adani Enterprises has paid the bribes (sic) for getting undue favour for illegal exports," said the report. The Lokayukta has recommended canceling the company's export lease at the Port; blacklisting and barring it "from participating in any future contract, grant or lease, etc by the government"; criminal cases against officials and recovery of bribes.
"We cannot comment on the issue now as we are still reviewing the situation and are consulting our lawyers for the future course of action. We may offer our version in day or so," said an official spokesperson of Adani Enterprises Ltd.
The $5 billion JSW Steel, part of the O P Jindal Group, avoided state levies between 2006 and 2010 by receiving excess iron ore in overloaded trucks, paying only royalties due on the normal weight of trucks. More than 12 lakh tonnes were so processed by the company.
The excess minerals were the property of the state. "Hence it amounts to theft," said the report.
Justice Hegde said the state government "should take immediate steps" to recover Rs 342 crore from the suppliers and JSW Steels, which has a steel plant in Bellary district, the mining nerve centre.
"We haven't read a copy of the report yet so its too premature for us to comment on the issue," JSW spokesperson Sharmila Banerjee said.
The company is also accused of transferring, through a trail of bank transactions, Rs 10 crore to an educational trust run by the family of deposed chief minister BS Yeddyurappa on in March 2010.
There are three public-sector companies named as well, the most prominent being NMDC, India's largest iron-ore producer and exporter, run by the ministry of steel. It is accused of under-invoicing "high-grade" iron-ore exports by as much as 40% in 478 suspected cases between 2006 and 2010. The loss caused: Rs 2,222 crore. "The public-sector undertaking has incurred a huge loss," said Justice Hegde. "The concerned ministry government (sic) of India may take note of it and take further needful action.
The National Agricultural Cooperative Marketing Federation of India (NAFED) — its majority shareholding is with the Union government — one of India's largest cooperatives meant to help farmers, is accused of illegal export or iron ore to China between 2005 and 2006. "All the trade transactions and transport of iron ore to various ports is dubious and require further investigation," Justice Hegde said in the report.
Mysore Minerals Ltd, a Karnataka government company with 40 mining leases — one is a joint venture with JSW — is accused of misusing permits by classifying iron ore as waste between 2008 and 2010 to 90 companies and individuals."It is clear that the officials of MML have knowingly committed irregularities and illegalities," the report, recommending that they be "identified and dealt (sic) in accordance with law after conducting proper investigation".
In a meticulous listing of officials and their bribery rates at Belekeri Port, Justice Hegde noted that bribe amounts — "unaccounted and paid in cash" — had "progressively increased" from Rs 22 lakh in 200405 to Rs 48 lakh in 2005-06 to Rs 66 lakh in 2006-07 and Rs 1.28 lakh in 2007-08.