Bangalore: Karnataka Chief Minister B S Yeddyurappa was in deep trouble on Thursday with the Lokayukta indicting him and his ministers in a "huge racket" of illegal mining and found that his sons got kickbacks of Rs 30 crores from a mining firm.

Retired Supreme Court Judge and Lokayukta Santosh N Hegde said there was "substantive" evidence against the Chief Minister and others in illegal mining that cost the exchequer Rs 1,800 crores.

Recommending a further probe into illegal mining, he said a trust run by one of Yeddyurappa's sons got Rs 10 crore as donation from a mining company which gave another Rs 20 crores for purchase of land.

"Donations to the Chief Minister's trust involved collateral interest," he said.

Hegde, who is likely to sumbit his report to the government on Monday, squarely held Yeddyurappa responsible for the happenings in mineral-rich Bellary where there is a "mafia-like situation" with every official being involved.

Recommending a further probe into the issue, the Lokayukta, who has prepared a 4,000-page report, came down heavily on the Reddy brothers--G Janardhana Reddy and G Karunakar Reddy--both ministers in the BJP  government and mining barons in Bellary district and also their aide and another minister Sriramulu.

"They have created a new system altogether by which they could literally bleed other mining companies", Hegde told.

The report has also indicted former Chief Minister and JDS leader H D Kumaraswamy, another Minister of Yeddyurappa cabinet, V Somanna, Congress Rajya Sabha member Anil Lad and BJP MLA from Kudligi in Bellary district Nagendra.

"Everybody who has been in power in Karnataka has tried to put a finger in the till," he said implying that previous governments were also involved in the scam.

Adding to the Yeddyurappa's discomfiture, the Karnataka High Court today dismissed all petitons filed by his son-in-law, sons and others against a lower court order taking congnisance of offences made out in a petition filed against the Chief Minister and others in alleged land scams.

The day's developments came in handy for Congress and other Opposition parties to mount pressure on Yeddyurappa demanding his immediate resignation on the ground that he has lost all his Constitutional and moral right to continue in office.

The Lokayukta described the illegal mining scam as huge. "In the time period of 14 months, it is more than Rs 1800 crore. The time period is from March 2009 to May 2010. It is the loss to the state exchequer. It is loss to the state".

The report has given substantive evidence whether it is the Chief Minister, Ministers and miners in the illegal mining. "It's a voluminous evidence", he said, adding, the report runs into 4000-5000 pages.

"It's a huge racket. As a matter of fact, the Chief Minister is responsible for what's happening in (mineral rich district of) Bellary because of the fact that the Minister in Charge (of the district G Janardhana Reddy) is owner of a mining company (Obalapuram Mining Company) and a mafia-like situation is created with every official being involved," Hegde said.

Hegde said the leak of the report on Thursday would not have any impact as it would not question its validity.

The Lokayukta said his telephone has been tapped and the leak could have been from there.

He said after reports of alleged bugging in the office of Union Finance Minister Pranab Mukherjee, he had asked a professional to carry out a check in his office.

"(The professional) told me that my telephone has been tapped. Every thing was being recorded from two sources," he said, adding "I have changed my SIM number".

Hegde said the loss to the exchequer could be more than Rs.1,800 core. "We have not got the figures for earlier years," he said.

Asked if there were instances of money got by illegal mining being parked in tax havens overseas, Hegde said: "We have some instances.....this happened. We have recommended that Enforcement Directorate should enquire into it (affairs of Obalapuram Mining Company)".

Obalapuram Mining company is owned by Janaradhana Reddy and his family, with brother and Minister G Karuanakara Reddy and another Minister from Bellary, B Sriramulu being partners.

Hegde said there are instances of this company where the money earned against iron ore exports not being brought back to India (indicating that money was parked overseas).

Hegde said the Obalapuram Mining Company has evolved a system of "zero risk".

Hegde said more than 500 officials, either by name or by designation, have been named in the report on illegal mining.

The Lokayukta said he is "totally convinced" that the Government would not act upon his second and final report. "They did not implement the previous one," Hegde recalled.

Cong-BJP engage in slugfest over report


Congress and BJP were on Thursday engaged in a slugfest in the wake of the Karnataka Lokayukta indicting B S Yeddyurappa and his ministerial colleagues in the illegal mining scam and demands for resignation of the Chief Minister of the southern state getting louder.

While the ruling party alleged the involvememt of BJP's central leadership in illegal mining in Karnataka and demanded the Chief Minister's resignation, the Opposition party hit back, saying the Congress should first take action against those named in the Shunglu Committee and Delhi Lokayukta's report.

"Entire Karnataka government and the top leadership of the BJP is involved in illegal mining," party spokesperson Shakeel Ahmed said, adding that the Chief Minister should immediately resign from his post.

Reacting to it, BJP spokesperson Prakash Javadekar said, "The Shunglu Committee had indicted the Sheila Dikshit Government in the Commonwealth Games and the Delhi Lokayukta had recommended to the President that action should be taken against her minister Rajkumar Chauhan in the Tivoli Garden case. Nothing has been done in these two cases. Congress should first respond to this."

The Congress spokesperson, however, sought to make a distinction between the reports by Karnataka and Delhi Lokayuktas saying "it is a matter of debate as to what is the jurisdiction of a Lokayukta. Whether a Lokayukta can comment on the promise of a political leader made in its  election manifesto or the people."

When told that the report even mentions the name of a Congress MP Anil Lad, Ahmed said, "Law will take its own course. Congress has always taken action in corruption issues. But he is only an MP, whereas Chief Minister and ministers of the state government have been indicted in the report. They should resign first."

On BJP's contention that it was too early to react and that it would wait for the Lokayukta's report to be made public, the Congress spokesperson said the opposition party had made a hue and cry over the CAG report even before it was tabled in Parliament.

Repeatedly asked about Congress stand on its MP's name figuring in the report, Ahmed said, "Whatever action is necessary the party will do the needful after the report comes."

Daring the BJP to remove Yeddyurappa, he alleged that while one section of the central leadership of the Opposition party was patronising Yeddyurappa, the other had given his blessings to Reddy brothers.

Plea filed by Yeddy's son-in-law, others dismissed

The Karnataka High Court on Thursday dismissed all five petitions filed by Chief Minister B S
Yeddyurappa's son-in-law and others praying for quashing of a lower court order taking cognisance of offences made out against Yeddyurappa, him and others over alleged land scams.

Justice K N Keshavanarayana dismissed the petitions filed by son-in-law Sohan Kumar, Yeddyurappa's sons B Y Raghavendra, a Lok Sabha member, and B Y Vijayendra, Dhavalagiri Developers, a firm run by the two brothers, and a beneficiary Akka Mahadevi.

The court observed that the petitions were "highly premature and have no locus standi to question the correctness of the (lower court's) order" and that the order was in "accordance with law and did not suffer from any "legal infirmity, lacunae".

Quoting the Supreme Court judgement in the Vineet Narayan case, the judge said the verdict had cited seven principles, including probity in public life, running a government efficiently and in an exemplary manner, which needed to be adhered to by all public servants, including the Chief Minister for a healthy society.

JPN/Agencies