Sources in IT department say that the tourism minister's mining firm not only carried out trade through its front, but also evaded Rs 87 cr in taxes

Is Reddy behind ore deals with China?

Sources in IT department say that the tourism minister's mining firm not only carried out trade through its front, but also evaded Rs 87 cr in taxes

The deeper one digs, the dirtier the illegal mining tales seem to be getting. In a latest revelation, it has been found that ILC Industries, the firm that allegedly stole the ore, which had been 'seized' by the forest department, is a front used by the Obalapuram Mining Company (OMC).

Straight to China: ILC Industries shipped a consignment of 80,160 tonne
of iron ore from Belekeri port to China. (inset) BJP MLA Anand Singh is
one of the directors of the said company. File pics

The OMC is owned by tourism minister and a mining lord from Bellary, G Janardhana Reddy. The revelation came to light when the income tax department, on Monday, exposed the OMC's front companies in Singapore through which Reddy and his wife Arunadevi were allegedly exporting the ore to China and thereby evading income tax to the tune of Rs 87 crore.

MiD DAY has a copy of the documents, including e-mail transactions, to prove that OMC is using ILC Industries -- of which Hospet MLA Anand Singh is a director--as its front to carry out its business.

The e-mail correspondence between Hong Kong-based buyers and ILC Industries establish the company's link with OMC. The source who provided the documents to MiD DAY requested us not to divulge the details of the mail, as the Lokayukta and the Criminal Investigation Department (CID) are still probing the illegal mining issue.

'No comments'
Reacting to the developments, Lokayukta Justice N Santhosh Hegde said, "I don't want to comment at this stage. All I can say is that we have obtained crucial documents, which have given us a significant headway in the probe. The investigation will be over by March 2011."

The e-mail correspondence shows that even ILC Industries has its front companies in India. Both OMC and ILC are exporting the ore through these firms. Kampli MLA Suresh Babu, who is the nephew of health minister Sriramulu, and close associate of the Reddy brothers, is a partner in one such company.

The documents show that OMC had exported ore even after the state government imposed a ban in August. An e-mail states that a buyer abroad had defaulted on the payment of the ore that was exported in August, just after the ban was announced.

While spokespersons for Janardana Reddy declined to comment, B V Srinivasa Reddy, a director of OMC, said, "OMC doesn't have any operations in Karnataka. We have nothing to do with any of these companies, including ILC Industries. We have to check the veracity of the documents you are talking about."

The history
MiD DAY had last week reported about ILC Industries lifting the ore from the Belekere port. A laytime statement of Crossbridge Project (Mauritius) Limited, a Mauritius-based shipping company, said ILC Industries had shipped a consignment of 80,160 tonne iron ore to China, when the ore had been seized by the forest department.

On March 20, the forest department had seized 5 lakh tonne of ore from 52 mining companies, including ILC Industries, claiming that the firms had violated environmental norms.

On March 28, the firms, including ILC, moved high court to intervene in the matter. ILC Industries then filed a second writ petition on April 28, seeking court directive to the forest department to clear its consignment of 80,160 tonne ore.

Ore, offshore
Interestingly, the ore reached China just a day before ILC Industries filed the second petition. The laytime document states that ILC Industries lifted the ore after March 23 and it reached Jingtang port on
April 27 on MV Prema Vidya, a vessel that owned by Crossbridge Projects (Maritius) Ltd.

However, the loading of ore was delayed and the shipping company claimed a demurrage of $3,18,502. Arbitration on the issue is going on in London.u00a0