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| On 14 November 2011 person known as Rajendra Dixit registered a complaint at ] ] Office against ] ] ]'s mining firms , demanding a Lokayukta probe against an alleged iron ore <ref> </ref> mining scam worth Rs 5000 crore allegedly committed at ], ]. He also presented on record copy of the note-sheet which was said to be prepared at the orders of then CM ] on June 24, 2002 in which he allegedly ordered the upper secretary, Department of Forest to declare the forest land as revenue land to to allow Pathak's mining firms perform iron ore Mining at the sight. | On 14 November 2011 person known as Rajendra Dixit registered a complaint at ] ] Office against ] ] ]'s mining firms , demanding a Lokayukta probe against an alleged iron ore <ref> </ref> mining scam worth Rs 5000 crore allegedly committed at ], ]. He also presented on record copy of the note-sheet which was said to be prepared at the orders of then CM ] on June 24, 2002 in which he allegedly ordered the upper secretary, Department of Forest to declare the forest land as revenue land to to allow Pathak's mining firms perform iron ore Mining at the sight. | ||
| ==Illegal mining and stone crushing in the |
==Illegal mining and stone crushing in the Ganga river bed== | ||
| Illegal mining in the ] river bed for stones and sand for construction work has been a long problem in ], Uttarakhand, where it touches the plains for the first time. This is despite the fact that quarrying has been banned in ] area zone covering 140 sq km area in Haridwar.<ref name=tri>{{cite news |title=Looting the Ganga shamelessly |url=http://www.tribuneindia.com/2011/20110616/main5.htm |publisher= ]|date=June 16, 2011 }}</ref> On June 14, Swami Nigamanada, a 34-year old monk who was fasting since February 19, 2011 against illegal mining and ] along the |
Illegal mining in the ] river bed for stones and sand for construction work has been a long problem in ], Uttarakhand, where it touches the plains for the first time. This is despite the fact that quarrying has been banned in ] area zone covering 140 sq km area in Haridwar.<ref name=tri>{{cite news |title=Looting the Ganga shamelessly |url=http://www.tribuneindia.com/2011/20110616/main5.htm |publisher= ]|date=June 16, 2011 }}</ref> On June 14, Swami Nigamanada, a 34-year old monk who was fasting since February 19, 2011 against illegal mining and ] along the Ganga near ], died at the Himalayan Hospital in Jollygrant in Dehradun, after alleged poisoning by stone-crushing mafia.<ref name=tri/><ref> ] June 14, 2011.</ref> His death put spotlight on the activity including intervention by Union Environment minister.<ref>{{cite news |title=Exposing the illegal mining in Haridwar|url=http://www.ndtv.com/article/india/exposing-the-illegal-mining-in-haridwar-112580 |publisher=] |date=June 16, 2011}}</ref><ref>{{cite news |title=Jairam Ramesh tells Uttarakhand CM Nishank to stop illegal mining in Ganga |url=http://articles.economictimes.indiatimes.com/2011-06-18/news/29674323_1_illegal-mining-environment-ministry-environment-minister-jairam-ramesh |publisher=] |date=Jun 18, 2011 }}</ref> | ||
| ==Union government commission to probe illegal mining== | ==Union government commission to probe illegal mining== | ||
Revision as of 06:58, 19 June 2012
Mining scam in India (colloquially Indian mining scam) is a series of widespread scams in various ore-rich states of India, and has generated controversy, which spans encroachment of forest areas, underpayment of government royalties, conflict with tribals regarding land-rights . The spill-over of the effects of legal mining into problems such as Naxalism and the distortion of Indian democracy by mixed political and mining interests, has gained international attention.
Latest scam that has come out is the Coal Mining Scam in the Government has lost Rs 10.7 lakh crore by not Auctioning Coal Blocks says the 110 page CAG Report.
Illegal iron ore mining in Karnataka
Rising global iron-ore prices driven by Chinese demand brought focus to the iron ore rich Bellary region of Karnataka. This iron ore is alleged to have been illegally mined after paying a minuscule royalty to the government. The major regularities involve mines in Bellary, including those of Obulapuram Mining Company owned by G. Karunakara Reddy and G. Janardhana Reddy who are ministers in the Government of Karnataka.
