AP: Reddy brothers&Jagan's illegal mining dealings exposed?

Reddy Brothers
Hyderabad, Sept 6: The mining barons - Reddy brothers have already been arrested and sent to jail in Hyderabad following the early morning CBI raids. Following the incident, suddenly all eyes have fallen on the richest MP in the country - Jagan Mohan Reddy. The investigative agency CBI claimed to have unearthed the illegal dealings between the Reddy brothers and Jagan and Co.

Sources also claimed that the CBI, which already raided Jagan's premises over allegedly having disproportionate assets, may soon arrest him who has reportedly used the karnataka-Andhra Pradesh border, the kingdom of their "illegal dealings."

As per the media reports, Jagan and the Reddy brothers have made multi-crores through their illegal trades. Here are some highlights how they worked:

The CEO of Red Gold Enterprises Sajjala Rama Subba Reddy is also the CEO of Sajjala Iron and Steels Pvt Ltd, Bellary. The owner of this steel company is one Sajjala Diwakar Reddy who is none other than the brother of Sajjala Ramakrishna Reddy, the director of Sakshi group of newspapers owned by Jaganmohan Reddy.

As per an understanding, the Red Gold Enterprises was given 50 per cent of iron ore mined by Janardhana Reddy's OMC at only 5 per cent appreciation over costs.

The proceeds of the same were invested in another venture, the R R Global enterprises. Red Gold and RR Global belonged to the same owners who are brothers – Sajjala Ramakrishna Reddy and Sajjala Diwakar Reddy, who were directors in Jagati Publications owned by Y S Jagan.

Red Gold passed on Rs 90 crore earned from iron ore sale to RR Global enterprises which in turn invested Rs 44 crore into Jagati publications and Rs 30 crore into Indira television by buying its shares. It was a quid pro quo for illegal mining that the Andhra government had permitted the Gali brothers to indulge and transfer large tracts of land to them for setting up a steel company.

Jagan had intervened several times allegedly with his goons whenever Gali brothers had trouble from rivals at Anantpur mines.

Janardhana Reddy was granted lease of 10,760 acres in Kadapa district by YSR for setting up the Brahmani Steel Company at a throw away price of Rs 18,500 per acre, which came to Rs 20 crore for the entire land. Reddy later raised Rs 350 crore from financial institutions by mortgaging the land.

The CBI investigation has also revealed that GJR International Holdings Ltd and GJR Holdings (Mauritius) (both belonging to G Janardhana Reddy) had bought 4.89 crore shares each of the Brahmani Steel for Rs 49 crore. One of the companies had also leased 438 hectares of iron ore land in Sumatra of Indonesia for supplies to Brahmani at Rs150 crore.

Later, Gali brothers and Jagan reportedly sold away their stakes in Brahmani steels to the Jindals. It is a common knowledge that OMC managing director Srinivas Reddy was a distant relative of YSR. Similarly, Ramachandra Reddy, the joint managing director of Brahmini Industries was a Congress MLA from Rayadurg in Anantaupur and was a close follower of YSR.

A preliminary probe in November 2010 had revealed that the Gali brothers had illegally exported 1.97 crore tones of iron ore worth Rs 5,308 crore which was mined from encroached forest and non-leased areas in Andhra Pradesh with clandestine support of the YSR government. Although the leases of OMC-1, OMC-2, OMC-3, and Anantapuram Mining Co. owned by the Gali brothers had expired in 2004, the YSR government had extended them till 2017. In OMC-1 though the lease area was just 25.98 hectares, the OMC had mined up even the no man"s land and also other forest areas and thereby encroaching on the boundary areas between Karnataka and AP.

The OMC in all had lease for only 132.98 hectares in Anantapur but Reddys had illegally extended the mining to nearly 326.5 hectares, including 150 hectares of forest land and 25 acres of no man"s land on the borders and also that of other mining operators adjacent to theirs.

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