Bellary brothers are back

The brothers who had boycotted a meeting in Bangalore held in May to celebrate Yeddyurappa’s one year in power turned up at a similar meeting on June 17 in Davangere district that borders their own Bellary district. Two days later,a Cabinet meeting decided to drop a criminal case pending against the brothers and their supporters pertaining to destruction of a temple located on their mining land,and election code of conduct cases of 2008.

The case against Janardhan,who also owns the Oblapuram Mining Company,for alleged destruction of the 200-year-old Sugalamma Devi Temple located in the mining zone — in the course of triggering explosions for mining iron ore — in September 2006 was dropped despite objections from the police and Law Department. Among the arguments offered for dropping the case is that the temple is not located on the Karnataka side of the border with Andhra Pradesh.

Opponents of the Reddy brothers,including rival mine owners,have accused the brothers of moving the Karnataka border and encroaching on forest lands in order to facilitate their mining operations. They are now threatening to move the Karnataka High Court over the Government’s alleged largesse to the brothers.

In the past few weeks,the Reddys have — through their obstinate stance and veiled messages to the Government — also managed to bring back to Bellary several police and local officials who had been transferred at the time of the Lok Sabha polls on the instructions of the Election Commission.

They have also been able to protect the five ministers who swear allegiance to them,forcing Yeddyurappa to minimise his cabinet restructuring last week to a single induction and exit.

Much of the brothers’ political maneuvering after the recent polls has been overshadowed by Janardhan Reddy’s June 12 presentation of a Rs 45-crore,diamond encrusted gold crown to the Tirumala Tirupati Temple. Asked by reporters in Karnataka about the need,the Reddys said the temple was a family shrine. Karunakar went on to say that Gods in Karnataka were less demanding than Gods in Andhra Pradesh.

THE RISE & RICHES

The Reddy brothers,sons of a former police constable,have straddled politics and business in both Andhra and Karnataka over the past five years to chart a meteoric rise in terms of wealth and power.

Powering the climb is the phenomenal iron ore export market triggered by a global demand and primarily by China’s 2008 Beijing Olympics construction boom.

On the strength of their iron ore exports wealth,the Reddys forged a business partnership in Andhra with Congress CM Y S Rajashekhar Reddy’s son Jaganmohan Reddy while charting their own political path with the BJP in Karnataka. While they have a firm grip in the current Karnataka Government,the Reddys are in the process of building a Rs 25,000-crore steel plant called Brahmani Steels in association with the Andhra CM’s family,on 17,000 acres of land in Kadapa,YSR’s home district.

Last year,the brothers had announced the acquisition of a 438-acre iron ore mining property in Indonesia under the name of the G Janardhan Reddy Corporation to feed the demand for ore when the Kadapa steel plant starts in 2010.

“People say we are worth Rs 100 crore. I want to correct it — we are worth Rs 1,000 crore,” Janardhan,considered the chief brain in the family,said during a heated exchange with the Opposition in the Assembly last year.

In 2007,after the Brahmani Steels project was awarded land by the Andhra Government,Janardhan threatened to sue an opposition TDP MLA for implying that he was worth only Rs 30 crore. “It is alleged that I don’t have financial resources and that my entire family’s net worth is only Rs 30 crore. But my wife and I have a net worth of Rs 115 crore. I own a helicopter worth Rs 15 crore,deluxe bus worth Rs 4 crore and cars worth Rs 5 crore,” he said.

SMALL BEGINNINGs

For many,the rise of the Reddys in business and politics in less than a decade is a matter of disbelief.

In Bellary,many still remember them moving on motorcycles,dabbling in businesses as varied as newspapers,computer equipment,financial services,hospitality and construction as recently as the late 1990s — until the iron ore boom happened.

Records at the office of the registrar of companies in Bellary show Janardhan launched several companies. A frequently narrated story is that of a financial firm — Ennoble India — launched by him that ran into trouble after payment defaults. He paid investors crores after his Oblapuram Mining Company began raking in big bucks around 2003.

Politically,their association with the BJP in Karnataka began when Sushma Swaraj fought Sonia Gandhi in Bellary in 1999. Still with motorcycles,the brothers played aides alongside their friend B Sreeramulu — the current Health Minister and almost a Reddy brother himself by association.

In 2004,the brothers made their own foray into politics with Karunakar winning the parliamentary polls,registering the BJP’s first victory over the Congress in Bellary. This period also saw Janardhan getting elected to the legislative council from the BJP.  

The Reddy brothers made their big political surge in the 2008 Assembly polls when they are believed to have bank rolled 20 BJP candidates from districts neighbouring Bellary. When the BJP won 110 seats and reached within touching distance of 113,they moved swiftly to induce five Independent MLAs to help the BJP form the Government.

Houses & cars

Their rise has seen the family home in Bellary expand and spread into a palatial one that currently features an outdoor party and conference area. There are also apartments and houses in Bangalore and Hyderabad.  

The Reddys and their homes now have multiple layers of security comprising men from Jharkhand and UP. Their cars are bulletproof and they own two Bell helicopters that they use to hop around the state and country. For 2006-07,the consolidated revenue of the Reddy group was put at Rs 2,008 crore by Janardhan,with the Oblapuram Mining Company alone bringing in Rs 1,200 crore.

The biggest indulgence of the brothers,especially Janardhan,has been cars. Over the past two years,he has added a Rolls Royce Phantom for Rs 4.5 crore and a BMW to his already existing fleet of a Mitsubishi Pajero,a Volkswagen,a Mercedes Benz,an Audi and a dozen India-made vehicles. A Reddy entourage is easy to spot because it invariably has two imported cars and half a dozen Indian SUVs carrying security men and assistants — a rare sight for politicians in Karnataka although common in filmy Andhra.

Among other prized items owned by Janardhan is a state-of-the-art bus costing Rs 4 crore. It has a bedroom,kitchen,satellite phone facilities,plasma TV and internet connection.

Eldest brother Karunakar,who declared assets worth Rs 34.06 crore during his nominations for the 2008 Assembly elections,owns a Mercedes Benz and a Skoda. The youngest,Somashekhar Reddy,declared assets worth Rs 27.43 crore.

Apart from donations to temples,the brothers are credited with investing personal money to further their political cause. They are credited with launching a Rs 25-crore drinking water scheme in Bellary in their mother’s name with personal money. They are also credited with using their own money to kick start road projects.

The brothers have been under the Income Tax scanner and were raided by the department in October 2006. According to recent Income Tax Department estimation records,the unaccounted income for the brothers and their businesses over the past three years was Rs 125.94 crore. As per the Reddy brothers own admission,the undisclosed income for the same period is Rs 50.97 crore.