CBI arrests Janardhana Reddy; Rs4.5 crore cash, gold seized

Mining baron and former Karnataka Minister G Janardhan Reddy and Managing Director of Obalapuram Mining Company BV Srinivas Reddy were Monday arrested by CBI after searches at their premises allegedly led to seizure of over 30 kg of gold and more than Rs4.5 crore in cash.

A 15-member CBI team from Hyderabad conducted searches at Janardhana Reddy's house and claimed to have seized Rs three crore in cash and over 30 kgs of gold, official sources alleged.

A sum of Rs1.5 crore was also seized from the residence of Reddy's brother-in-law Srinivasa Reddy, who is also the Managing Director of the company owned by the Reddy family, they claimed.

"Janardhana Reddy and Srinivasa Reddy have been arrested under Prevention of Corruption Act and we are taking them to Hyderabad", CBI DIG PV Lakshminarayana, who is heading the team, told reporters in Bellary.

The arrests came in connection with the cases filed by CBI against the Reddy brothers in Andhra Pradesh, the sources said, adding both were expected to be produced before a special CBI court in Hyderabad later in the day.

Even as the CBI team escorted the Reddys to Hyderabad, the agency continued searches at Janardhana Reddy's residence in Bellary and Bangalore.

A team questioned Aruna Lakshmi, wife of Janardhana Reddy in Bellary, and another conducted searches at his residence in Bangalore, they said.

The CBI action comes a day after the Reddy brothers' close associate and former minister B Sreeramulu quit his assembly membership protesting against their being kept out of the ministry following their indictment by a Lok Ayukta report on illegal mining.

The CBI had registered the case against the company on December 7, 2009 at the request of Andhra Pradesh Government in the wake of allegations of illegal mining and irregularities in allotment of mining leases to OMC in Obulapuram and Malpanagudi villages of Anantapur district.

The Andhra Pradesh High Court had granted interim stay on the probe on December 14, 2009. The stay was vacated in December, 2010 after which the agency started its probe.

"After vacation of stay, the CBI Hyderabad started the investigation of the case and till now around 1530 documents, 112 iron ore samples had been collected and around 85 witnesses and suspects have been examined," a CBI spokesperson said in New Delhi.

Meanwhile, supporters of Janardhana Reddy staged protest in parts of Bellary against his arrest and raised anti-Congress slogans.

Police said security has been beefed up in the city.

About 65 mining companies including OMC are under the CBI scanner. There are allegations of irregularities in the mining activities of OMC which is owned by the brothers - G Karunakara Reddy, G Janardhana Reddy, G Somashekara Reddy.

OMC has also been accused of transporting ore in far excess of actual production, irregularities in granting of leases, encroaching upon mining areas belonging to Karnataka by crossing the inter-State boundaries.

Reddy, who was the Tourism and Infrastructure Development Minister in the previous BS Yeddyurappa government, was among those indicted by the Lok Ayukta report on illegal mining submitted to the Government on July 27.