No Surprise, Money Still Counts in Karnataka

Assembly poll candidates seem to be either freshly minted millionaires or those who have reported a massive increase in assets over the past five years

As the election tempo rises in Karnataka with the approach of its Assembly polls on 5 May, dirty money—whose epicentre was Bellary, where illegal mining went on unchecked under the patronage of the Reddy brothers —is, for once, not in the forefront. Yet the candidates in the fray seem to be either freshly minted millionaires or members of the old guard who have reported a massive increase in their fortunes over the past five years.

When the Bharatiya Janata Party won a mandate in May 2008, the Bellary brothers ensured that the party, which was falling a couple short of the halfway mark, got the required numbers. Led by Gali Janardhana Reddy, who is currently in jail, the three brothers—Janardhana, Karunakara and Somashekara—are believed to have tilted the scales firmly in favour of the BJP by paying crores of rupees in cash to independents for their support. They are also said to have ensured the success of ‘Operation Lotus’, which saw victorious MLAs from the Congress and Janata Dal-Secular resign and win by-elections on BJP tickets.

No one in the BJP now wants to recall those hi-flying days when the Reddy brothers were all-powerful. “We have cleansed the BJP of these rotten elements. Give the party another chance,” says Deputy Chief Minister R Ashok who climbed the rungs quickly after nearly 15 ministers, including then Chief Minister BS Yeddyurappa, had to resign after corruption charges were levelled at him.

During the elections in May 2008, realtors and miners reportedly paid in excess of Rs 20 crore to get tickets. Election Commission officials seized unaccounted for cash, gifts and liquor worth more than Rs 100 crore, a first among Assembly polls in the country. The fear of big money led to all parties agreeing on a single phase poll this time. The state’s Chief Electoral Officer, Anil Kumar Jha, heaves a sigh of relief that seizures have been less than anticipated. “We have been very strict in all respects. But, candidates are becoming cleverer by the day.” He expects cash and liquor seizures to go up as the polling date nears.

In Bellary today, Deputy Commissioner Adithya Amalan Biswas is a feared man. Relentless about putting all politicians indicted in the mining scam in their place, Biswas has built a reputation for himself. “He knows the Bellary district inside out, as he had served as Assistant Commissioner, and is known to be a no-nonsense IAS officer,” says Jha. During the historic 1999 election, when the BJP’s Sushma Swaraj took on Congress President Sonia Gandhi on the ‘foreigner’ issue and lost, Biswas was witness to the rise of the Reddy brothers, who worked hard for Swaraj’s campaign.

But all this has not halted the rise of new millionaires. While there were nearly 45 candidates with real estate riches and nearly 30 with mining riches in 2008, that number now is around 75 for real estate players and just 10 from the state’s once-booming mining sector.

The richest candidate, Priya Krishna of the Congress, has declared wealth of Rs 910 crore. Krishna’s father M Krishnappa is a real estate tycoon whose declared assets are modest compared to his son’s. Both are contesting from Bangalore city.

The second wealthiest, Anil Lad, also of the Congress, is a Bellary mining tycoon. The helicopter and Audi mentioned in his affidavit from the previous election are missing from the current one, replaced by a newly-acquired Bentley, and though mining has been on a downturn, his reported wealth has nevertheless gone up from Rs 177.99 crore in 2008 to Rs 288.99 crore now.

The third wealthiest is a little-known chartered accountant from Tumkur, Nagaraj Yaluchavadi, also contesting on a Congress ticket, who has declared in his affidavit that he is worth Rs 236.38 crore. Others on the rich list are Prabhakar Reddy, JDS, Bangalore, with Rs 233.88 crore; Santhosh Lad, a Congress miner worth Rs 186.40 crore; Anand Singh, a BJP candidate in Bellary with Rs 104.53 crore; Abdul Wahab, a Congress candidate with assets worth Rs 71.04 crore; and Janardhana Reddy’s man Friday Sriramulu, who now heads the BSR Congress and is worth Rs 43.67 crore.

A Bangalore real estate tycoon and BJP MLA Nandish Reddy has declared his wealth at Rs 118.92 crore, up from the Rs 38 crore he had declared five years ago. The BJP ’s rich list also includes Uday Garudachar, with Rs 95.74 crore in assets, J Krishna Palemar from Mangalore with Rs 69.25 crore, and Sathish Reddy in Bangalore with Rs 41.81 crore. The JDS’s first family too does not lag too far behind. The husband-wife combination of JDS state president HD Kumaraswamy and his wife Anita Kumaraswamy, both of whom are contesting the polls, have declared combined assets worth Rs 137.36 crore. Anita, who owns a television network, is the richest woman candidate in the fray as her assets alone total Rs 118.83 crore. Kumaraswamy’s brother HD Revanna has declared a total wealth of Rs 23.67 crore.

Karnataka Janata Paksha president and former BJP CM BS Yeddyurappa, who is facing corruption charges with respect to mining and real estate deals allegedly carried out by him and his family members, has declared total assets of Rs 5.83 crore.

Janardhana Reddy’s meteoric rise as a mining magnate who used his political power to run a parallel administration in Bellary is a well known story, as is his fall. He was the poster boy of the BJP, with his gaudy, expensive attire, private gunmen, choppers, hi-end luxury cars, palatial bungalows, huge unaccounted-for wealth (as the Lokayukta, Justice Santosh Hegde, alleged in his mining report) and political acumen that partly bank-rolled the BJP to power in May 2008.

The brothers allegedly made their money through rampant illegal mining and by forcing mine owners to sign ‘raising contracts’ according to which money had to be paid to the brothers for lifting the mined ore. Their diktat was seldom questioned as officials were hand-in-glove with the Reddys. The brothers fed off the 2008 Beijing Olympics construction frenzy and made millions. Their sudden fall came after the Karnataka Lokayukta published a detailed report in 2010 on their mining activities. The report prompted the Supreme Court to appoint an Empowered Committee, which halted all mining activity in the state—partially re-allowed just last month.

There are serious allegations that the Reddy brothers transferred their gains to companies owned by then Andhra Pradesh Chief Minister YS Rajasekhara Reddy’s son Jaganmohan Reddy, in exchange for YSR turning a blind eye to their illegal activities in the neighbouring state where the brothers had mines. The CBI, which is probing the case, has filed a chargesheet saying that YSR’s renewal of an expired lease led to Janardhana Reddy’s Obulapuram Mining Company in Anantpur encroaching upon forests and other mines, and flouting inter-state boundaries. Profits from this illegal mining were, through a circuitous route, allegedly invested back in companies owned by Jagan.

The Reddy brothers also signed a joint business deal with the Andhra Reddys in 2007-08 when their company, Brahmani Steel Industries, was allotted land in the backward Kadapa district of Andhra Pradesh. According to the plan, Janardhana Reddy was granted 10,760 acres in Kadapa by the YSR administration in order to set up a steel plant in which Jagan also had a stake. That land allocation was cancelled by the AP government this week, as the factory still has not come up.

A preliminary inquiry by the Supreme Court’s Central Empowered Committee in November 2010 revealed that the Reddy brothers of Bellary had exported 19.7 million tonnes of iron ore, worth Rs 5,308 crore, mined from encroached forests and non-leased areas in Andhra Pradesh, with clandestine support of the YSR government.

It is now almost two years since Janardhana Reddy has been in jail. His brother Somashekara has joined their erstwhile partner B Sriramulu’s BSR Party, while the third brother Karunakara has decided to contest not from Bellary town, but from some other constituency in the district. Their money and influence may have diminished, but the rise of new millionaires has not done any good to Karnataka’s image as a corrupt state.

electionKarnatakamoney