CBI Court Sentences K'taka MLA G Janardhana Reddy to Seven Years In Prison For Illegal Mining

Hyderabad: A former BJP minister of Karnataka, Gali Janardhana Reddy was among four persons sentenced to seven years’ imprisonment by a Central Bureau of Investigation (CBI) court here in connection with a 14-year-old case pertaining to the illegal mining of iron ore by a company owned by Reddy and his brothers.

Another former minister of erstwhile Andhra Pradesh, P. Sabita Indra Reddy, who is now an MLA of the Bharat Rashtra Samithi in Telangana, and retired IAS officer B. Kripanandam were found not guilty in the same case.

The latter was industries secretary when the charges against the company surfaced. Both of them were accused in the case.

The court had discharged from the case another IAS officer, Y. Srilaxmi, in 2022 on grounds that there was no evidence for the charges framed against her.

An assistant mines director, R. Linga Reddy, who had allegedly played a key role in the allotment of mining leases to the Obulapuram Mining Company (OMC), promoted by Janardhana Reddy and embroiled in the case, passed away during the course of trial.

Others convicted were OMC managing director B.V. Srinivas Reddy, the former's personal secretary Mehfuz Ali Khan, former mines director of Andhra Pradesh V.D. Rajagopal, and the OMC itself as an entity.

Janardhan Reddy, Srinivas Reddy, Rajagopal and Khan were straightaway shifted to the Chanchalguda central jail in Hyderabad from the court after the verdict was delivered. Doctors were summoned to medically examine on them on the court premises.

On the other hand, a joyous Sabita Indra Reddy told mediapersons that the judgment was an anti-climax to a series of adverse situations that began 14 years ago when she first climbed the stairs to the court hall with tears in her eyes. She said she was innocent and that Tuesday's judgment was proof.

Fifty-eight-year-old Janardhana Reddy, who was the son of a police constable, underwent a meteoric rise to become a mining baron through the OMC, where his cousin and a former Karnataka minister B. Sriramulu has stakes.

The operations of the OMC spread across Karnataka’s Ballari district and Andhra Pradesh’s Anantapur district.

They flourished during the Congress regime in Andhra Pradesh under the chief ministership of Y.S. Rajasekhara Reddy from 2004 to 2009.

The Congress government had allotted 10,760 acres of government land in the Obulapuram revenue village of Anantapur district for setting up a Rs 20,000 crore steel plant.

Although there was no provision for the captive mining of iron ore in the area in the permission granted to the plant, then-industries secretary Srilaxmi recommended a mining lease to the OMC overlooking 23 other applications. She issued a government order on the same day, bypassing the rules.

Sabita Indra Reddy was mines and geology minister and Rajagopal mines director then.

The OMC was granted a mining lease for 64 acres in two mandals of Anantapur district by the Andhra Pradesh government and another 44 acres in the Ballari reserve forest by the Karnataka government.

However, the company carried out exploration of iron ore beyond the leased areas. As a result, the Andhra Pradesh government suffered a loss of Rs 884 crore due to the OMC’s non-payment of royalties in the additional areas.

Janardhana Reddy was then tourism and infrastructure development minister in the B.S Yediyurappa-led BJP government in Karnataka.

The former Lokayukta of Karnataka, Santosh Hegde, had found violations in the execution of the lease awarded to the OMC. Income Tax raids on the offices and residences of Janardhana Reddy and his relatives disclosed the under-invoicing of sales by the OMC.

Following the death of Andhra Pradesh chief minister Rajasekhara Reddy in a helicopter crash in September 2009, his successor K. Rosaiah cancelled the mining lease to the OMC and requested the Union government to order a CBI inquiry.

Investigation by the CBI led to Janardhana Reddy’s arrest from Ballari and his being moved to Hyderabad in December 2009. He was lodged in the Chanchalguda central jail in Hyderabad for several months.

The CBI filed a chargesheet in court arraying B.V. Srinivas Reddy as the main accused and Janardhana Reddy as accused no. 2 Srilaxmi, Rajagopal and Khan were also sent to jail.

Srilaxmi's quash petition was initially rejected by a CBI court and then by the Andhra Pradesh high court twice. The high court finally discharged her from the case in 2022, but she had already spent a year in jail and faced suspension from service by then.

Apart from illegal mining, the charges against Janardhana Reddy involved a memorandum of understanding entered into by the OMC with a Singapore-based shell company, GLA Trading International (GLATI), which allegedly underreported sales and evaded taxes in India. GLATI was also accused of having branches in tax haven countries and territories like the United Arab Emirates and the British Virgin Islands.

The CBI filed its first chargesheet in court under Section 120 (B) (criminal conspiracy) and other sections of the Indian Penal Code as well as provisions of the Prevention of Corruption Act in 2011. Thereafter, three more chargesheets were also filed.

Four more chargesheets of the CBI against Janardhana Reddy in different cases pertaining to benami transactions ended with his acquittal.

The Supreme Court intervened in the case and constituted a central committee to monitor the case. The apex court also barred his entry into Ballari, a stronghold of the Reddy brothers, upon his release on bail to prevent him from influencing witnesses.

The court had set May 2025 as the deadline for the CBI court as quash petitions and other adjournments delayed the case’s progress.

A quash petition by Sabita Indra Reddy was also rejected by the court, though she has been acquitted now. She was the only one out of nine accused in the case who was not arrested and sent to jail in the initial stages of the investigation by the CBI.

After nearly three-and-a-half years of incarceration in various cases, Janardhana Reddy was released on bail.

He distanced himself from the BJP prior to the May 2023 elections to the Karnataka assembly and floated his own party, the Kalyana Rajya Pragati Paksha (KRPP). He won on the KRPP’s symbol from Gangavathi constituency, adjoining Ballari. But he merged the party with the BJP after the parliament elections last year.

Presently an MLA, Janardhana Reddy enjoys huge political clout in Karnataka and was seen as instrumental in the BJP’s coming to power in the state for the first time in 2008.

He was the backbone of the BJP's campaign in the fiercely contested parliament election between Congress leader Sonia Gandhi and BJP stalwart Sushma Swaraj in 1999.