Game Change in Bellary

A not so Happy birthday for Janardhan Reddy

Prince Thomas
Updated: Jan 13, 2012 02:01:29 PM UTC

Despite the seemingly royal linkages of my first name, I like to see life from the back bench. While studying it helped when lectures were unending but later I realized it also worked as a corporate reporter. It gives a clear view of both the performer and the viewer; of the 360 degree perspective and the minute detail. Now while tracking the world of business for the pages of Forbes India as Senior Assistant Editor, I will use this space to share what I observe from that rear seat.

January 11th was Janardhan Reddy's 46th birthday. Last year, the day was marked by an elaborate puja, public donations, a lunch feast and all-night celebrations in his home town Bellary. This year though, the man who within a decade transformed himself from an unknown BJP party worker to a mining magnate and then a state minister, had a quieter day. He distributed sweets to officials and fellow inmates at the Chanchalguda prison near Hyderabad and received family members. It is not known if his wife or in-laws brought any gifts. But Reddy himself would have wished that the gift would come next day in the form of a bail. But to his dismay the special CBI court on January 12th extended the four-month stint of the second of the three infamous Reddy brothers, by another fortnight.

Come January 15th and things could get worse for Reddys and ironically, the situation could improve for many others in the Bellary mining industry.  The CEC, or Central Empowered Committee appointed by the Supreme Court, will submit its report and recommendations to the Apex panel on how to save the Karnataka mining industry. Much of the mining in the state is concentrated in and around Bellary. Many of the recommendations might turn into Supreme Court orders, at its hearing five days later. So how could Reddy lose while others gain?

One of the possible recommendations of the CEC would be to categorize each iron ore mine lease in the state in three grades – A, B and C. Those miners who find their lease under Grade A would be rewarded for keeping on the safer side of law, even amidst the massive plundering of the last decade. These miners would be able to immediately resume mining. Those in B would need to pay penalties for “minor transgressions’ before being allowed to resume operations.

The prospect is bleakest for those who find themselves in C. Not only would be the penalties be huge, but these miners could possibly face, at the least, a partial ban.  After the CEC in its earlier report in 2011 indicted Reddy for “illegalities” in their operations, his firm Associated Mining Company is the current favourite to face the stick.

CEC is expected to recommend more measures, including extending e-auctions of ore for some more time (ever since the ban in mining in Karnataka, ore is being sold only through e-auction to improve transparency), this will impact Reddy directly.

More indications of eroding influence of Reddy and his family in Bellary was apparent earlier this week when they were completely absent from a meeting of the local miners called by the Deputy Commissioner.  The meeting, which was held in a popular hotel in Bellary, was attended by officials of research institute ICFRE that has made environmental impact studies in the area. “They were encouraging and gave enough indications of mining resuming in the state,” says an official from one of the bigger mining companies who attended the meeting.

But for someone who was in the middle of all the action in Bellary for the past 10 years, the signs are the most discouraging. Maybe Reddy’s family could make another trip to Tirupati for divine intervention. A bigger offering than the previous one – a Rs 45 crore diamond-studded gold crown – might help.

The thoughts and opinions shared here are of the author.

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