Former senior mines manager of Deccan Mining Syndicate claims that malpractices followed by the company cost the state exchequer lost about Rs 3,165 crore in 11 years
A former employee of the Deccan Mining Syndicate (DMS) made a shocking revelation and exposed several hidden facts that prove that the state exchequer has lost approximately Rs 3,165 crore as a result of malpractices followed by the company. Former DMS senior mines manager V Anjaneya (63), who worked at the company for four years (1998 to 2002), said in an exclusive with MiD DAY that he had witnessed the company indulging in malpractices. Now that the Lokayukta has blown the lid of the case open, Anjaneya voluntarily approached the CBI to act as their approver since he knew all the practices followed by the company.
Whistleblower: Former employee of Deccan Mining Syndicate V Anjaneya exposes the huge mining racket by volunteering to be approver for the CBI. Pic/ Satish Badiger
During the early 1990s, DMS had encroached on government land and begun excavating in the area falling under the National Mineral Development Corporation and had been extracting over 3,000 tonnes of iron ore on a daily basis. Though this was a major violation, their owner, SM Jain had strong political connections, and they got away with it. Furthermore, the royalty for material then was only Rs 17 per tonne and DMS had printed fake state permits, which they had been issuing for over four years.
Going by the calculations (daily produce of 3,000 tonnes, royalty charges Rs 17 per tonne), they made around Rs 51,000 profit in a single day by avoiding paying royalty to the government. The company had been selling produced material to Metals and Mineral Trading Corporation (MMTC), Orient Goa Private Limited, Kirloskar Cerro Company and steel-giant plant Jindal. They had been transporting iron ore through railways, via the Swamyhalli Railway Station and Ranjitpara Railway Station.
Paperwork twist Regarding the company printing and issuing fake state permits for over four years, the former employee said, "The state had set royalty for per tonne of ore at Rs 17. Since the produce extracted and exported by the company was huge, they started printing and issuing fake permits to avoid paying royalty."
He added that Sub Inspector of Sandur, Tejasvi had raided the DMS office at Bellary in 2003 after learning about this scam and recovered a huge stack of fake permit books. However, SM Jain and his son Rajendra Jain feigned illness and got themselves admitted in hospital and later managed to secure anticipatory bail.
"Since SM Jain was an AICC member and had strong political backing, he managed to hush up the matter," said Anjaneya.
Erasing all data On September 23 this year, the Supreme Court ordered the CBI to probe into the alleged illegal mining in Karnataka by Janardhana Reddy's company - Associated Mining Company and the Deccan Mining Syndicate owned by SM Jain.
"The day the SC passed this order, DMS MD Rajendra Jain's brother in law Ritesh Jain hired a technician from Bangalore and took him along to the company's office and erased the data on the computer hard disks, which held all the records of their misdeeds, and then shifted the data to a confidential spot in Bangalore," Anjaneya alleged.
He further alleges that Rajendra Jain has several properties in his name across the state and in Mumbai, Pune and Surat. "He owns a hospital on Mysore Road, three godowns in Koramangala, two houses in Vasanth Nagar, the Kalpataru Apartments on Race Course Road and more. He also has properties under the names of close aides Ashok Salecha, Ramesh Jain and Ritesh Jain," he said.
Masked clues Further, to create confusion and to not let anyone know how much land they had encroached, Anjaneya alleges that DMS blasted the tri-junction point. "The tri-junction point is basically a boundary near mining areas. They blasted this point in April 2000, to fuel confusion amongst authorities," he added. Further, in the year 2009, DMS entered into a joint partnership agreement with Janardhana Reddy.
"No one knows the nature of this partnership. However, it is widely rumoured that it is a 50-50 partnership. After Reddy joined hands with Jain, the company started extracting 1,000 more tonnes of ore on a daily basis (making the daily extracted produce 4,000 tonnes from the encroached land).
This was then exported under the name of Associated Mining Company, belonging to G Aruna Lakshmi, Janardhana Reddy's wife. Anjaneya now awaits the CBI probe and is willing to share all documented proof backing his statements," said Anjaneya.
DMS Profile Deccan Mining Syndicate was formed in 1966 by a graduate from Xavier's College, Calcutta - SM Jain. Over the years he expanded his business and came to be known as a mining baron in Karnataka. The office has its head office at Bangalore and the corporate office at Bellary. DMS is one of the leading producers and exporters of Iron ore to Japan, China and South Korea.
After SM Jain's death in 2002, his son Rajendran Jain took over as MD. The company entered into a joint partnership agreement with G Janardhana Reddy, in 2009. No one till date knows the nature of this agreement, but many close to the MD claim that this is a 50-50 partnership.
Grand scam 1998 - 2009 * Total loss Rs 60.51 lakh per day for 11 years
Since Janardhana joined 2009-mid-2011 * Royalty cost: Rs 70 per tonne * Iron-ore cost: Rs 2,000 per tonne local approximate value given by Karnataka * Department of Mines and Geology * Alleged illegal extraction: 4,000 tonnes per day