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Business News/ Politics / Policy/  The saga of Sagayam and Durai

The saga of Sagayam and Durai

Former Madurai collector’s efforts to crack down on illegal granite mining put the spotlight on a 26-year-old entrepreneur from one of TN’s most powerful political families

Former Madurai collector and current managing director of the Tamil Nadu Handloom Cooperative U. Sagayam. (Former Madurai collector and current managing director of the Tamil Nadu Handloom Cooperative U. Sagayam.)Premium
Former Madurai collector and current managing director of the Tamil Nadu Handloom Cooperative U. Sagayam.
(Former Madurai collector and current managing director of the Tamil Nadu Handloom Cooperative U. Sagayam.)

On the first day of May, acting on an anonymous petition, the district collector of Madurai in Tamil Nadu went on a day-long inspection of the hills around the villages of Melur, Kilayur and Keezhavalavu—a region of paddy and sugar cane fields that concealed a wealth of granite under its soil.

What the collector, Ubargarampillai Sagayam, found there dismayed him: “Huge devastation of 100-ft deep trenches of hills, but also destruction of cultivable land and water bodies."

Sagayam toured quarries, visited mines and interviewed workers to establish that illegal quarrying was going on amid legitimate mining, and that some companies were stealing granite from neighbouring sites or taking more than they had been allowed to mine.

He soon summed up his findings in a 13-page report to the Tamil Nadu government. The state, he concluded, had lost at least 16,000 crore to illegal quarrying in Madurai over the last two decades.

That’s a fraction of the notional losses estimated by the Comptroller and Auditor General to have been lost in the allocation of coal mines or 2G spectrum allocations (respectively 1.86 trillion and 1.7 trillion), but a hefty sum all the same.

Four days later, having been called to Chennai by his superior to explain himself, the collector, the 49-year old Sagayam got the phone call he’d been expecting. He was informed that he would be transferred from the district collector’s job he’d held for just 14 months to a new post: as managing director of the Tamil Nadu Handloom Cooperative.

It wasn’t the first time Sagayam’s perseverance had nettled his employers; this would be his 19th transfer in 21 years.

Since that day, about 300 people have felt the ripples of Sagayam’s report. The Tamil Nadu police say a total of 28 cases of illegal granite quarrying have been registered against 15 firms, and about 30 of the accused are big-business mining barons.

Among them is a 26-year-old entrepreneur with some impressive political connections. Dayanidhi Alagiri, also known as Durai, is the son of cabinet minister M.K. Alagiri and grandson of M. Karunanidhi, the head of the Dravida Munnetra Kazagham (DMK) and five-time chief minister of Tamil Nadu.

Durai was a co-founder and director of Olympus Granite Pvt. Ltd, a firm that police claim has caused a loss of 44 crore to the government through its violations. The police say that this is only an initial estimate and the actual loss could be much more.

Olympus is by no means the primary accused in the probe into Madurai’s granite industry. PRP Exports (the largest exporter of granite in India, against which 10 cases have been registered and whose owner, P.R.P. Palanisamy, is in jail) is alleged by the police to have accounted for around 13,000 crore of the loss to the state.

But, as a member of an illustrious political family, Durai has attracted much of the media spotlight, especially once he disappeared in August after a first information report (FIR) was registered against him by the local village administrative officer at the Keezhavalavu police station.

Durai’s upbringing could not have been more different from that of the man who would implicate him in the so-called granite scam. Precocious, and spurred on by his family, the youngest child of Alagiri and his wife Kanthi had launched careers in two industries by the time he was 22: his granite business and a film production firm called Cloud Nine Movies. Durai was also the darling of Madurai, the bastion of his father’s political organization. Locals say that each 27 September—his birthday—DMK party workers would distribute sweets about town and organize gala events. This year, however, there was no merriment. Madurai wore a dull veil.

Sagayam came from less exalted stock. His father was a farmer and his mother a housewife. The youngest of five brothers, he studied at a Tamil-medium panchayat school in his village 125km north of Madurai, Perunchunai in Pudukottai district.

