How the Big Bellary Brothers gave BJP its winning edge

The brothers—Gali Karunakar Reddy, Gali Janardhan Reddy and Gali Somashekhar Reddy—sons of a former police constable, had virtually delivered almost four districts of the state on a platter to the BJP and were not going to allow any slips between the cup and the lip.

The eldest brother, Karunakar Reddy, 46, a sitting MP from Bellary had contested the assembly polls from a neighbouring district and registered a victory, so had his youngest brother Somashekhar Reddy, 42, the former mayor of Bellary.

The family’s good friend and virtual fourth brother B Sriramulu had bagged Bellary Rural and his nephew Suresh Babu had won another of the Bellary seats.

The most talked about Reddy in Karnataka, Janardhan, 44, was already a sitting member of the Karnataka legislative council while an assortment of people connected to the Reddys had won from the neighboring districts.

The BJP-versus-Congress scorecard in the poll results for the constituencies in Bellary and three neighboring districts of Davangere, Gadag and Haveri where the Reddy brothers had focussed their energies for a BJP victory read 8-1, 6-2, 4-0 and 5-1 respectively—playing a crucial role in the overall BJP victory.

In the blame game following the elections, several Congress leaders have blamed their party’s loss on the monetary backbone extended to BJP candidates by the Reddy brothers.

Incidentally, an income-tax raid had been carried out on the Reddys in October 2007 and, according to sources, the brothers coughed up more than a few crores as dues.

There is little doubt that the Reddy brothers —friends of the Congress across the border in Andhra Pradesh—will be calling much of the shots in the new BJP government, to the discomfort of the BJP Chief Minister designate B S Yeddyurappa.

In a meteoric rise to power on the back of a rising global demand for iron ore, the Reddy brothers in a span of less than a decade have emerged from the badlands of Bellary —using brawn, brain and money, as a power centre to be reckoned with.

In Bellary, residents still recall seeing the Reddy brothers moving around on two-wheelers as recently as 1998 when they were primarily involved in the finance business under the aegis of a company Ennoble Savings and Investment India Pvt Ltd.

The finance business went on for nearly a decade before running aground in the late 1990s with complaints of cheating. The Reddy brothers coughed up nearly Rs 200 crore to pay back debtors at this point of time.

The Bellary brothers, who originally hail from Andhra Pradesh, emerged on the political circuit in 1998-99 when BJP leader Sushma Swaraj fought Congress leader Sonia Gandhi for the Bellary parliamentary elections.

The Reddy brothers along with Sriramulu worked for the BJP campaign and emerged as key aides to Sushma Swaraj in an alliance that continues to this day. Once a Congress stronghold , Bellary has since 1999 slowly slipped into the BJP grasp and much of the credit for this is given to the Reddy brothers and Sriramulu. Locals from Bellary say the Reddy brothers have personally financed a Rs 25 crore drinking water project for Bellary following delays in a government-funded project.

The big shift in the power wielded by the Reddys really came around 2003 when the Obulapuram Mining Company, owned by the brothers, with mining leases largely in the Ananthapur district in Andhra Pradesh, bordering Bellary, began booming with iron-ore exports.

According Arvind Srivastava, the deputy commissioner of Bellary, the iron-ore mining business was not big till August 2003 when China began importing to build for the 2008 Beijing Games. “The demand for steel since then has seen prices spiral up from Rs 100 per ton to Rs 2,000 per ton on an average,” he says.

An average of nearly Rs 4,000 crore of profit before tax has been generated from the iron-ore business in Bellary alone in the last five years. At one point at the peak of the iron ore boom, the Reddy brothers claimed they had assets of over Rs 100 crore. But their worth now is estimated to be several times more. A helicopter is part of the family’s modes of transport now while a dedicated rail link carries iron ore right from the Obulapuram Mining Company.

In the 2004 assembly and parliamentary elections, the BJP ruled the roost in Bellary with Karunakar Reddy elected MP and Sriramulu elected MLA. Janardhan Reddy hit the headlines in 2006 when he alleged that the then Chief Minister H D Kumaraswamy had collected Rs 150 crore in bribes from Bellary.

While the dust settled on the bribery scandal, the Reddys forged a friendship with the family of Andhra Pradesh Chief Minister Y S Rajashekhar Reddy and expanded their mining interests in Andhra Pradesh—in a controversial move that even had rumblings in the AP assembly in July 2007.

The Andhra CM who campaigned for the Congress in Bellary for the recent elections said that his links with the Reddy brothers is business-related and not political.

In 2005, Janardhan Reddy was given 450 acres by the YSR government on lease to mine iron-ore at Obulapuram in Anantpur district bordering Karnataka. The Opposition, Telugu Desham Party, has alleged that YSR’s son Jagmohan Reddy is a partner and YSR had invested in the company.

The Reddy brothers also own Brahmani Steels in Cuddapah, YSR’s home town. The YSR government allotted 17,000 acres to Janardhan Reddy in May 2007 to set up a Rs 25,000-crore steel plant there. Another 4,000 acres were allotted to construct an all-weather airport to operate 75-seater aircrafts—the second one in Cuddapah.

YSR’s son Jagmohan Reddy refutes the allegation that he has a stake in the Obulapuram Mining Company. His personal website says: “Mr Jagmohan Reddy said there was no need for him to own properties and industries in benami names.” The website quotes him: “ I owned industries and limestone mines much before Dr Y S Rajasekhara Reddy became Chief Minister.”

Sources say the lands for the mine as well as steel plant were allotted to Janardhan Reddy at less than the market price and the opposition TDP had levelled allegations of corruption. In fact, based on a PIL filed by a farmer, the Andhra Pradesh High Court in August 2007 set aside the lease given by the YSR government to Janardhan Reddy but later cleared it.

(with Janyala Sreenivas in Hyderabad)