Now Krishna, 2 ex-CMs face Karnataka mining heat

The mining scam in Karnataka brought down B S Yeddyurappa from the chief minister's seat. Now it threatens to expose the state's three former chief ministers -- S M Krishna, H D Kumaraswamy and N Dharam Singh. Vicky Nanjappa reports

The mining scam in Karnataka has seen many a heads roll. The latest to face the heat are the state's former chief ministers S M Krishna, H D Kumaraswamy and N Dharam Singh.

The complaint filed before the state Lokayukta court by Y Abraham, a resident of Bengaluru, who is the president of the Karnataka Anti-Graft and Environmental Forum, names the three former CMs in it apart from other IAS officers as well.

The complaint filed under Section 200 of the Code of Criminal Procedure states that the accused persons should be punished for corruption and causing loss to the public exchequer.

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S M Krishna, who is named as accused in Abraham's complaint, is alleged to have committed various acts of omission and commission of illegalities in the grant of leases for mining in Karnataka during his tenure as the chief minister.

Abraham also claims that during Krishna's tenure as the CM, as per an agreement dated January 17, 2002, Kalyani Ferrous Industries Limited paid sales advance of Rs 6 crore as security for purchase of iron ore.

According to the complainant, the provision for payment of advance or security deposit is found in all agreements because the state-owned Mysore Minerals Limited releases iron ore or ore fines sold by it only after full purchase amount is deposited in advance. The agreement with Kalyani Ferrous requires MML to pay interest on that advance amount at the rate of 10 per cent per annum. There is no provision for payment of interest on such advance or security deposit in agreements entered into with other companies.

The interest paid on that amount by MML to Kalyani up to 2006-2007 comes to about Rs 2.5 crore. This is amongst others another favour shown to Kalyani at the cost of MML.

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According to the Memorandum of Understanding dated January 17, 1997, MML was to place Thimmappanagudi mines at the disposal of Vijayanagar Mines Private Limited while Jindal would place at the VMPL's disposal the A, D and E blocks that may be granted to them on lease by the government.

As agreed, MML placed Thimmappanagudi mines at the disposal of VMPL and the VMPL was permitted to carry out mining operation there since 1999 -- vide clause 6 of service agreement dated February 2, 1999, and was supplying iron ore to Jindal steel plant.

It is learnt that Jindal, till this day, has not placed any mines at the disposal of VMPL.

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Also, as per the MoU dated January 17, 1997, the MML was to receive premium on the sale of two grades of iron ore -- the lumpy ore and the iron ore fines -- at 10 per cent and 6 per cent of the ruling market price respectively.

Against this understanding, the MML has consistently invoiced the premia claim at the rate of Rs 30 per MT of lumpy ore and Rs 6 per MT of iron ore fines. The premia invoiced are much below the percentage value calculated on the basis of the prevailing MMTC prices for different grades of iron ore.

This apart, the VMPL also generated other grades of iron ore viz., basic ore, low grade lumps and low grade calibrated ores during the period under report. The supply of these grades of ore were not foreseen at the time of execution of MoU and consequently also for purposes of calculation of premia payable by the VMPL.

According to the complainant, MML should have taken up the matter with VMPL and claimed premia thereon. In the absence of any such arrangement, MML suffered by not realising the premia on these grades of ores. 

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The other allegation is that the Krishna de-reserved thousands of acres of forest land in and around Bellary district, and sanctioned it to 10 private companies in 2003 despite opposition from the then Minister for Forest and the then Secretary, Forest Department, expressing his disagreement towards de-reservation.

The complaint alleged that Krishna's act was 'a shameful beginning or introduction of the large scale destruction of reserved forest areas and the actual advent of large scale illegal mining, which could be termed as the author of all the mining scams'.

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The complaint against Dharam Singh goes on to allege that he along with other officials caused huge financial loss to the state to an extent of Rs 31 crore to the exchequer by permitting illegal transportation of 3,09,113 MT of iron ore. 

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In the complaint against H D Kumaraswamy, the complaint accuses him of taking a bribe of Rs 150 crore from miners in July 2006, leading to a speculation that the Janata Dal-Secular was under the influence of the mining lobby. It is alleged that he had illegally approved the mining lease in favour of Shree Sai.Venkateswara Minerals.

Further, the complaint speaks about Kumaraswamy indulging in illegalities in the case of M/s Janthakal Enterprises ML NO.593/993, where a mining lease (No 593/993) at Hirekandawadi and Tanigehalli villages of Holalkere Taluk, Chitradurga district was granted in 1965 in favour of one K Raghavendra Rao.

M/s Janthakal Enterprises claimed that the said mine was transferred in its favour in 1967 though no Government Order is available in any file/ records of the state government as well as with the lessee.

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