Mining baron, brother-in-law arrested after CBI swoop

Mining baron, brother-in-law arrested after CBI swoop

More than 30kg of gold and 1.5 crore in cash was found by the Central Bureau of Investigation (CBI) in a swift, secret, early morning raids that led to the arrest and imprisonment of powerful former Karnataka Bharatiya Janata Party (BJP) minister G. Janardhan Reddy.

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After a two-year investigation started at a request from Andhra Pradesh’s Congress government, CBI also arrested Srinivas Reddy, Janardhan’s brother-in-law and managing director of the Reddys’ controversial Obulapuram Mining Co. (OMC). Officials also searched the government bungalow of Reddy aide B. Sriramulu, former BJP health minister, in Bangalore.

On Monday evening, a special court in Hyderabad sent Janardhan and Srinivas to 14 days in CBI custody. The next hearing is on 7 September. “I am innocent," said Janardhan outside the court before the hearing. “The truth shall prevail."

Janardhan faces various criminal charges related to the Andhra Pradesh branch of the two-state multi-billion-dollar mining empire he runs with two brothers, popularly called the Bellary brothers, and other members of the family.

In the morning, CBI officials drove Janardhan, an OMC director, to Hyderabad—more than 500km northeast of Bangalore—in his own Toyota Innova, an Indian flag on its hood carefully wrapped up.

CBI seized Janardhan’s private helicopter, Rukmini, some cars, froze bank accounts, and from his home in Bangalore took away a laptop, a diary and other documents. Other CBI officials questioned his wife, Aruna Lakshmi, at the Reddy home fief of Bellary, 300km north of Bangalore. The cash and gold were found in both houses. The raids continued all day.

Monday’s arrests and raids are not connected to the report of the Karnataka anti-corruption ombudsman, the Lokayukta, submitted 41 days ago, accusing Janardhan, brothers Somashekhar and Karunakara (one a former BJP minister, the other, head of a milk federation), former chief minister B.S. Yeddyurappa, and more than 700 officials and politicians of involvement in illegal mining across the district of Bellary.

The arrest was the latest blow to south India’s only BJP government, riven with feuding factions after the party forced Yeddyurappa to resign following the Lokayukta report. The three Reddy brothers, accused of running a parallel government dubbed the Republic of Bellary, were dropped from the ministry of new chief minister D.V. Sadananda Gowda.

As angry Reddy supporters took to the streets in Bellary, a former Congress stronghold, their party accused the Congress of political vendetta. But there was confusion over the stand the party should take after the arrest of Janardhan, who is close to senior BJP leader Sushma Swaraj.

“This is definitely a setback to the party, especially given the situation in the state. With this, the infighting within is also likely to increase, particularly given the close affiliation of some senior leaders with the Bellary brothers. This is just an unnecessary front that we have to battle now," said a senior party leader, who did not want to be identified.

The party stance in Karnataka was belligerent. “The CBI stands for ‘Chor Bachao Institution’ and ‘Congress Bureau of Investigation’," said former health minister and Reddy confidant Sriramulu, a day after he announced his resignation as BJP MLA (member of legislative assembly) because he was dropped from the cabinet. “My children cried today when the CBI came…Sonia Gandhi is behind this."

“CBI is working under the Congress’ orders," said BJP state president K.S. Eshwarappa. “The BJP respects law and democracy. We are confident that Reddy will be proven innocent."

A more nuanced view came from BJP member of Parliament Dhananjaya Kumar, who said Janardhan’s arrest was part of a “routine investigation" ordered by the high court. “Mining is the private affair of Reddy," said Kumar. “The BJP can only hope and pray that Reddy can prove to the court he has not violated the laws of the land."

Across the state border, another Reddy, who knows the brothers, was infuriated when journalists asked him for reactions.

“This is not ethical, it is beneath, under the belt," said an angry Jagan Mohan Reddy, Congress rebel and son of former Congress chief minister Y.S. Rajasekhara Reddy. “How is Janardhan Reddy connected to me? You ask him (Janardhan), you ask the BJP."

Ruhi Tiwari in New Delhi and Viswanath Pilla in Hyderabad contributed to this story.