Press Esc to close
Wednesday 26 April 2017
News updated at 2:22 AM IST

Reddy firm broke many laws

Last updated: 28 July, 2011
Bangalore, Jul 28 (DHNS) 9:09 IST

Illegal money transfers and under-invoicing detected

Benami transactions, under-invoicing and tax evasion are among the findings by the Lokayukta against the Reddy brothers.

The State-appointed ombudsman has recommended the removal of three Ministers - G Janardhana Reddy, G Karunakar Reddy, and B Sriramulu - from the Cabinet as they were on the board of Obulapuram Mining Company(OMC) that was guilty of several illegalities.

The company is accused of exporting iron ore at far below market rates to a Singapore-based firm, GLA Trading. Officers of the Income Tax department discovered that Janardhan Reddy was a Director of GLA at the time. (GLA is said to refer to Gali Laxmi Aruna, wife of G Janardhana Reddy).

In the years 2007-08 and 2008-09, OMC exported 8.5 lakh MT of iron ore to GLA Trading International Limited, Dubai. According to records obtained from Kakinada, Krishnapatnam, and Vishakapatnam ports, OMC was found to have exported ore originating from Karnataka. This busts the Reddys claim that they have not been involved in mining in Karnataka.

According to the I/T department, the total under invoicing has been pegged at 52 million US dollars, or Rs 215 crore. "It should be noted that this under-invoicing has caused loss to the Government from export made to GLA by OMC for two years," says the report.
It also notes that the Union Government had lost foreign exchange due to it, and observes that the money may be parked in tax havens.

This conclusion has been arrived at as GLA Trading has a dubious history.

The company, earlier Man-Go Pub Pvt Ltd, was a company registered in Singapore. One share of this company was transferred in favour of GJR Holdings with its address at Isle of Man. "Again it should be noted that the letter GJR in this company refers to Gali Janardhana Reddy and the company is registered in Isle of Man, which is (an) internationally known 'tax heaven'," the report notes.

The share was then transferred to another firm Interlink Services Group Limited in British Virgin Islands in June 2009, another tax haven. The Lokayukta also notes that after it began investigation into the illegal exports, Janardhan Reddy ceased to be a Director of GLA Trading with effect from December 12, 2009.

Dubious transactions


The Lokayukta has also found benami transactions involving Associated Mining Company (AMC) - owned by Janardhan Reddy and his wife Aruna - and Sri Bhakta Markandeshwara Minerals (SBMM).

The Lokayukta has concluded that bank accounts operated by SBMM are benami accounts operated by proxy. Other payments to “G J Reddy Sir” from SBMM have also been found, as payments for risk protection.

Suggestions

* Removal of Janardhana Reddy, Karunakara Reddy, and Sriramulu from the Cabinet
* Recovery of Rs 215 crore from OMC for under-invoicing
* RBI should take action against OMC for parking money abroad
* Recovery of illegal payments to “GJ Reddy sir” and AMC
* Filing of cases for benami transactions.

Go to Top

Photo Gallery
Wife of of CRPF martyr Surender Thakur, who was killed in Naxal attack in Sukma chhattisgarh ...

Wife of of CRPF martyr Surender Thakur, who was killed in Naxal attack in Sukma chhattisgarh ...

Wife of CRPF martyr Inspector Raghbir Singh saluting her husband's body during his funeral in ...

Wife of CRPF martyr Inspector Raghbir Singh saluting her husband's body during his funeral in ...

Daughter of CRPF martyr Sanjay Kumar, who was killed in Naxal attack in Sukma chhattisgarh, wail ...

Daughter of CRPF martyr Sanjay Kumar, who was killed in Naxal attack in Sukma chhattisgarh, wail ...

CRPF martyr Inspector Raghbir Singh being carried during his funeral in village Sathiala, some 50 ..

CRPF martyr Inspector Raghbir Singh being carried during his funeral in village Sathiala, some 50 ..

Union Minister Radhakrishnan paying respect to the body of CRPF martyr Alagupandi, at Madurai ...

Union Minister Radhakrishnan paying respect to the body of CRPF martyr Alagupandi, at Madurai ...

Injured CRPF jawans being airlifted to Raipur by an IAF chopper for treatment on Monday follwing ...

Injured CRPF jawans being airlifted to Raipur by an IAF chopper for treatment on Monday follwing ...

Union Home Minister Rajnath Singh enquiring about the health of injured CRPF personnel at the ...

Union Home Minister Rajnath Singh enquiring about the health of injured CRPF personnel at the ...

School children pay tribute to CRPF jawans killed in the naxal attack in Chhattisgarh's Sukma ...

School children pay tribute to CRPF jawans killed in the naxal attack in Chhattisgarh's Sukma ...

Union Home Minister Rajnath Singh paying tribute to CRPF jawans killed in the naxal attack in ...

Union Home Minister Rajnath Singh paying tribute to CRPF jawans killed in the naxal attack in ...

Injured CRPF being brought to Raipur for treatment on Monday follwing a Maoist attack at Burkapal ..

Injured CRPF being brought to Raipur for treatment on Monday follwing a Maoist attack at Burkapal ..

Like us on Facebook

Copyright 2017, The Printers (Mysore) Private Ltd., 75, M.G Road, Post Box 5331, Bengaluru - 560001
Tel: +91 (80) 25880000 Fax No. +91 (80) 25880523
Powered by Yodasoft Technologies Pvt. Ltd.