Obulapuram Mining Company

{{unreferenced section|date=April 2014}}

The Income Tax Department, Karnataka and Goa Investigation and Central Commissionerate had unearthed under-invoicing and tax evasion of around by the Obulapuram Mining Company (OMC), run by Karnataka's Reddy brothers and also their trusted confidante and state health minister B Sriramulu which sparked off the entire investigation into discrepancies into mining in the State of Karnataka.{{Cite news |date=2016-11-21 |title=I-T Dept. conducts inquiry at Janardhan Reddy’s offices in Ballari |url=https://www.thehindu.com/news/national/karnataka/I-T-Dept.-conducts-inquiry-at-Janardhan-Reddy%E2%80%99s-offices-in-Ballari/article16670809.ece |access-date=2024-03-15 |work=The Hindu |language=en-IN |issn=0971-751X}}

The investigation found massive tax evasion and money laundering prompted mass panic amongst the then BJP government in Karnataka.{{Cite news |date=2012-10-05 |title=Obulapuram Mining Company scam: CBI seeks custody of Reddy's aide |work=The Economic Times |url=https://economictimes.indiatimes.com/industry/indl-goods/svs/metals-mining/obulapuram-mining-company-scam-cbi-seeks-custody-of-reddys-aide/articleshow/16688986.cms?from=mdr |access-date=2023-07-04 |issn=0013-0389}} A team of officers found that the OMC had entered into a MoU with a one-dollar company of Singapore to camouflage the company's income suppression.{{Cite web |date=2016-11-21 |title=IT Raids at Janardhana Reddy’s Offices After Rs 500-Crore Wedding |url=https://www.thequint.com/news/politics/income-tax-department-raid-janardan-reddy-obulapuram-mining-company-bellary-500-crore-wedding-cbi-demonetisation |access-date=2024-03-15 |website=TheQuint |language=en}} Officials found that the one-dollar company, GLA Trading International (GLATI), was established on 30 November 2007, with Janardhana Reddy as one of its directors. GLA, presumed to be named after Janardhana Reddy's wife Gali Laxmi Aruna, has offices in Singapore, Dubai and the British Virgin Islands, which is a `tax haven'. The investigation report held that "OMC's transactions through the MoU with GLATI are convoluted and devised to evade tax payment in India,"

A comparative study of shipping bills for export with other companies, which are exporting the same grade material, confirmed the malpractice by OMC. According to the report, OMC signed the MoU with GLATI to sell iron ore only to evade tax payment in India.

When the Commissioner summoned Janardhana Reddy and sought explanation from OMC, the Reddys claimed it suppressed sales for developing stronger relationship worldwide with global buyers through GLATI for financial stability against price fluctuations.

This report was recorded in the book Let us Share by the Finance Ministry.

The Lokayukta Report on illegal mining in Karnataka {{cite web|url=http://www.deccanherald.com/content/179715/download-lokayukta-report-illegal-mining.html|title=Download Lokayukta report on illegal mining |date=28 July 2011 |publisher=Deccan Herald}}{{cite web|url=http://www.deccanherald.com/images/editor_images1/2011/07/28/MINES%20PART-II.pdf|title=Lokayukta report on illegal mining (PDF) |publisher=Deccan Herald}}{{cite news|url=http://www.thehindu.com/news/resources/article2302391.ece|title=Karnataka Lokayukta report on illegal mining |work=The Hindu | location=Chennai, India|date=2011-07-28}}{{cite news|url=http://www.thehindu.com/multimedia/archive/00736/Report_on_the_refer_736286a.pdf|title=Karnataka Lokayukta along with the Income Tax Department and UV Singh report on illegal mining (PDF)|work=The Hindu | location=Chennai, India}} details the methods in which miners, government officials and ministers colluded to defraud the government of mining revenues. The report details the complete breakdown of democratic governance in the bellary area {{cite web|url=http://www.deccanherald.com/content/179809/report-uncovers-govt-miners-nexus.html|title=Report uncovers govt-miners nexus |date=29 July 2011 |publisher=Deccan Herald}}{{cite news|url=http://www.thehindu.com/news/states/karnataka/article2302887.ece|title=An ecosystem of fraud |work=The Hindu | location=Chennai, India|date=2011-07-29}} and uncovers the "zero risk system", a protection and extortion racket, masterminded by G. Janardhana Reddy.{{cite news|url=http://www.thehindu.com/news/states/karnataka/article2302226.ece|title=Report details Reddys' rule over 'Republic of Bellary' |work=The Hindu | location=Chennai, India|date=2011-07-28}}{{cite web|url=http://www.deccanherald.com/content/179763/zero-risk-system-illegal-mining.html|title=The 'zero risk system' of illegal mining |date=28 July 2011 |publisher=Deccan Herald}} 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.{{cite web|url=http://www.deccanherald.com/content/179681/reddy-firm-broke-many-laws.html|title=Reddy firm broke many laws |date=28 July 2011 |publisher=Deccan Herald}}{{cite web|url=http://www.indianexpress.com/news/2-reddys-friend-ramulu-tax-fraud-threats-illegal-mining/824100/0|title=2 Reddys, friend Ramulu: 'tax fraud, threats, illegal mining' |date=29 July 2011 |publisher=Indian Express}}

