Hyderabad:
Jagan Mohan Reddy has denied allegations that his considerable business empire has secret links to another wealthy politician - G Janardhan Reddy, who is now in jail. (
Read Jagan's statement)
Jagan Mohan is the Congress MP from Kadapa in Andhra Pradesh. It was when his father, YSR, was Chief Minister of Andhra Pradesh that Janardhan Reddy was able to get mining lease extension for his Obulapuram Mining Company from 2004 to 2017. The Gali brothers also got five other mining leases in the name of other companies and were able to set up mines and related businesses that led to phenomenal wealth and political clout.
Janardhan Reddy's family was originally from Chittoor district of Andhra Pradesh and later moved to Bellary on the Karnataka side of the Andhra-Karnataka border. He worked skillfully on both sides of that border. In Karnataka, he became a minister. In Andhra Pradesh, he operated firms whose turnover seemed to magically multiply every year.
Janardhan Reddy was arrested early on Monday by the CBI for illegal mining. His OMC or Obulapuram Mining Company encroached into Bellary reserve forest area, and violated other conditions of its lease, including covertly exporting much of the iron-ore it produced.
An expert committee set up by the Supreme Court said that a mining lease granted by YSR to Janardhan Reddy was illegal as proper norms were not followed in allotting the lease. They also reportedly violated state borders and lease boundary pillar posts. The CEC report said the state government failed to monitor, supervise and that "the state government actions do not inspire confidence and seems to have connived in allowing the illegal mining activity''. That is why mining and forest officials likely to be in the dock.
Questions have also been raised about whether YSR gave 10,000 acres at throwaway prices for the Brahmani steel plant that was set up by Janardhana his brother in Kadapa. Jagan Mohan denies that the land for the steel plant was given at heavily-discounted rates because he originally owned a small part of that business. "Efforts are made to link us to Mr Gali Janardhan Reddy. All that my father did as Chief Minister was to invite them to promote a steel plant at Kadapa by offering the same concessions as were offered to any industrialist in the State as per the Mega Project policy... for those sitting in metropolitan cities, it is difficult to appreciate what is price of land in a rain shadow area, particularly when it is non-arable land... there are no takers for these lands at any price," he said.
This week, a series of media reports - including on NDTV - explored whether Jagan and Janardhana have ever formally shared business interests. A building in Hyderabad was the registered official address for Jagati Publications, owned by Jagan's media empire; as well as two other companies RR Global Enterprises and Red Gold.
RR Global has invested some 74 crore rupees in Jagathi publications and also in Indira Television, both owned by Jagan. And it is a company that trades in iron ore.
RR Global said to have earned Rs 90 crore between October 2007 and March 2009 - a questionably huge sum of money for a new firm.
Jagan Mohan says that while RR Global is one of his investors, it does not have any links to Janardhan Reddy. "RR Global where Mr Sajjala Diwakar Reddy is a director has invested in Sakshi and Diwakar Reddy's brother Mr Sajjala Ramakrishna Reddy who is a journalist for the past three decades is the editorial director of Sakshi. But what is the link between Gali Janardhana Reddy's companies and Diwakar Reddy's companies? Sajjala family has been in the mining business for the past three decades and RR Global is, or was not doing any business with Gali Janardhan Reddy's companies."
Also sharing the same address as these companies is Red Gold Enterprises. Documents accessed by NDTV show that Janardhana's mining company OMC was obliged to sell half of its iron-ore at basic cost price to Red Gold. The sweetheart deal was in return for Red Gold's help in getting licenses and permissions for mining.
"Is it strange for many companies running their offices from one multi-storied apartment complex in Metropolitan cities to have the same address?" asked Jagan Mohan about whether these links are clues to a formal relationship with Janardhana Reddy. "Three offices are located at three different flats in three different floors and therefore the allegation is completely baseless and malicious," said Jagan Mohan.