Bellary barons, Karnataka kings

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By TT Bureau
  • Published 8.11.09

The flat screen television in S.K. Modi’s swanky granite, glass and chrome office in the mining town of Bellary in Karnataka beams a Kannada news channel. Modi, managing director, Bellary Iron Ores Pvt Ltd, is closely following the politics being played out at the Bharatiya Janata Party (BJP) headquarters in Delhi. Gali Janardhan Reddy, 42, Karnataka’s tourism minister who is leading a revolt against chief minister B.S. Yeddyurappa, is addressing the media after the party leadership’s decision on Thursday that the chief minister will stay. “For the first time in days, the man is looking shaken. I am so glad,” says Modi.

Like Modi, there are many who would like to see the Bellary Brothers — which includes Janardhan’s two elder brothers, Karnataka revenue minister Karunakara Reddy, 47, and Karnataka Milk Federation chairman Somashekhar, 44 — and their close confidant B. Sriramulu, 38, health minister, bite the mining dust that brought them fame and fortune. Their dizzying rise in less than a decade from small town businessmen and political nobodies to a quartet that has held governance in Karnataka to ransom for two weeks has generated enormous resentment in the state’s mining and political circles.

No wonder that Janardhan Reddy’s sprawling mansion — ironically called Kutira, or a cottage — in Bellary’s Sirguppa Road, has two levels of security. An armed gunman stops visitors at the first point, leading to another check at the main entrance. Most visitors are allowed only up to an open hall made of granite. Janardhan himself rarely meets anyone; that’s left to Sriramulu. It’s the same story at his Parijat Apartments residence in Bangalore. Safari suited security men straighten up if a car drives past slowly.

The family’s saga of success has been scripted by Janardhan, the most ambitious of the brothers, and helped by Sriramulu. The Reddys started life in a two-room house of the reserve police quarters in Bellary. Their father, Chenga Reddy, originally from Andhra Pradesh’s Chitoor district, was a police constable in Bellary. Seniors at the Bellary Municipal School and later the local college remember the brothers as sober, studious youngsters.

After college, Karunakara took up petty civil contracts while Janardhan started working as an agent for a local chit fund company. That was where, an old schoolmate recalls, he learnt how to handle money. He got into business himself, starting Ennoble India Savings and Investments India (which was closed in 2004) and a daily newspaper called Ennama Kannada Nadu, in the mid-1990s. “He wanted to be the Subrata Roy of the south,” says a Bellary politician, referring to the chief of the Sahara group.

But it was their foray into mining in 2001 — when they bought the Obulapuram Mining Corporation (OMC), with mines in neighbouring AP, from a local mine owner for Rs 5 crore — that pitched them into the big league. It was great timing. From 2002, soaring demand from China saw prices of iron ore skyrocketing — from Rs 200 a tonne to Rs 3,000. Like other miners, the brothers became part of the Bellary Billionaires.

From moving around on cycles and Luna mopeds, they were soon owners of imported cars and helicopters. The huge parking area at Kutira has 13 cars — including BMWs, a Mitsubishi Pajero, a Ford Endeavour, a Land Cruiser and a Honda CRV. Karunakara’s election affidavit lists five cars, including a Mercedes Benz.

They also displayed their charitable side — a plush old age home and a residential school for mentally challenged children in Bellary. The gods were also won over — in June they donated a Rs 45-crore diamond-encrusted gold crown to the deity at the Tirupati temple.

By then the brothers had made their foray into politics, throwing their fortunes with the BJP, helping Sushma Swaraj fight Sonia Gandhi for the Bellary Lok Sabha seat in 1999.

Janardhan had realised the importance of political influence for success in business. The brothers initially flirted with the Congress through Sriramulu, who became a Congress councillor in Bellary after the murder of his politician brother-in-law. When he didn’t get a Congress ticket for the 1999 assembly elections, they switched sides.

The brothers concentrated on building up the BJP in Bellary — a Congress stronghold since independence — and adjoining districts. They exploited the infighting in the district Congress, used Sriramulu, a scheduled tribe, to woo the scheduled tribes and scheduled castes, who are a majority in the area, and won over villages with health, education and sanitation facilities and organising mass marriages during the annual Varamahalaxmi puja (the time Swaraj used to visit Bellary) and Moharram.

The efforts worked — they ended up putting 23 assembly seats in the BJP bag. The party, in turn, was beholden to them, especially after they wooed legislators to ensure that the BJP formed a government in 2008.

But links with the Congress remained. In AP, they got close to the late chief minister Y.S. Rajashekhar Reddy, becoming business partners with his son, Y.S. Jaganamohan Reddy, and setting up a joint venture steel plant — Brahmani Steels — in Kadapa, YSR’s home town.

It is this clout on both sides of the border, rivals say, that has made the brothers a law unto themselves in Bellary, ensuring that only pliant officers are posted there. The revolt against Yeddyurappa is also attributed to the mass transfer of district officials close to them. In Bellary, few are willing to speak about them; there is a fearful silence. “It is like something out of a Hindi or Telugu potboiler,” says a local politician. An FIR was recently registered against Somashekhar Reddy for threatening the manager of a construction company. “This is part of a larger political conspiracy against the Reddy brothers,” says a spokesperson for the brothers, hinting at the role of another minister.

Rival mine owners allege that OMC has encroached on their land and that 32 of them have been coerced into leasing land to Janardhan Reddy. Modi claims he is one of three mine owners who have stood up against them and that he has paid a price for it — a bodyguard and a Karnataka police gunman stand outside his office, while his wife and daughter also have a bodyguard each. Tapal Ganesh, owner of Tumti Iron Ore Mines, has lodged a case against OMC in the Karnataka High Court for “forcibly” encroaching upon his mining land. The spokesperson refutes both charges. “There is a lot of false propaganda because the Reddys are leading political figures.”

But what about a Karnataka Lokayukta report on illegal mining in the area which said the OMC had encroached on land in Karnataka? Or the five notices to OMC by the district forest officer of Anantapur in Andhra Pradesh, Kallol Biswas (now transferred), who told The Telegraph that OMC excavated 3.7 million tonnes of iron ore clandestinely?

“The OMC strongly denies the allegation of border altering. The Reddys have already demanded that a joint survey be conducted by Karnataka, Andhra Pradesh and the Union government to clear the dust,” says the spokesperson, though opponents claim they are not allowing the survey to be conducted. The Anantapur administration, the spokesperson counters, issued notices under political pressure. “Mining in the area is as per rules.”

As the brothers dig their heels in, it’s clear that the stakes for them are very high. Will their dream run continue or will their undisputed might be dented? Time alone will tell.