The family home overlooked a 50-acre mango grove, where Sagayam remembers getting his first lesson in ethics. Playing with his friends one day under the trees, he’d found a windfall of ripe fruit, which the children collected and took home to their mothers. Sagayam’s mother was furious, he remembers, and made him throw the fruit even when he protested that nobody had seen him and that everyone else had done the same thing.

“Just because all the others are doing a wrong thing it does not become right," she told him—a lesson that the adult Sagayam repeats like a mantra.

The anonymous petition that inspired Sagayam’s investigation seems to have been the result of a series of right to information (RTI) requests by a local businessman from Madurai called S. Murugesan in 2008.

Murugesan said he filed RTIs asking how much granite PRP Exports was allowed to ship abroad and how much tax the company had paid between 2004 and 2008.

He claims he had obtained information from the mines department showing that the company had exported about 120,000 cu. m more than it had been permitted. But he suspected that the wrongdoing went deeper.

“As a local, everyone is aware of the illegalities these granite quarries have been doing, and the bribes being taken by government officials," he said. “That is why I filed an RTI."

Back in 2008, Sagayam’s predecessor as Madurai collector, N. Mathivanan, working under a DMK government headed by Karunanidhi, conducted an investigation and filed a counter affidavit dismissing Murugesan’s petition, saying it lacked merit. Undeterred, Murugesan filed a writ in the Madurai bench of the Madras high court a year later, calling the dismissal of his petition illegal on the grounds that it hadn’t been investigated properly.

Mathivanan could not be reached by Mint for comment.

Shortly before the state held its elections in the spring of 2011, the high court judge K. Chandru ordered a new investigation and PRP Exports duly obtained a stay. On 13 April 2011, Tamil Nadu went to the polls and, a month later, the government changed: J. Jayalalithaa’s All India Anna Dravida Munnetra Kazhagam (AIADMK) came back to power.

The DMK’s ousting was in part due to the shadow of the 2G spectrum case, in which Karunanidhi’s family had been implicated. Karunanidhi’s daughter Kanimozhi had a 20% stake in television company Kalaignar that was allegedly part of a money chain linking a telecom company with former telecom minister A. Raja.

Jayalalithaa, entering her third term as chief minister (the two parties have controlled the state exclusively since 1967), had campaigned in Madurai against what she called Alagiri’s “rowdy raj" of corruption.

In Murugesan’s eyes, at least, the new government was responsible for the renewed interest in potential violations in Madurai’s granite industry. “The nexus between the government and the granite businessmen is plain for all to see," he said. “The fact that no action was taken... shows the DMK government’s reluctance to investigate the case. The change of government is what led to the scam coming out in the open."

In the 1990s, miners began exploring for coloured granite in the districts of Madurai, Dharmapuri, Krishnagiri and Karur, according to an official from the department of geology and mining who did not want to be named. Until that time only black granite was being extracted.

“While this saw many private players taking part, only few were successful," he said. “It was only after 2000 when the real mushrooming of growth for private players began."

Jayalalithaa became the first elected female chief minister of Tamil Nadu in 1991 (when she began the first of her three terms in the job). At the same time, a 30-year-old Sagayam was embarking on a career in the Indian Administrative Service (IAS). He’d cleared the civil service exam but had not been selected as an IAS officer, so pursued his Tamil Nadu Public Service Commission exams, was selected as an IAS officer and became subdivisional magistrate of Ootacamund (popularly called Ooty) in 1991.

And he was already beginning to ruffle feathers with his refusal to accept the status quo. After a difference of opinion with the Ooty collector, who, he says, favoured the large tea estates while he sided with the tribal community, Sagayam was relieved of his post in what was to be the first of many transfers in his career.

By 2000, as an additional district magistrate in Kanchipuram, he’d sealed Pepsi’s bottling plant near Chennai, after detecting dirt floating in several bottles of their soft drinks, refusing to budge under external pressure, and fought with the sand mafia.

Although his rectitude is much admired—“Sagayam is an iconic IAS cadre who takes pride in being honest. He is an enthusiastic officer in whatever he does," said 40-year-old T. Udhayachandran, a fellow IAS officer who has known Sagayam for 15 years—Sagayam’s tendency to stick his neck out kept him moving from post to post.