Income Tax Department's investigation on Reddy Brothers
In one of the largest single-day operations in recent times in Karnataka, the officials of the Income Tax Department raided the residential premises belonging to Health Minister B. Sriramulu in Bangalore, and offices and residences of two BJP legislators, who are involved in mining business. The premises belonging to BJP MLA from Koodligi B. Nagendra and BJP MLA from Kampli T.H. Suresh Babu, both considered close to the Reddy ministers, were raided in Bangalore as well as in their home towns . Searches were also conducted in the rooms allotted to Mr. Suresh Babu and Mr. B. Nagendra in the Legislators Home in Bangalore. According to the sources in the IT Department, a large number of documents have been seized, and their bank accounts have been frozen. The raids were said to be conducted at over 50 premises. The raids assume importance in the background of allegations from opposition parties that the ruling BJP is paying off MLAs from other parties to resign from their post. An important aspect of the operation is that it appears to be targeted against close confidants of the Reddy brothers. A large number houses, offices, business establishments, mining and construction firms have been raided by the IT Department. Sources in the Income Tax Department have also indicated that the residences and offices of one of Mr. Reddy’s personal assistants, Ali Khan, and a legal advisor, Raghavacharlu, were also searched by the officials at Bellary, Hospet and Bangalore. The raids were launched simultaneously at many cities including Bangalore, Hospet, Bellary, Hubli, Belgaum by officials of the Karnataka and Goa region.
Income tax sleuths unearthed under-invoicing and tax evasion of around Rs 86 crore by the Obulapuram Mining Company (OMC), run by Karnataka's Reddy brothers and also their trusted confidante and state health minister B Sriramulu.
The scam, that can embarrass Karnataka's BJP government further, is said to have alarmed the top guns in the state. The CBI is investigating illegal mining transactions in Andhra Pradesh. Ministers G Janardhana Reddy, G Karunakar Reddy and Sriramulu have mining business in AP.. The company had evaded Rs 86,42,88,802 during 2007-08.
Official sources said after getting clues to tax evasion by OMC B N Mohan, Sibichen Mathew and G M Belagali of Bangalore (Commissionerate) Central circle under the Directorate General of Income Tax Investigation were assigned to work on the case. They found that the OMC had entered into a MoU with a one-dollar company of Singapore to camouflage the company's income suppression.This report was recorded in the book Let us Share by the Finance Ministry.
Officials found that the one-dollar company, GLA Trading International (GLATI), was established on November 30, 2007, with Janardhana Reddy as one of its directors. GLA, presumed to be named after Janardhana Reddy's wife Gali Laxmi Aruna, has offices in Singapore, Dubai and the British Virgin Islands, which is a `tax haven'.
"OMC's transactions through the MoU with GLATI are convoluted and devised to evade tax payment in India," assessing officers said in the report.
- A comparative study of shipping bills for export with other companies, which are exporting the same grade material, confirmed the malpractice by OMC. According to the report, OMC signed the MoU with GLATI to sell iron ore only to evade tax payment in India.
- For the similar grade of iron ore or ferrous content (FE), OMC had under-invoiced. The per tonne rate of iron ore exported to GLATI ranged between $76.14 and $98.24 as compared to per tonne rate of $144 to $165.22 of other export sales of ore.
- When I-T officials sought explanation from OMC, the Reddys claimed it suppressed sales for developing stronger relationship worldwide with global buyers through GLATI for financial stability against price fluctuations.
