Links with Jagan out in the open

Jaganmohan Reddy, who is already under the CBI radar for alleged possession of disproportionate assets, may soon find himself in the agency’s dragnet.

According to CBI sources, it was a “quid pro quo route of money laundering from Gali brothers (Reddys) to Jagan’s enterprises” and they had evolved a mechanism through which large funds were transferred to the coffers of Jagati Publications.

Here’s how it worked: The CEO of Red Gold Enterprises Sajjala Rama Subba Reddy is also the CEO of Sajjala Iron and Steels Pvt Ltd, Bellary. The owner of this steel company is one Sajjala Diwakar Reddy who is none other than the brother of Sajjala Ramakrishna Reddy, the director of Sakshi group of newspapers owned by Jaganmohan Reddy.

As per an understanding, the Red Gold Enterprises was given 50 per cent of iron ore mined  by OMC owned by Janardhana Reddy at only 5 per cent appreciation over costs.

The proceeds of the same were invested in another venture the R R Global enterprises. Red Gold  and RR Global belonged to the same owners who are brothers – Sajjala Ramakrishna Reddy and Sajjala Diwakar Reddy who were directors in Jagati Publications owned by Y S Jagan.

Red Gold passed on Rs 90 crore earned from iron ore sale to RR Global enterprises which in turn invested Rs 44 crore into Jagati publications and Rs 30 crore into Indira television in the form of buying of its shares. It was a quid pro quo for illegal mining that the Andhra government had permitted the Gali brothers to indulge and transfer large tracts of land to them for setting up a steel company.
 
 Jagan had intervened several times allegedly with his goons whenever Gali brothers had problems in the Anantpur mines from rivals.

Janardhana Reddy was granted lease of 10,760 acres in Kadapa district by YSR for setting up the Brahmani Steel Company at a throw away price of Rs 18,500 per acre, which came to Rs 20 crore for the entire land. Reddy later raised Rs 350 crore from financial institutions by mortgaging the land.

The CBI investigation has also revealed that GJR International Holdings Ltd and GJR Holdings (Mauritius) (both belonging to G Janardhana Reddy) had bought  4.89 crore shares each of the Brahmani Steel for Rs 49 crore. One of the companies had also leased 438  hectares of iron ore land in Sumatra of Indonesia for supplies to Brahmani at Rs150 crore.

Later, the Gali brothers and Jagan reportedly sold away their stakes in Brahmani steels to the Jindals. It is common knowledge that OMC managing director Srinivas Reddy was a distant relative of YSR. Similarly Ramachandra Reddy, the joint managing director of Brahmini Industries was a Congress MLA from Rayadurg in Anantaupur and was a close follower of YSR.

A preliminary probe in November 2010  had revealed that the Gali brothers had illegally exported 1.97 crore tones of iron ore  worth Rs 5,308 crore mined in encroached forest and non-leased areas in Andhra Pradesh  with clandestine support of the YSR government. Although the leases of OMC-1, OMC-2, OMC-3, and Anantapuram Mining Co.
owned by the Gali brothers had expired in 2004, the YSR government had extended them till 2017. In OMC-1 though the lease area was just  25.98 hectares, the OMC had mined up even the  no man’s land and also other forest areas and thereby encroaching on the boundary areas between Karnataka and AP.

The OMC in all had only lease for only 132.98 hectares in Anantapur but Reddys had illegally extended the mining to nearly 326.5 hectares, including 150 hectares of forest land and  25 acres of no man’s land on the borders and also that other mining operators adjacent to theirs.