Active Stocks
Thu Mar 28 2024 15:59:33
  1. Tata Steel share price
  2. 155.90 2.00%
  1. ICICI Bank share price
  2. 1,095.75 1.08%
  1. HDFC Bank share price
  2. 1,448.20 0.52%
  1. ITC share price
  2. 428.55 0.13%
  1. Power Grid Corporation Of India share price
  2. 277.05 2.21%
Business News/ Politics / News/  Lokayukta report names Adani, JSW Steel, Sesa Goa, NMDC
BackBack

Lokayukta report names Adani, JSW Steel, Sesa Goa, NMDC

Lokayukta report names Adani, JSW Steel, Sesa Goa, NMDC

Premium


Bangalore: Three of India’s leading companies, Adani Enterprises Ltd, JSW Steel Ltd and Sesa Goa Ltd, and three public sector institutions—including NMDC Ltd, India’s largest mineral producer—are among hundreds of smaller companies accused by the Karnataka Lokayukta of involvement in the state’s growing mining scandal.

The intricate, ingenious details of a variety of crimes, including bribery and fraud, are listed over 464 pages of justice Santosh Hegde’s report, a copy of which is with Mint.

Also Read | Karnataka Lokayukta report

Shares of Adani, JSW, Sesa and NMDC tumbled as news leaked of their involvement with illegal mining and exports from Karnataka’s Bellary district.

One of India’s largest trading houses, the $6.4 billion (Rs28,290 crore) Adani Enterprises has been accused of forging permits, and bribing officials from at least seven state departments and politicians to export iron ore illegally from Belekeri port in Karnataka between 2006 and 2011.

“The Adani Enterprises has paid the bribes (sic) for getting undue favour for illegal exports," said the report. The Lokayukta has recommended cancelling the company’s export lease at the port; blacklisting and barring it “from participating in any future contract, grant or lease, etc. by the government"; criminal cases against officials and recovery of bribes.

“We cannot comment on the issue now as we are still reviewing the situation and are consulting our lawyers for the future course of action. We may offer our version in a day or so," said an official spokesperson for Adani Enterprises.

The $5 billion JSW Steel, a part of the OP Jindal Group, avoided state levies between 2006 and 2010 by receiving excess iron ore in overloaded trucks, paying only royalties due on the normal weight of trucks. More than 1.2 million tonnes (mt) were so processed by the company.

Justice Hegde said the state government “should take immediate steps" to recover Rs342 crore from the suppliers and JSW Steel, which has a steel plant in Bellary district, the mining nerve centre.

“We haven’t read a copy of the report yet, so it’s too premature for us to comment on the issue," JSW spokesperson Sharmila Banerjee said.

The company is also accused of transferring, through a trail of bank transactions, Rs10 crore to an educational trust run by the family of indicted chief minister B.S. Yeddyurappa in March 2010.

There are three public sector companies named as well, the most prominent being NMDC, India’s largest iron ore producer and exporter, run by the ministry of steel. It is accused of under-invoicing “high-grade" iron-ore exports by as much as 40% in 478 suspected cases between 2006 and 2010. The loss caused: Rs2,222 crore. “The public sector undertaking has incurred a huge loss," said justice Hegde. “The concerned ministry government (sic) of India may take note of it and take further needful action."

Hegde’s report says that after the state government took a decision on 28 July 2010 to ban the issue of permits to destinations for exports, the investigators found “83 exports with a total quantity of 17,58,336 MT (metric tonnes) of iron ore". It provides a list that includes Sesa Goa.

Its name recurs in a table sourced from Shree Mallikarjun Shipping Pvt. Ltd, which indicates the companies and persons involved in illegal exports, the supplier of iron ore to these companies and the stacks at Belekeri port.

Sesa Goa declined to comment. NMDC chairman Rana Som did not take calls seeking comment.

The National Agricultural Cooperative Marketing Federation of India Ltd—its majority shareholding is with the Union government—one of India’s largest cooperatives meant to help farmers, is accused of illegal exports of iron ore to China between 2005 and 2006. “All the trade transactions and transport of iron ore to various ports is dubious and require further investigation," justice Hegde said in the report.

Mysore Minerals Ltd (MML), a Karnataka government company with 40 mining leases—one is a joint venture with JSW—is accused of misusing permits by classifying iron ore as waste between 2008 and 2010 to 90 companies and individuals. “It is clear that the officials of MML have knowingly committed irregularities and illegalities," the report said, recommending that they be “identified and dealt (sic) in accordance with law after conducting proper investigation".

In a meticulous listing of officials and their bribery rates at Belekeri Port, justice Hegde noted that bribe amounts—“unaccounted and paid in cash"—had “progressively increased" from Rs22 lakh in 2004-05 to Rs48 lakh in 2005-06 to Rs66 lakh in 2006-07 and Rs1.28 crore in 2007-08.

On Friday, shares of Adani Enterprises fell 20.97% to Rs586.10, JSW declined 5.49% to Rs774.20, NMDC fell 2.6% to Rs240.15 and Sesa Goa dropped 5.06% to Rs275.

Sridhar K. Chari in Bangalore, John Satish Kumar in Mumbai, Maulik Pathak in Ahmedabad and Sumant Banerji in New Delhi contributed to this story.

feedback@livemint.com

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

Catch all the Politics News and Updates on Live Mint. Download The Mint News App to get Daily Market Updates & Live Business News.
More Less
Published: 30 Jul 2011, 01:07 AM IST
Next Story footLogo
Recommended For You
Switch to the Mint app for fast and personalized news - Get App