- Violating IPC Act, Forest Act, Mines and Mineral Development Act, Corruption Act, criminal conspiracy, cheating, theft, stealing property, mischief, criminal trespass, illegal mining and criminal misconduct
- Reddy's Obulapuram Mining Company (OMC) accused of encroaching 40 hectares forest land in Bellary-Andhra Pradesh reserve forest area for illegal mining, damaging state border demarcation area, blasting Sugulamma Devi temple on border
- * FIR by I-T officials from May 1998 to Dec 2009 relates to boundary disputes and illegal mining activities in Bellary reserve forest of Anantapur district, AP
- * In its lease area of 68.50 hectares in Antharagangamma Konda, OMC shifted boundary pillar by 40 metres, constructed a permanent pillar there to encroach unallotted area for illegal mining. OMC stole minerals in the area, booked for criminal conspiracy, cheating, theft, trespass, violation of Indian Forest Act 1927 and Mines and Minerals Act 1957
- * OMC dispatched 29.32 lakh tonne of iron ore to China between 2003-05, but mined pits and surface area removed were shown in records as less than 40%, indicating illegal export of iron ore
- The Commissioner of Income Tax's report throws light on OMC's illegal mining in Karnataka, exporting ore via Andhra ports along east coast like Vishakhapatnam, Kakinada, even after ban on export of ore was imposed by Karnataka government in 2010-11
- Chapter titled Under Invoicing, Evasion of Taxes and Duties by OMC highlights how Reddy brothers stashed away Rs 215,12,50,357 outside country
- Man-Go Pub Pvt Limited, owned by Reddy, registered in 2004 at Singapore. Purpose of this company was to provide entertainment, food and beverages. In 2007, a special resolution was passed in which company's principal activities were proposed to be changed from restaurant, bars and canteen to general wholesale trade, including general imports and exports
- GJR Holdings International registered in British Virgin Islands and Isle of Man, internationally known tax havens. When Lokayukta initiated inquiry into illegal exports, Janardhana Reddy resigned and ceased to be director of the company with effect from December 30, 2009
- GLA Pet Limited, named after Reddy's wife Gali Lakshmi Aruna, imported iron ore to the tune of 8,52,033 tonne from OMC, Bellary -- the origin of the ore is shown as ports from Karnataka. Report pertaining to Krishnapatnam, Vishakapatnam ports also indicates such exports. OMC exported 8,09,299 MTs (excluding exports from Mangalore) to GLA in 2007-08 and 2008-09. Total underinvoicing in US dollars and INR comes to $52,341,292, corresponding to Rs 215,12,50,387.
- * Reddy ran well-oiled, sophisticated risk-protection system on returns for illegal miners, and provided lucrative returns for transporters and politicians. Risk protection was primarily provided by Reddy's confidantes Swastik Nagaraj (K V Nagaraj) and Karapudi Mahesh through their firms Safia Minerals and Sri Manjunatheshwara Minerals respectively
- This explanation was considered inept by the investigating agency. According to investigators, it's difficult to believe a business house like the Reddys would enter into such an MoU with an offshore company to secure financial stability against price fluctuations from a one dollar company of Singapore and that too without any knowledge of its business, its board of directors and its standing in the line of business. The OMC has taken the issue to an appellate authority.
Interim Lokayukta report of December 2008
A report published by the LokAyukta uncovered major violations and systemic corruption in mining in Bellary, including in the allowed geography, encroachment of forest land, massive underpayment of state mining royalties relative to the market price of iron ore and systematic starvation of government mining entities. Justice N. Santosh Hegde resigned from the Lokayukta position on 23 June 2010 citing inability to be effective in his anti-corruption mandate owing to a non-cooperative Government of Karnataka In January 2010 Mr Kharge questioned the governoment about transfer of Dileepkumar PCCF who refused to sign the report but Government brought S Nagaraja as PCCF who signed the report.
Collusion of officials and politicians in permitting illegal mining
The guidelines under the Central and the state enactments, call for a sketch of the mining area when a mining lease is applied for. It was found by the Lokayukta that sometimes the actual mining areas are not related to the sketch given with the applications without officials crosschecking them. Further mining applicants falsely claim a prohibited forest area as a revenue area. Finally the actual area of the mine is much bigger than the claimed area. The Indian Bureau of Mines rules which control the type of mining, allow a maximum mining depth six metres to prevent environmental degradation. But miners have flouted this rule to over-extract iron-ore. For example, if they are allowed to take 100 metric tones, mines take 1,000 metric tonnes. Officials at road check posts reportedly collude in a massive under-counting of lorries and trucks transporting the iron-ore from the Bellary mines to the ports. News reports suggest that only 200 trucks are reported as against 4000 plying everyday.
Underpayment of royalties to state
There is a huge difference in the market price of the ore and the royalty specified by the government as well as faulty measurement mechanisms of amount of ore extracted. It was found that 35 lakh (3.5 Million) tonnes of ore were illegally exported without paying a rupee of royalty to the exchequer, resulting in a loss of about Rs 16085 crores. With ore prices of USD 100-120 per ton, 3.5 Million tonnes adds up to about 350-4000 Million USD. There are proposals to link the royalties to the market price of iron-ore. There is also a proposal by the ministry of Environment and Forests to levy a tax.
Environmental damage
According to the Lok Ayukta Report, there have been severe ecological changes due to illegal mining. Certain species of animals, like the sloth bear, that in the Bellary region have disappeared. Medicinal plants from the area do not grow anymore. The entire system of rain has changed in the district of Bellary. It is reported that the entire area surrounding the mining area is denuded of greenery and has no agricultural activity.
