Bangalore/New Delhi: In a damning second and final report on illegal mining in Karnataka, Lokayukta Santosh Hegde put the loss to the exchequer at Rs16,085 crore between 2006 and 2010, and recommended action “as per law" against, among others, chief minister B.S. Yeddyurappa.

The chief minister, the first in the country to be indicted by a Lokayukta, was summoned to Delhi late on Wednesday by his Bharatiya Janata Party (BJP), which said it would decide his fate after studying the report. Hegde also sought action against the BJP’s Reddy brothers—tourism and infrastructure minister Janardhan Reddy, Lok Sabha lawmaker Karunakara Reddy and member of legislative assembly (MLA) Somashekara Reddy.

Also named were about 100 companies and 787 public officials, Hegde told reporters in Bangalore on Wednesday.

He said the report recommended a ban on the mining and export of iron ore and that mining licences be given only to companies that could “value add" to the ore.

“I do not see any logic in exporting these minerals," he said. Value addition would fetch much-needed revenue, he said.

Others indicted include the chief minister’s two sons and his son-in-law, health minister B. Sriramulu, housing minister V. Somanna, former chief minister H.D. Kumaraswamy, Congress member of Parliament (MP) Anil Lad and his wife, BJP MLA Nagendra, and “certain politicians," said Hegde, who also lashed out at the government for not implementing any of the recommendations from his 2008 report.

Earlier in the day, a confident Yeddyurappa returned to the state capital from Tirupati. “The chief minister will take action on the report," he said, referring to himself and indicating he would not step down, even as his party high command met on Wednesday to discuss the crisis.

Yeddyurappa was scheduled to meet party president Nitin Gadkari late on Wednesday night and it wasn’t clear what decision the BJP would take regarding his fate as of press time.

“I’ve called a cabinet meeting tomorrow (Thursday) at 3.30pm where the report will be further deliberated," the chief minister told reporters. “I’m going to Delhi to meet some national leaders of the party including party president Nitin Gadkari," he said, before boarding a chartered flight.

The BJP core group may meet on Thursday to discuss the issue.

“He will probably have to go...but one has to also look for ways of an honourable exit," said a senior party leader who did not want to be identified.

Another senior BJP leader, who also wanted to remain anonymous, said, “It seems difficult for him to survive now...but the party is divided."

Officially, the party said any action would be taken only after studying the report.

“We are yet to read the report," said party spokesperson Ravi Shankar Prasad, after a meeting of senior party MPs to discuss the strategy in the forthcoming session of Parliament.

There is growing concern within the BJP that continuing with Yeddyurappa, whose tenure as chief minister has been mired in controversies, may weaken the?BJP’s?fight against corruption.

The Congress was quick to demand Yeddyurappa’s resignation. “Keeping the so-called high moral tradition claimed by the BJP, Yeddyurappa and all his ministers...involved in this nefarious activity (should resign)," said Congress spokesperson Shakeel Ahmed.

Hegde said it was now up to Karnataka governor H.R. Bhardwaj to take action, since he expected none by the state government. Under the Lokayukta Act, the governor is the “competent authority" to sanction prosecution of the chief minister, which the report recommends. Hegde said the report laid bare the illegal mining carried out by the powerful Reddy brothers.

“The Reddy brothers have always claimed that they do not do mining in Karnataka. We have enough documentary evidence to prove the contrary," he said.

Among other findings, he said the South West Mining Co., belonging to the Jindal group, donated Rs10 crore to a trust owned by the chief minister’s family. It also purchased from the trust 1 acre of land in Rachanahalli for Rs20 crore, while the guidance value of that land was Rs1.4 crore, he added.

“I find it difficult to accept that it borrowed money and then made a donation," he said. This had “led to the incontrovertible conclusion on my part that these donations have been made for considerations other than genuine reasons".

Action should be taken against all named and appropriate amounts recovered from them, he urged. Action could be taken under the Indian Penal Code, the forest Act, the Prevention of Corruption Act and the Mines and Minerals (Development and Regulation) Act, he said.

The Lokayukta team led by Uday Veer Singh perused 400,000 records, five million entries and produced a report, which, including the annexures, totalled 25,228 pages, he said.

Hegde said he feared physical harm to his team members and the report asks for security to be provided to them.

Since the Supreme Court was monitoring mining activities in the state, Hegde hoped that it would take cognizance of the report, as “it would be of great assistance to them," he said.

Hegde submitted his first report in December 2008, highlighting various “illegalities and irregularities," besides pointing out damage to roads due to overloading of trucks, and the “suffering of the people in and around the mining areas," he said. “The government did not receive duties or royalties due to overloading," he said.

While Bellary has traditionally been a mining belt, illegal mining has plagued the region over the last decade owing to skyrocketing iron ore prices in the international market.

At a public interest hearing on 15 July, the Supreme Court said it would likely impose a blanket ban on iron ore mining in the Bellary-Hospet region based on the evidence of large-scale irregularities and damage to the ecology. “If the impact of the mining is environmental degradation, we will stop the mining... We are looking at the macro picture. Prima facie there is excessive mining," the court’s forest bench had observed.

The case is scheduled to be heard on Friday, where the report will be put before the court either by public interest petitioners or the court-appointed central empowered committee, according to persons familiar with the matter.

Ruchira Singh in New Delhi contributed to this story.