"A close look at the Bellary mining scam that had occurred under the then Chief Minister B S Yeddyurappa"
Since November, the Bharatiya Janata Party (BJP) has been busy campaigning for the state assembly election in Karnataka. BJP has been pretty aggressive in its campaign so far, with all its biggies — right from Amit Shah, the national president of the BJP, who is now living there, to Prime Minister Narendra Modi, and Uttar Pradesh Chief Minister Yogi Adityanath — flying to Karnataka and taking part in its election campaing. The leaders of the Rashtriya Swayamsevak Sangh (RSS) have also been visiting the state and addressing the gatherings at the election rallies. These speeches, amount to hate speeches, discredit the Siddaramaiah's government, accusing it of corruption and lawlessness . As part of one such election rally on 27 March 2018, Amit Shah and Prahlad Joshi, a Member of Parliament (MP) from Dharwad, visited Lingayat and dalit mutts in Davangere.
It was here that BJP showed their propensity for self-reflection! According to a report in Times Of India, Amit Shah announced, "Recently, a retired Supreme Court judge said if ever there was a competition for the most corrupt government, then the Yeddyurappa government will get number one.—" Immediately alerted by Yeddyurappa and Joshi, both of whom were present on the stage, Shah corrected himself.Joshi continued BJP’s new-found self-reflexivity by mistranslating Shah as saying, “PM Modi did not do anything for the SC/STs.”
Such Freudian slips not only become occasions for satire and humour, but also to look into the history of BJP’s Chief Ministerial candidate, B S Yeddyurappa . The Karnataka Lokayukta report on the Bellary mining scam — the biggest scam that the state has seen so far — highlighted Yeddyurappa’s involvement in the scam. In fact, it led to his resignation from the office in 2011. Shah, unintentionally, blurted out the truth. With the Karnataka State Assembly elections scheduled for 12 May 2018, it is important to look into the link between the party’s Chief Ministerial candidate and one of India’s biggest scams.
Yeddyurappa’s Sudden Rise and Dramatic Fall
Yeddyurappa will most likely be contesting from North Karnataka this election. He served as the CM of Karnataka from 30 May 2008 to 31 July 2011. However, he is most well-remembered for the political upheaval that eventually led to the 2008 State Assembly elections. The stage was set by the former government, a coalition between the Congress and Janata Dal (Secular), in 2004, with N Dharam Singh of the Congress as the CM. This coalition government collapsed in 2006, paving the way for a coalition between JD(S) and the BJP with H D Kumaraswamy, of JD(S) as the CM. The parties had decided that Kumaraswamy would be the CM for first 20 months, followed by Yeddyurappa of BJP. However, things did not go as planned. Kumaraswamy refused to step down, leading to a political unrest in the state. These developments resulted in Karnataka being out under the president’s rule from 10 October 2007 till 7 November 2007. Ultimatly, JD(S) and BJP managed to come to an understanding and Yeddyurappa was sworn in as the CM on 12 November 2007. But soon thereafter, there were disagreements between the parties regarding the sharing of ministries, which was one of the key reasons for Yeddyurappa resigning from the office on 19 November 2007.
Following this, Yeddyurappa contested from the Shikaripura constituency in the 2008 State Assembly elections and won with a margin of 45,927 votes. He swore in as Karnataka’s 25th CM on 30 May 2008, making him the first BJP CM in the South of India. However, his term was short lived. He had to resign from the office yet again on 31 July 2011 following multiple allegations of corruption. Along with allegations of his involvement in illegal denotification of land in Karnataka, he was also named in the infamous Bellary mining scam.
The Chapter 22 of the Lokayukta report on the Bellary mining scam submitted by Justice Santosh Hegde in 2011 mentions Yeddyurappa’s involvement in the illegal transactions between South West Mining Company and Prerana Trust . The chapter discussed certain payments made by the South West Mining Company to Prerana Trust, two of whose trustees were Yeddyurappa’s sons. The following quote from the chapter makes it clear how massive this illegal transaction was:
Dr. U.V. Singh has in his report traced the possible relationship between Jindal Group of Companies with M/s South West Mining Company Limited. It is found from his report that the Jindal Group has set up its first steel plant in 1982 at Vasind near Mumbai. Soon after, it acquired Piramal Steel Ltd., which operated a mini steel mill at Tarapur in Maharashtra. The Jindals, who had experience in the steel industry, renamed it as Jindal Iron and Steel Co. Ltd. (JISCO). In 1994, the Jindal Vijayanagar Steel Limited (JVSL) with its plant located at Toranagallu in the Bellary-Hospet area of Karnataka has been set up in the heart of the high-grade iron ore belt and spread over 3,700 acres of land. In 2005, JISCO and JVSL merged to form JSW Steel Ltd (JSW). The Jindal Group is one of the largest Groups in the State having a steel plant at Toranagallu. The main supply of iron ore to this Steel plant is from mines in Bellary district. The JSW is also having mines managed jointly with Mysore Minerals Ltd (MML) through Vijayanagar Minerals Pvt. Ltd (VMPL). The mine is known as Timmappanagudi Iron Ore Mine (TIOM). The VMPL is a joint venture Company of JSW and MML. The iron ore is supplied through an agreement and conditions therein. There is 22 Report Page 363 of 464 another Company by name M/s. South West Mining Ltd (SWML) having office at Main Road Old JVSL, Administrative Building, Vidyanagar, Toranagallu. In their letter pad the address is shown as JSW Mining Office, Near Talur Cross, P.O. Vidyanagar-583275, Toranagallu.