In 2004, Sagayam was in trouble again. This time, in his post as deputy commissioner of civil supplies in Chennai, he confiscated 5,000 subsidized domestic gas cylinders in three days that were being illegally used by restaurants, resulting, he said, in a loss to the exchequer.

That year, Durai turned 18 and joined the ranks of Chennai’s College of Engineering. Two years into the course, he and a childhood friend, S. Nagaraj, invested 5 lakh each into a new business, Olympus Granite. Nagaraj bought two-and-a-half acres of land in Keezhavalavu and obtained a licence to quarry for granite in 2008. The land was adjacent to a three-acre quarry owned by Tamil Nadu Minerals Ltd (TAMIN)—a fact that the deputy superintendent of police and chief investigating officer in the granite case, A. Thangavelu, finds significant.

“It’s not a coincidence that Olympus’ quarry was next to a TAMIN quarry," he said. While Olympus was licensed to dig only 400 cu. m of granite over a period period two years from its quarry, the company obtained a permit to transport 2,200 cu. m of granite.

“In the granite business, you have to be lucky," said Arumugam Nainar, additional director in the mines department, Madurai. “You can never fully assess the quality of the rock beneath, but the TAMIN quarries usually have the best."

The FIR says that Olympus encroached upon the government mine next to its own quarry and stole its rock. A visit to the Olympus quarry showed that, while the Olympus quarry had been barely dug out, the TAMIN quarry was a study in contrast.

An official from the department of geology and mining, who did not want to be named, said that this particular TAMIN quarry, called Pokishamalai (meaning treasure mountain), had been leased for granite extraction. But, the official claimed, TAMIN officials illegally subcontracted the work to the benami owners of Olympus, R. Kanagavelpandian and S. Sundarapandia, who extracted 60,000 cu. m of granite worth 240 crore from the TAMIN quarry over a period two years from 2007, on behalf of Olympus.

Three TAMIN officials connected to the case were arrested by the district police for conniving with the private quarry operator and misquoting the amount of granite quarried.

“We have strong prima facie evidence to show that Olympus had committed violations by digging more granite than was allowed," said state advocate general A. Navaneetha Krishnan. “We have a strong case against him."

Durai’s lawyers, however, deny that Olympus has committed any violation. “Just because the TAMIN quarry is adjacent, you cannot allege Olympus dug it out," said P. Kumaresan, Durai’s lawyer. “It could have been leased to some other party."

They also deny the involvement of their client, Durai, who they say had quit as director of the company by 2010. “He was more an investment partner," Kumaresan, “he was not involved in the company’s functioning."

Durai did have other concerns. He expanded into the media business in 2008, after graduating from college, starting the production house Cloud Nine Movies in partnership with his brother-in-law, Vivek Rathinavel. Together, the two made three films and distributed 10, including box office hits Mankatha, Vaaranam Aayiram and Tamizh Padam. Mint could not reach Rathinavel for comment.

The move was not surprising, given the clout the DMK family has in the media and entertainment world (Karunandhi’s grand-nephew Kalanithi Maran owns the Sun Media group). The third generation of the family—Dayanidhi and his cousins—are all involved in the Tamil Cinema industry. His cousins Arivunidhi, Arulnithi Tamilarasu and Udayanidhi Stalin are actors and producers.

The reasons for Durai’s career change are not clear. He claims he quit Olympus in 2010, but his letter of resignation was not submitted to the Registrar of Companies (RoC) until 2011. Police believe that he did not in fact resign until the regime in the state changed.

A local official with direct knowledge of the matter, who did not want to be identified, said Durai was tempted to enter the granite business because his cousin Udayanidhi Stalin’s quarrying company in Vellore had been so profitable. But the Olympus quarry didn’t have equal success. “Having realized that, he must have diverted his attention to production," said the person.

Still, he wasn’t doing badly. Documents obtained by Mint from RoC show that in 2011, the company’s profit before tax was 2.45 lakh and it had assets worth 42.9 lakh.

A report in the magazine Tehelka, in August 2011, reported that Durai had 9.22 crore of agricultural land, houses worth 38.5 crore, 40 crore worth of non-agricultural land, and deposits worth 2.18 crore, coming to a total of 89.9 crore.

