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Lokayukta indicts Karnataka Chief Minister Yeddyurappa
Reddy brothers Justice Hegde moots action under PCA

Source: The Sangai Express / Press Trust of India

Bangalore, July 27 2011: The Lokayukta report on illegal mining on Wednesday strongly indicted Karnataka Chief Minister BS Yeddyruappa, Reddy brothers and various others and recommended their prosecution under Prevention of Corruption Act and other laws.

In damning evidence against the Chief Minister, the Lokayukta headed by former Supreme Court judge Justice Santosh Hegde found that a mining company had donated Rs.10 crore to a trust managed by his family members which also sold a piece of land to a mining company for Rs.20 crore far above the guidance value of Rs.1.4 crore.

After submitting the report running into 25,228 pages including annexures, Mr.Hegde told a press conference that he has named Chief Minister Yeddyruppa, former Chief Minister and JD(S) leader H.D.Kumaraswamy, Reddy brothers (who are ministers and mining magnates), their camp follower and another minister H.Sriramulu, Congress MP Anil Lad's wife and over 600 officials in the mining racket that cost the exchequer Rs.16,085 crore between 2006 and 2010 .

"Having come to the conclusion that there is as a matter of fact an offence made under the Prevention of Corruption Act I have made a recommendation to the Governor to take further action," Mr.Hegde said in respect of the donation made to the trust run by the Chief Minister's family members.

At another point, he said, "I have made a recommendation for prosecuting everybody.

I have stated this to the Governor.

It is for him to act ".

To a question, he shot back, "Action under Prevention of Corruption Act should be taken.

What else?" The report castigated the BJP government, which is in power since May 2008, for its failure to check irregularities and illegalities in mining in the state.

"The enquiry has found large scale involvement of officials, powerful people both in the Administration as well as in the ground level," said Mr.Hegde whose main report runs into 943 pages.

Mr.Hegde said in the course of investigations they found that a company dealing in iron ore donated Rs.10 crore to the Trust run by family members of the Chief Minister.

From the Trust, a mining company purchased an acre of land for Rs 20 crore far above the guidance value of Rs 1.40 crore, he said.

"This payment has been made to the Trust which has nothing to do with the donating company which has not been doing well but borrowed money from another company and donated this.

I find this extremly difficult to understand this abnormal high price.

"We have come to an incontrovertible conclusion that this donation and sale consideration has been made for reasons other than genuine reasons." he added.

Replying to questions, Mr.Hegde confirmed that the report makes a mention of the CM, his family members, Reddy brothers, Sriramulu and Kumaraswamy and over 600 officials.

In the case of Mr.Kumaraswamy, the enquiry found "misconduct" on his part regarding grant of two mining leases and action has been recommended under PCA.

Referring to the purchase of one acre of land in Rachenahalli on Bangalore outskirts for a consideration of Rs.20 crore when its guidance value would not be more than Rs 1.4 crore, he described this as "abnormal payment to a trust which has nothing to do with a donating company which was not financially strong" .

Mr.Hegde said he found it extremely difficult to accept that a company which did not have financial resources should borrow from other companies to make donation.

"Therefore, having come to the conclusion that there is an offence under the Prevention of Corruption Act is made, I have made recommendation to the Government to take further steps (against Chief Minister BS Yeddyurappa) in this regard because the competent authority for taking action against the Chief Minister is governor of the State ".

He said the Lokayukta has submitted the report to the Government and a copy of the report with annexure have been sent to the Governor for "further action" (in regard to the Chief Minister) .

On Reddy brothers, Mr.Hegde said contrary to their claim that they were not doing any mining in Karnataka, "we have enough documents to prove to the contrary." He said the illegalities found were of different types as has been enumerated in different chapters and supported by documents.

"The offences committed by various people and companies will be covered under various acts and action will be taken in accordance with law under IPC, Forest Act, FMRDA and PCA," he added.

Mr.Hegde said the Lokayukta has recommended that since various illegalities and irregularities were committed the government should cancel the mining licenses, compute the quantity of loss and treat it as "stolen iron ore" and recover money from people concerned at the market rate.

The Lokayukta enquiry found that there was rampant illegal mining in Bellary, Chitradurga and Tumkur because of which local people suffered from various problems.

"Once illegal mining is stopped the Central and the State government can recover lakhs of crores of rupees as Excise and VAT," he said, adding over 100 companies were involved in illegal mining.

Mr.Hegde has also recommended to the government that security be provided to his team of officers since they could face possible threats from some quarters.

The enquiry team had a huge task in examining four lakh records and collating nearly 50 lakh entries in the effort to produce the report.


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