Belekeri port scandal
Related is the Belekeri port scam where illegally mined ore which had been seized was surreptitiously exported from the port. Karnataka Chief Minister Yeddyurappa admitted to an illegal iron-ore export racket at Belekeri Port involving 35 lakh metric tonnes of iron ore.
Related road damage, accidents and loss of lives
The lack of effective regulation in the mining and transport of iron ore has adversely impacted road safety. Overloaded Trucks carrying ore have caused hundreds of fatal accidents on the roadways leading to ports such as Belekeri and damaged national highways in the region.
Recommendation to ban iron-ore exports
The Indian government (steel ministry and law ministry) is considering a ban on exports of iron ore and limit mining only to captive iron and steel production units. This has been opposed by the mining ministry citing massive loss of employment.
Lokayukta Report of July 2011
The Lokayukta Report on illegal mining in Karnataka details the methods in which miners, government officials and ministers colluded to defraud the government of mining revenues. The report details the complete breakdown of democratic governance in the bellary area and uncovers the "zero risk system", a protection and extortion racket, masterminded by G. Janardhana Reddy. The report describes the illegal money transfers to foreign companies and tax shelters by mining entities such as Obulapuram Mining Company, Associated Mining Company, GLA Trading and GJR Holdings owned by the Reddy Brothers. The report tells about illegal mining, bureaucrats-politicians-businessman nexus. Even banks and public sector companies also participated in the loot. There are more than 100 names involved in illegal operation. NDMC, Adani enterprise, JSW Steel are some major name in fraud list. Charges against these companies are illegal movement of iron ore from mining yard without permits and without paying royalties, forest encroachment, mining lease violations, overloading of trucks and sandry violation etc. The iron ore was illegally exported to china through ports of southern India and payment is made through more than 4000 banks account. Damage to environment can not be calculated.This report was prepared mainly from the Income Tax Commissionerate of Central Circle.
Illegal mining in the Aravali Range
Illegal mining activity has been reported in the Aravali Range.
Bauxite and coal mining in Orissa
Bauxite mining by Vedanta Resources in tribal areas of Orissa have led to conflicts in land rights. Coal mining has run into trouble as well in Angul district over land issues.
Iron ore mining in Madhya Pradesh
On 14 November 2011 person known as Rajendra Dixit registered a complaint at Madhya Pradesh Lokayukta Office against Indian National Congress MLA Sanjay Pathak's mining firms , demanding a Lokayukta probe against an alleged iron ore mining scam worth Rs 5000 crore allegedly committed at Sihora, Jabalpur. He also presented on record copy of the note-sheet which was said to be prepared at the orders of then CM Digvijay Singh on June 24, 2002 in which he allegedly ordered the upper secretary, Department of Forest to declare the forest land as revenue land to to allow Pathak's mining firms perform iron ore Mining at the sight.
Illegal mining and stone crushing in the Ganga river bed
Illegal mining in the Ganga river bed for stones and sand for construction work has been a long problem in Haridwar district, Uttarakhand, where it touches the plains for the first time. This is despite the fact that quarrying has been banned in Kumbh Mela area zone covering 140 sq km area in Haridwar. On June 14, Swami Nigamanada, a 34-year old monk who was fasting since February 19, 2011 against illegal mining and stone crushing along the Ganga near Haridwar, died at the Himalayan Hospital in Jollygrant in Dehradun, after alleged poisoning by stone-crushing mafia. His death put spotlight on the activity including intervention by Union Environment minister.
Union government commission to probe illegal mining
The mining ministry of the union government has announced a special commission to investigate the various cases of illegal mining in India. The union mining minister, B. K. Handique, announced that the investigation spanning Karnataka, Orissa and Jharkhand, will submit a report in 6 months.
References
- "Fire in the Hole: How India's economic rise turned an obscure communist revolt into a raging resource war". Foreign Policy Magazine. Retrieved 2010-08-19.
- Yardley, Jim (2010-08-18). "Despite Swirl of Scandals, Indian Mining Bosses Thrive". The New York Times. Retrieved 2010-08-19.
- Coal Mining Scam : Government lost Rs 10.7 lakh crore by not Auctioning Coal Blocks: CAG Report
- "Reddys have the last laugh, national mines regulator has both hands tied". Indian Express. Retrieved 2010-06-24.
- "Complete report of Lokayukta Santosh Hegde on Karnataka Mining (Dec 2008)". Indianleaks.in.