He is a trustee of Dhaya College of Engineering and Dhaya Dental College, and was managing director of JAK Communications until 2011. The company has since been renamed JAK Network and is under new ownership. He is also a director of Royal Cable Vision and Mahesh Elastomers, according to the same report.

Sagayam is less pecunious. In 2009, he became the first IAS officer in Tamil Nadu to make public disclosure of his assets—bank balance of 7,172 and a house worth 9 lakh in Madurai. By then he had acquired a reputation for his dedication to transparency.

On taking up a new post, Sagayam says, the first thing he does is to hang a sign reading, Lanjam Thavirtthu, Nenjam Namartthu (Reject bribes, hold your head high), outside his office door, and, outside his new office at the handloom cooperative there does indeed hang a notice stating that bribery is an offence, offering a complaint hotline.

“I have seen 17 IAS officers in my career and most of them are honest," said G. Krishnamurthy, Sagayam’s secretary, “but Sagayam is different in the sense that he expects the system to be clean and will not hesitate to punish his subordinates, while the other officers may be honest but will overlook if corruption is around the place, thinking ‘if I report then I would have to take wrath of these people’."

It came as little surprise then, when in March 2011, the election commission hand-picked Sagayam to oversee the election in Madurai. The unstable political tussle in the district, where Durai’s father Alagiri was campaigning, was threatening to cause problems during the polling. In April, two cases were filed against Sagayam by the DMK as a result of his work leading up to the elections. In one, he was accused of having influenced college students’ votes by pushing for a change of government. A second case alleged he had asked an employee to file a case against Alagiri, following a violent incident in which, Sagayam says, his officer and a videographer filmed Alagiri handing out cash to voters. Both cases were dismissed by the court; Sagayam says his effigy was burnt by DMK partymen, angered at the embarrassment to their campaign.

He was later awarded an appreciation certificate from the chief election commissioner, S Y. Quraishi for conducting “free and fair elections".

For Vimala, Sagayam’s wife, all this career-jumping must have made for an unrestful marriage. Vimala, however, displays a soft-spoken pragmatism when she recounts the details of the various shifts.

In 1999, when her husband was suddenly transferred from the collector’s post at Namakkal, she and the children had to vacate the collector’s residence within a day, and move to Chennai.

“My son and daughter were going to school, so we didn’t have the option to move from Namakkal. I decided to rent a house and move the things," she said. After Sagayam was transferred away from Madurai in May, a group of villagers—transgenders and disabled people from Arittaipatti in Melur—staged protests in front of the collector’s office, asking the government to revoke the transfer. Sagayam had arranged for houses for over 40 transgenders and had enabled them to go to college in Madurai. Sagayam himself views the constant upheaval with complete equanimity. “It is government’s authority to transfer according to my capacity," he says, apparently unperturbed.

Since their son’s disappearance, Durai Dayanidhi’s family has been repeatedly questioned by the police, and has denied any knowledge of his whereabouts. Dayanidhi’s wife, Anusha, who he married in 2010, is suspected by police of having met Dayanidhi in September for his birthday. However, she maintains she has not spoken to him in two months when she was investigated in October, said superintendent of police for Madurai district, V. Balakrishnan.

The police have also issued a non-bailable warrant against him, on which a stay had been obtained till 27 November. The police’s intentions are to charge-sheet him as a proclaimed offender and seize Dayanidhi’s property. Speaking to reporters in Chennai, after the warrant was issued for Dayanidhi, the DMK chief Karunanidhi said his grandson would act on his lawyer’s advice. He also said he did not know why Dayanidhi had gone into hiding.

“It is a politically motivated case. Why should Dayanidhi surrender? The government wants to hide its failures so it is redirecting the glare to some other issue," said a DMK member of Parliament, K.P. Ramalingam, who continues to support Dayanidhi. “DMK is not going to be shaken by all this. This has got focus because it is DMK and it is the first family."

If convicted, Dayanidhi faces a prison term of up to three years, and a loss of 240 crore will recovered from Olympus, in addition to a fine of 12 crore.

Sagayam, on the other hand, is ready to turn his investigative zeal to finding out possible infractions of the law in the handloom industry. However innocuous the posting or project, there is a lot to be done to better it, he says.

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Published: 07 Dec 2012, 01:03 AM IST
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