{{tone|section|date=December 2020}}

Janardhana Reddy along with his brother-in-law, B. V. Srinivas Reddy was arrested on 5 September 2011 by the CBI, taken to Hyderabad, the Capital of the neighboring Andhra Pradesh and remanded to judicial custody in Chanchalguda Jail.{{cite news| url=http://www.thehindu.com/news/states/karnataka/article2425782.ece|title=CBI arrests Janardhana Reddy, Srinivas Reddy |work=The Hindu | location=Chennai, India|date=2011-09-05}}{{cite news| url=http://www.thehindu.com/news/national/article2426436.ece?homepage=true | location=Chennai, India | work=The Hindu | first=Our | last=Bureaus | title=In pre-dawn swoop, CBI arrests Janardhan Reddy, kin in Bellary}} He is accused of being involved in the illegal mining and export of iron ore in Bellary and Anantapur. This investigation is the culmination of a recommendation to CBI by the former Andhra Pradesh chief minister Rosaiah and not directly related to the findings of Lok Ayukta Santosh Hegde on illegal mining in Karnataka.{{cite web| url=http://www.mid-day.com/news/2011/sep/050911-cbi-arrests-janardhana-reddy.htm|title=Karnataka mining baron Janardhana Reddy arrested |publisher=Mid Day}} The CBI submitted a charge-sheet in the ongoing investigation.{{cite news| url=http://www.thehindu.com/todays-paper/tp-national/tp-andhrapradesh/article2685779.ece|title=OMC: CBI files 186-page charge sheet December 4, 2011|work=The Hindu | location=Chennai, India|first=N.|last=Rahul|date=2011-12-04}} The CBI also arrested senior officers of the IAS, V. D. Rajagopal and Y. Srilakshmi, as third and fourth accused respectively.{{cite news| url=http://www.thehindu.com/todays-paper/tp-national/tp-andhrapradesh/article2713127.ece|title= Rajagopal has role in 'benami' mining: CBI|work=The Hindu | location=Chennai, India|date=2011-12-14}}{{cite news| url=http://www.thehindu.com/news/cities/Hyderabad/article2678413.ece|title= Srilakshmi sent to Chanchalguda jail|work=The Hindu | location=Chennai, India|date=2011-12-02}}{{cite news| url=http://www.thehindu.com/todays-paper/article2654668.ece|title= Rajagopal, Sri Lakshmi accused of fraud|work=The Hindu | location=Chennai, India|date=2011-11-24}} V. D. Rajagopal, the former Andhra Pradesh Director of Mines, Vice-Chairman and Managing Director of AP Mineral Development Corporation is accused of preferential treatment to Obulapuram and denying mining licenses to other applicants. The permission for mining in Anantapur was for captive mining, i.e. the ore mined in that region is to be used in the local steel plant and not to be exported. Y. Srilakshmi former Andhra Pradesh Secretary Industries, is accused of dropping the term "captive mining" in the final order approving a mining license to Obulapuram. Srilakshmi claimed that this was done at the insistence of the former Minister of Mines and current Andhra Pradesh Home minister Sabitha Indra Reddy.{{cite news| url=http://www.thehindu.com/todays-paper/article2676337.ece|title=Srilakshmi blames Sabita|work=The Hindu | location=Chennai, India|first=N.|last=Rahul|date=2011-12-01}}{{cite news| url=http://www.thehindu.com/todays-paper/tp-national/tp-andhrapradesh/article2722343.ece|title=Sabitha listed as witness in OMC charge sheet|work=The Hindu | location=Chennai, India|date=2011-12-17}} However the CBI defended the Home minister, who is a senior local politician of the ruling Congress party.{{cite news| url=http://www.thehindu.com/todays-paper/tp-national/tp-andhrapradesh/article2679567.ece|title=CBI defends Sabita|work=The Hindu | location=Chennai, India|first=N.|last=Rahul|date=2011-12-02}}

However, it is political rivalry, favouritism led to misuse of CBI and government authorities against any particular community. In this case, it is then congress chief minister Rosaiah because of reddy brother's good standing with former's political rivalry Jagan mohan Reddy, now the chief minister of Andhra Pradhesh. It was evidenced that Reddys had good standing with India's leading steel manufacturers, for decades, nullifying all the false claims. It should be recalled that Rosaiah rose to power under the dictatorship of then central congress leadership, who was handpicked by Sonia, after death of then chief minister Mr Raja Sekhar reddy. Roasiah's tenure short lived. Reddys had good standings with many industry leaders and politicians.{{Cite news|url=https://economictimes.indiatimes.com/industry/indl-goods/svs/metals-mining/jsw-reddys-deal-hinges-on-iron-ore/articleshow/6076534.cms|title = JSW, Reddys deal hinges on iron ore|newspaper = The Economic Times}}

{{reflist}}

• [http://andhramirror.com/FINAL_BOOK_LR.pdf Mining Mafia - A threat to democracy]. Andhra Mirror
• [http://www.tehelka.com/story_main44.asp?filename=Ne030410coverstory.asp The Hell Diggers - The scale of corruption in mining is a national calamity. No one epitomises this better than the Bellary brothers. Kidnappings, political clout, muscle power.]Tehelka
• [http://indiatogether.org/2010/jan/env-kamines.htm Lokayukta slams mining in Karnataka's forests]
• [https://www.nytimes.com/slideshow/2010/08/04/world/asia/20100805-INDIA-MINE.html?ref=asia New York Times Slideshow - India’s Mining Magnates]

Category:Illegal mining in India

Category:Companies based in Andhra Pradesh

Category:Iron ore mining companies of India

Category:Mining in Andhra Pradesh

Category:Indian companies established in 2001

Category:2001 establishments in Andhra Pradesh