- "PART I: Complete report of Lokayukta Santosh Hegde on Karnataka Mining (Dec 2008, PDF)" (PDF). Indianleaks.in.
- "REPORT ON ILLEGAL MINING ACTIVITIES IN BELLARY, HOSPET AND SANDUR REGION (U.V. Singh, Conservator of Forests)(Dec 2008)". Indianleaks.in.
- "Santosh Hegde Interview: 'Mining Lease Is Used As James Bond's Gun'". Tehelka.
- "Santosh Hegde Full Interview: 'Mining Lease Is Used As James Bond's Gun'". Tehelka.
- "Illegal mining: Lokayukta slams Government". Chennai, India: The Hindu. 2009-07-14. Retrieved 2009-09-07.
- "Hegde: 'I was helpless in protecting an honest officer'". SIFY.
- "Lokayukta indicts BSY govt, quits". Deccan Herald. Retrieved 2010-06-24.
- "Palemar says he meant no disrespect to the Lokayukta". Chennai, India: The Hindu. 2010-06-25.
- ^ "Santosh Hegde Interview by Sekhar Gupta: 'They don't want the lokayukta to proceed because these mining permits were given during the tenures of JD-S, Congress and BJP'". Indian Express.
- "Bellary to Belekeri: Checks don't balance". Deccan Chronicle.
- "Mines of scandal: The Karnataka Lokayukta's report emphasises that illegal mining has caused severe loss to the State exchequer". Chennai, India: The Hindu.
- "Mines of scandal: India mulls price-based royalty for iron ore - sources". Reuters. 2008-01-11.
- "Ramesh calls for environmental levy from mining". Indian Express.
- "Yeddyurappa admits iron ore racket". Indian Express.
- "Cong 'backs' Hegde and alleges BJP-mafia nexus". India Today.
- "Ore-laden trucks turn highways into 'accident zones'". The Deccan Herald.
- "State of the environment report: Mining and Quarrying" (PDF). Department of Ecology and Environment, Govt. of Karnataka.
- "Puttur: Shiradi Ghat Woes – Concreting Proposal Languishing at Delhi". daijiworld.
- "Law ministry suggests a ban on export of iron ore". Indian Express.
- "India seeks ban on iron exports". Financial Times.
- Roy, Rajesh (2010-07-02). "India Ministry Wants Ban on Iron Ore Exports". Wall Street Journal.
- "'Banning ore export will retard growth'". Indian Express.
- "Iron ore export ban will leave thousands jobless: Handique". The Hindu.
- "Download Lokayukta report on illegal mining". Deccan Herald.
- "Lokayukta report on illegal mining (PDF)" (PDF). Deccan Herald.
- "Karnataka Lokayukta report on illegal mining". The Hindu.
- "Karnataka Lokayukta along with the Income Tax Department and UV Singh report on illegal mining (PDF)" (PDF). The Hindu.
- "Report uncovers govt-miners nexus". Deccan Herald.
- "An ecosystem of fraud". The Hindu.
- "Report details Reddys' rule over 'Republic of Bellary'". The Hindu.
- "The 'zero risk system' of illegal mining". Deccan Herald.
- "Reddy firm broke many laws". Deccan Herald.
- "2 Reddys, friend Ramulu: 'tax fraud, threats, illegal mining'". Indian Express.
- "Illegal mining in Aravalis continues despite ban". Indian Express.
- "India Sets Up New Panel on Bauxite Mining in Orissa". Business Week/Bloomberg.
- "Eight Orissa coal mines face closure". SIFY.
- 5000 crore mining scam
- ^ "Looting the Ganga shamelessly". The Tribune. June 16, 2011.
- Swami Nigamananda, fasting to save Ganga, dies NDTV June 14, 2011.
- "Exposing the illegal mining in Haridwar". NDTV. June 16, 2011.
- "Jairam Ramesh tells Uttarakhand CM Nishank to stop illegal mining in Ganga". Economic Times. Jun 18, 2011.
- "Commission to probe illegal mining". The Hindu.
- "Centre sets up commission to probe legal mining". Deccan Herald.
- "Interim report on illegal mining in 6 months". Deccan Herald.
External links
- Ministry of Mines, Government of India
- Mining related news clippings from August 2010
- A photo essay on India's hidden war - Foreign Policy Magazine
- New York Times Slideshow - India’s Mining Magnates
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