The Furore over The Report on Illegal mining in Karnataka, compiled by Lokayukta Santosh Hegde has already compelled Chief Minister B. S. Yeddyurappa to step down from his post; there is more to come.
The recent report submitted to the Karnataka government by Lokayukta Santosh Hegde has translated into the end of Chief Minister B. S. Yeddyurappa’s stint at the coveted post. The voluminous report probing the illegal mining scam in the state, which has charged the CM and Tourism minister G. Janardhana Reddy, goes on to recommend the initiation of criminal proceedings against Yeddyurappa. “I consider it necessary to recommend to the competent authority to take appropriate steps to initiate criminal proceedings against the Chief Minister and such other persons who are involved in the said transaction,” the report states, further calling for the removal of G. Janardhana Reddy from the Cabinet in view of his ‘misconduct’.
The latest development comes with the Supreme Court (SC) suspending all mining activities in Bellary. The 25,228-page report of the Karnataka Lokayukta detailed a web of deceit, including violation of mining and environmental laws, tax evasion and money laundering in international tax havens by the powerful brothers – Tourism Minister G. Janardhan Reddy, Revenue Minister G. Karunakara Reddy and Karnataka Milk Federation Chairman Somashekhar Reddy.
The report compiled by Hegde is based on the investigation report submitted by Chief Conservator of Forests and Head of the Lokayukta investigating team related to illegal mining, Uday Veer Singh, who has made an extensive study and submitted very elaborate report supported by documentary evidence. It is pertinent to note here that Singh, who is also the ex-officio CEO of the Bangalore Lake Development Authority, was attacked in the course of investigation. In an exclusive conversation with B&E just before he demitted office, Justice Hegde pointed out that the element of threat existed, perhaps more than ever. “With the SC having suspended mining in questionable areas, there is still threat and we have enhanced provisions for our security,” Hegde told B&E.
The bigger administrative challenge in Karnataka, however, will be to ensure how the revelations in the Lokayukta report are translated into reforms. “I think reforms are distant. It is because the state government alone cannot make the desired amendments. Much also needs to be done by the Centre,” says Hegde. “Moreover, the current mess of rampant corruption in mining in the state is not because policies are flawed, it is because the existing rules and regulations were given no heed,” Hegde explains, adding, “if the rules would have been followed, 70% of the illegal mining and allied activities would never have taken place.”
As per the report, 29.86 million MT of illicit iron ore, valued at Rs.122.28 billion, was exported between 2006-07 and 2010. The report details the complete breakdown of democratic governance in the Bellary area and uncovers the “zero risk system”, a protection and extortion racket, allegedly masterminded by G. Janardhana Reddy. The report describes the illegal money transfers to foreign companies and tax shelters by mining entities such as Obulapuram Mining Company, Associated Mining Company, GLA Trading and GJR Holdings owned by the Reddy Brothers. Even banks and public sector companies allegedly participated in the loot. NMDC, Adani Enterprise and JSW Steel are some major names in the list. Charges against these companies range from illegal movement of iron ore from mining yard without permits and without paying royalties, forest encroachment, mining lease violations, overloading of trucks and sandry violation, et al.
The extent of the scam is reflected in the findings that iron ore was illegally exported even to China through ports of southern India and payments were made through more than 4,000 banks account. The damage excessive mining has done to the environment has also been huge. The report says there have been severe ecological changes due to illegal mining.
For around five years, the Reddy brothers controlled the administration in impoverished Bellary, even flattened state boundary markers to excavate iron ore, all the way insisting they had no mining interests in Karnataka. Now, the reign of the rulers of the “Republic of Bellary” appears to be at an end. For the BJP though, the bigger challenge will be to keep them as far away from the government as possible.
With inputs from Sahana Attur (Bengaluru)
The latest development comes with the Supreme Court (SC) suspending all mining activities in Bellary. The 25,228-page report of the Karnataka Lokayukta detailed a web of deceit, including violation of mining and environmental laws, tax evasion and money laundering in international tax havens by the powerful brothers – Tourism Minister G. Janardhan Reddy, Revenue Minister G. Karunakara Reddy and Karnataka Milk Federation Chairman Somashekhar Reddy.
The report compiled by Hegde is based on the investigation report submitted by Chief Conservator of Forests and Head of the Lokayukta investigating team related to illegal mining, Uday Veer Singh, who has made an extensive study and submitted very elaborate report supported by documentary evidence. It is pertinent to note here that Singh, who is also the ex-officio CEO of the Bangalore Lake Development Authority, was attacked in the course of investigation. In an exclusive conversation with B&E just before he demitted office, Justice Hegde pointed out that the element of threat existed, perhaps more than ever. “With the SC having suspended mining in questionable areas, there is still threat and we have enhanced provisions for our security,” Hegde told B&E.
The bigger administrative challenge in Karnataka, however, will be to ensure how the revelations in the Lokayukta report are translated into reforms. “I think reforms are distant. It is because the state government alone cannot make the desired amendments. Much also needs to be done by the Centre,” says Hegde. “Moreover, the current mess of rampant corruption in mining in the state is not because policies are flawed, it is because the existing rules and regulations were given no heed,” Hegde explains, adding, “if the rules would have been followed, 70% of the illegal mining and allied activities would never have taken place.”
As per the report, 29.86 million MT of illicit iron ore, valued at Rs.122.28 billion, was exported between 2006-07 and 2010. The report details the complete breakdown of democratic governance in the Bellary area and uncovers the “zero risk system”, a protection and extortion racket, allegedly masterminded by G. Janardhana Reddy. The report describes the illegal money transfers to foreign companies and tax shelters by mining entities such as Obulapuram Mining Company, Associated Mining Company, GLA Trading and GJR Holdings owned by the Reddy Brothers. Even banks and public sector companies allegedly participated in the loot. NMDC, Adani Enterprise and JSW Steel are some major names in the list. Charges against these companies range from illegal movement of iron ore from mining yard without permits and without paying royalties, forest encroachment, mining lease violations, overloading of trucks and sandry violation, et al.
The extent of the scam is reflected in the findings that iron ore was illegally exported even to China through ports of southern India and payments were made through more than 4,000 banks account. The damage excessive mining has done to the environment has also been huge. The report says there have been severe ecological changes due to illegal mining.
For around five years, the Reddy brothers controlled the administration in impoverished Bellary, even flattened state boundary markers to excavate iron ore, all the way insisting they had no mining interests in Karnataka. Now, the reign of the rulers of the “Republic of Bellary” appears to be at an end. For the BJP though, the bigger challenge will be to keep them as far away from the government as possible.
With inputs from Sahana Attur (Bengaluru)
Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
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IIPM: Indian Institute of Planning and Management
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
For More IIPM Info, Visit below mentioned IIPM articles.
IIPM Best B School India
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM's Management Consulting Arm-Planman Consulting
IIPM Prof. Arindam Chaudhuri on Internet Hooliganism
Arindam Chaudhuri: We need Hazare's leadership
Professor Arindam Chaudhuri - A Man For The Society....
IIPM: Indian Institute of Planning and Management