The big names in the mining world also find a place in this chapter. As Paranjoy Thakurta explains, it is this involvement of big companies and powerful politicians that makes the scam as large as it is. The “certain payment” made by SWML to Prerana Trust that the chapter refers to is this:
Refer to Table 3-Chapter 22
A close reading of chapter 22 tells us why this transaction is important. A transaction of this scale between SWML and Prerana Trust, which had the then CM’s sons as trustee at the time of transaction, is alarming. According to the investigation by the Lokayukta, SWML wasn’t financially sound and had approached JSW for favours. The money paid by the company to the trust in question was the money received by SWML from JSW (the report provides the bank transaction as evidence). Explaining the main reason why these transactions had to be made, the points out a very interesting development that preceded this transaction:
The JSW (JSW Steel Ltd ), SWML and VMPL (Vijayanagar Minerals Pvt. Ltd) have submitted the letters to the Director, Mines and Geology and Secretary, Mines requesting to submit suitable clarification to the Ministry of Mines, Government of India so as to process the recommendation of Government of Karnataka in their favour.
It is in this chapter that the report recommends an investigation, terming the involvement of Prerana Trust suspicious. The chapter concludes with Hegde suggesting that the Chief Minister and his relatives be investogated:
I am of the opinion that these are sham transactions and the donation and the excess payment made to the family members of the Chief Minister, is to get a favourable reply from the State Government to the Central Government. In this background, receipt of money either as donation or as sale consideration amounts to receiving illegal gratification to show an official favour, which is an offence under the Prevention of Corruption Act, 1988. Therefore, I consider it necessary to recommend to the Competent Authority to take appropriate steps to initiate criminal proceedings against the Chief Minister and such other persons who are involved in the said transaction.
In 2012 Yeddyurappa challenged this chapter, Chapter 22, in The Karnataka High Court. Following this, the court “quashed” the Lokayukta report. An article in The Hindu reported that the court had noted, “Lokayukta did not issue notice to Mr. Yeddyurappa before making recommendations against him.” The same article also mentioned that the Samaja Parivarthana Samudaya of S R Hiremath had approached the Supreme Court, and
…the Supreme Court, sought a report from the Central Empowered Committee (CEC) on the mining transactions involving M/s JSW Steel and South West Mining Company. The Supreme Court, on the recommendation of CEC, in May 2012 directed the CBI to probe the case by registering an FIR and submit report to the jurisdictional court in Bengaluru.
On 16 October 2012, the Central Bureau of Investigation (CBI) filed a charge-sheet naming Yeddyurappa and 12 others. On 26 October 2016 all the accused were acquitted on the grounds of lack of evidence.
According to a report in the Deccan Chronicle, the CBI had sent an appeal challenging the Karnataka High Court’s judgment, but this was turned down by the Directorate of Prosecution under the Ministry of Law and Justice. According to the same report, the Union Government decided against the appeal. On 27 July 2017 the Supreme Court pulled up the CBI for not being able to file an appeal in the case; but, on 9 August 2017, the Union Government declared that it was upto the CBI to decide.
Reflecting on Amit Shah’s freudian slip
Amit Shah might have corrected his Freudian slip on stage; the CBI court might have acquitted Yeddyurappa and all the accused.
But it cannot be dismissed that the largest mining scam in the country, reported in Bellary, Karnataka, happened during the regime of Yeddyurappa from 2008-2011. As Santosh Hegde, the former Lokayukta, has rightly asked ,
Can it be disputed that 2.4 lakh worth metric tonnes was deposited in Belekeri port? Can it be said this disappeared? There should be somebody answerable for this. 2,40,000 tonnes is a huge amount. It requires dozens of ships to be taken away. And how can it go when it is controlled by the Port Officer, by the Investigating Officers of the Lokayukta. How can anybody explain?
Mr Hegde might have to wait a long time for any answers. In fact, we might never find answers to such questions. Afterall, Yeddyurappa is in the esteemed company of Narendra Modi, who was acquitted by the same Supreme Court of having any involvement in the infamous Gujarat riots of 2002, when he was the Chief Minister of the state. Even then, the court had dismissed the charges claiming a lack of evidence.
The export and mismanagement of 2,40,000 tonnes of iron ore is evidence enough to say the scam happened. How did the scam happen? How did the government of Karnataka incur a loss of one lakh crore? In light of the neither the Union Government nor the CBI has appealing to the Supreme Court, the answers to these questions might never come to light. Yeddyurappa, now acquitted of all charges, remains BJP’s Chief Ministerial candidate.
Yogesh S is part of the editorial collective of the Indian Writers' Forum.
First Published on Indian Cultural Forum