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Indian mining magnate held for graft
Source: Agencies |
September 6, 2011, Tuesday
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POLICE arrested a powerful opposition politician and mining baron in India's mineral-rich Karnataka state yesterday over illegal iron-ore production, the latest high profile arrest as a beleaguered government seeks to dig out deep-rooted corruption.
Federal agents took G. Janardhana Reddy from his home early yesterday, raided his properties and also arrested his cousin Srinivasa Reddy, who is the managing director of the family-owned Obulapuram Mining Co. "Charges are conspiracy, cheating and irregularities under the mining act," said a Central Bureau of Investigation spokeswoman in New Delhi.
The national opposition party, the Bharatiya Janata Party, which rules Karnataka, said the arrests were "vindictive action" by the ruling center-left coalition led by Prime Minister Manmohan Singh.
Parliament has been almost totally absorbed by the issue of corruption since last year as opposition parties see the chance of weakening the government.
A near-two week hunger strike in August by 74-year-old social activist Anna Hazare brought the nation to a standstill until parliament agreed to tougher anti-corruption legislation. The legislation has still to be passed by parliament.
That paralysis may now be hurting the US$1.6 trillion economy, with investor confidence dipping as much-needed reforms in retail, land and taxes are put on hold.
Singh in particular has been under increasing criticism for failing to deal with multi-billion dollar scandals in telecommunications, sports and mining that have helped trigger the biggest protests in decades and paralysed his government.
Topping the scandals is a charge a telecoms minister rigged the 2007/08 issuance of lucrative telecoms licenses, at a cost of US$39 billion to state coffers. The minister, since fired, is in prison along with several executives pending trial.
The mining scandal hits in the only state run by the BJP in southern India, and it may deal a blow to the party's election prospects in a state once seen as a springboard for its electoral growth across the south.
Police said yesterday's arrests were related to allegations of illegal mining in the state of Andhra Pradesh where Reddy's company Obulapuram also operates.
Reddy was among those implicated in a July probe by an independent anti-corruption ombudsman that exposed an alleged US$3.6 billion scam affecting iron ore exports from Karnataka, which is home to India's outsourcing and IT hub, Bangalore.
Links between Karnataka politicians and mining were described by the ombudsman as a "mafia-type of operation," and the arrest is seen by some as striking a blow at provinces' traditional power structures.
"It is significant in the sense that a well known political personality has been caught for alleged corruption, it gives the impression that the government is now very serious," said D. H. Pai Panandiker, head of Delhi think-tank the RPG foundation.
The Reddys are major figures in mining in India and have for years also held high government offices in Karnataka, the second largest producer of iron ore in the country. The state's chief minister B. S. Yediyurappa, also implicated in the report, was forced to resign in July.
Federal agents took G. Janardhana Reddy from his home early yesterday, raided his properties and also arrested his cousin Srinivasa Reddy, who is the managing director of the family-owned Obulapuram Mining Co. "Charges are conspiracy, cheating and irregularities under the mining act," said a Central Bureau of Investigation spokeswoman in New Delhi.
The national opposition party, the Bharatiya Janata Party, which rules Karnataka, said the arrests were "vindictive action" by the ruling center-left coalition led by Prime Minister Manmohan Singh.
Parliament has been almost totally absorbed by the issue of corruption since last year as opposition parties see the chance of weakening the government.
A near-two week hunger strike in August by 74-year-old social activist Anna Hazare brought the nation to a standstill until parliament agreed to tougher anti-corruption legislation. The legislation has still to be passed by parliament.
That paralysis may now be hurting the US$1.6 trillion economy, with investor confidence dipping as much-needed reforms in retail, land and taxes are put on hold.
Singh in particular has been under increasing criticism for failing to deal with multi-billion dollar scandals in telecommunications, sports and mining that have helped trigger the biggest protests in decades and paralysed his government.
Topping the scandals is a charge a telecoms minister rigged the 2007/08 issuance of lucrative telecoms licenses, at a cost of US$39 billion to state coffers. The minister, since fired, is in prison along with several executives pending trial.
The mining scandal hits in the only state run by the BJP in southern India, and it may deal a blow to the party's election prospects in a state once seen as a springboard for its electoral growth across the south.
Police said yesterday's arrests were related to allegations of illegal mining in the state of Andhra Pradesh where Reddy's company Obulapuram also operates.
Reddy was among those implicated in a July probe by an independent anti-corruption ombudsman that exposed an alleged US$3.6 billion scam affecting iron ore exports from Karnataka, which is home to India's outsourcing and IT hub, Bangalore.
Links between Karnataka politicians and mining were described by the ombudsman as a "mafia-type of operation," and the arrest is seen by some as striking a blow at provinces' traditional power structures.
"It is significant in the sense that a well known political personality has been caught for alleged corruption, it gives the impression that the government is now very serious," said D. H. Pai Panandiker, head of Delhi think-tank the RPG foundation.
The Reddys are major figures in mining in India and have for years also held high government offices in Karnataka, the second largest producer of iron ore in the country. The state's chief minister B. S. Yediyurappa, also implicated in the report, was forced to resign in July.
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