CM Yeddy’s family trust took money from mining firm: Hegde

Ater submitting the report running into 25,228 pages including annexures,Hegde told a press conference that he has named Chief Minister Yeddyruppa,former chief minister and JDS leader H D Kumaraswamy,the Reddy brothers (who are ministers and mining magnates),their camp follower and another minister H Sriramulu,Congress MP Anil Lad’s wife and over 600 officials in the mining racket that cost the exchequer Rs 16,085 crore between 2006 and 2010.

“Having come to the conclusion that there is as a matter of fact an offence made under the Prevention of Corruption Act,I have made a recommendation to the Governor to take further action,” Hegde said in respect of the donation made to the trust run by the chief minister’s family members.

At another point,he said,“I have made a recommendation for prosecuting everybody. I have stated this to the Governor. It is for him to act.”

To a question,he shot back,“Action under Prevention of Corruption Act should be taken. What else?”

The report castigated the BJP government,which is in power since May 2008,for its failure to check irregularities and illegalities in mining in the state.

“The inquiry has found large-scale involvement of officials,powerful people both in the administration as well as in the ground level,” said Hegde whose main report runs into 943 pages.

Hegde said investigations found a company dealing in iron ore donated Rs 10 crore to the trust run by family members of the chief minister.

From the trust,a mining company purchased an acre of land for Rs 20 crore far above the guidance value of Rs 1.40 crore,he said.

“This payment has been made to the trust which has nothing to do with the donating company… this company has not been doing well but borrowed money from another company to donate. I find extremely difficult to understand this abnormally high price.

“We have come to an incontrovertible conclusion that this donation and sale consideration has been made for reasons other than genuine,” he added.

Replying to questions,Hegde confirmed that the report makes a mention of the CM,his family members,the Reddy brothers,Sriramulu and Kumaraswamy and over 600 officials.

In Kumaraswamy’s case,the inquiry found “misconduct” on his part regarding grant of two mining leases. Action has been recommended under PCA.

Referring to the purchase of one acre of land in Rachenahalli on Bangalore’s outskirts for a consideration of Rs 20 crore when its guidance value would not be more than Rs 1.4 crore,he described this as “abnormal payment to a trust which has nothing to do with a donating company not financially strong”.

Hegde said he found it extremely difficult to accept that a company which did not have financial resources should borrow from other companies to make a donation.

“Therefore,having come to the conclusion that there is an offence under the Prevention of Corruption Act is made,I have made recommendation to the government to take further steps (against Chief Minister B S Yeddyurappa) in this regard because the competent authority for taking action against the chief minister is the Governor of the state.”

He said the Lokayukta has submitted the report to the government and a copy of the report with annexures have been sent to the Governor for “further action”.

On the Reddy brothers,Hegde said on their claim that they were not doing any mining in Karnataka,“We have enough documents to prove to the contrary.”

He said the illegalities found were of different types as has been enumerated in different chapters and supported by documents.

“The offences committed by various people and companies will be covered under various acts and action will be taken in accordance with law under IPC,Forest Act,FMRDA and PCA,” he added.

Hegde said the Lokayukta has recommended that since various illegalities and irregularities were committed the Government should cancel mining licences,compute the quantity of loss and treat it as “stolen iron ore” and recover money from people concerned at the market rate.

The Lokayukta inquiry found there was rampant illegal mining in Bellary,Chitradurga and Tumkur because of which local people suffered from various problems.

“Once illegal mining is stopped the central and the state governments can recover lakhs of crores of rupees as Excise and VAT,” he said,adding over 100 companies were involved in illegal mining.

Hegde has also recommended to the government that security be provided to his team of officers since they could face possible threats from some quarters.

The inquiry team had a huge task in examining four lakh records and collating nearly 50 lakh entries in the effort to produce the report,Hegde said.