Bangalore: The Lokayukta report on illegal mining on Wednesday strongly indicted Karnataka Chief Minister B S Yeddyruappa, Reddy brothers and various others and recommended their prosecution under Prevention of Corruption Act and other laws.

In damning evidence against the Chief Minister, the Lokayukta headed by former Supreme Court judge Justice Santosh Hegde found that a mining company had donated Rs 10 crore to a trust managed by his family members which also sold a piece of land to a mining company for Rs 20 crore far above the guidance value of Rs 1.4 crore.

After submitting the report running into 25,228 pages including annexures, Hegde told a press conference that he has named Chief Minister Yeddyruppa, former Chief Minister and
JDS leader H D Kumaraswamy, Reddy brothers (who are ministers and mining magnates), their camp follower and another minister H Sriramulu, Congress MP Anil Lad's wife and over 600 officials in the mining racket that cost the exchequer Rs 16,085 crore between 2006 and 2010.

"Having come to the conclusion that there is as a matter of fact an offence made under the Prevention of Corruption Act I have made a recommendation to the Governor to take further action," Hegde said in respect of the donation made to the trust run by the Chief Minister's family members.

At another point, he said, "I have made a recommendation for prosecuting everybody. I have stated this to the Governor. It is for him to act."

To a question, he shot back, "Action under Prevention of Corruption Act should be taken. What else?."

The report castigated the BJP government, which is in power since May 2008, for its failure to check irregularities and illegalities in mining in the state.

"The enquiry has found large scale involvement of officials, powerful people both in the Administration as well as in the ground level," said Hegde whose main report runs into 943 pages.

Hegde said in the course of investigations they found that a company dealing in iron ore donated Rs 10 crore to the Trust run by family members of the Chief Minister.

From the Trust, a mining company purchased an acre of land for Rs 20 crore far above the guidance value of Rs 1.40 crore, he said.

"This payment has been made to the Trust which has nothing to do with the donating company which has not been doing well but borrowed money from another company and donated this. I find this extremely difficult to understand this abnormal high price.

"We have come to an incontrovertible conclusion that this donation and sale consideration has been made for reasons other than genuine reasons." he added.

Replying to questions, Hegde confirmed that the report makes a mention of the CM, his family members, Reddy brothers, Sriramulu and Kumaraswamy and over 600 officials.

In the case of Kumaraswamy, the enquiry found "misconduct" on his part regarding grant of two mining leases and action has been recommended under PCA.

Referring to the purchase of one acre of land in Rachenahalli on Bangalore outskirts for a consideration of Rs 20 crore when its guidance value would not be more than Rs 1.4 crore, he described this as "abnormal payment to a trust which has nothing to do with a donating company which was not financially strong".

Hegde said he found it extremely difficult to accept that a company which did not have financial resources should borrow from other companies to make donation.

"Therefore, having come to the conclusion that there is an offence under the Prevention of Corruption Act is made, I have made recommendation to the Government to take further steps (against Chief Minister B S Yeddyurappa) in this regard because the competent authority for taking action against the Chief Minister is governor of the state".

He said the Lokayukta has submitted the report to the Government and a copy of the report with annexures have been sent to the Governor for "further action" (in regard to the Chief Minister).

On Reddy brothers, Hegde said contrary to their claim that they were not doing any mining in Karnataka, "we have enough documents to prove to the contrary."

He said the illegalities found were of different types as has been enumerated in different chapters and supported by documents.

"The offences committed by various people and companies will be covered under various acts and action will be taken in accordance with law under IPC, Forest Act, FMRDA and PCA," he added.

Hegde said the Lokayukta has recommended that since various illegalities and irregularities were committed the Government should cancel the mining licenses, compute the quantity of loss and treat it as "stolen iron ore" and recover money from people concerned at the market rate.

The Lokayukta enquiry found that there was rampant illegal mining in Bellary, Chitradurga and Tumkur because of which local people suffered from various problems.

"Once illegal mining is stopped the Central and the State government can recover lakhs of crores of rupees as Excise and VAT," he said, adding over 100 companies were involved in illegal mining.

Hegde has also recommended to the Government that security be provided to his team of officers since they could face possible threats from some quarters.

The enquiry team had a huge task in examining four lakh records and collating nearly 50 lakh entries in the effort to produce the report.

Governor studying Lokayukta report

Karnataka Governor H R Bhardwaj is studying the Lokayukta report on illegal mining, which has indicted Chief Minister B S Yeddyurappa and recommended his prosecution under the provisions of the Prevention of Corruption Act.

"The governor is going through the report. He will take a decision on future course of action after studying the report," a source in Raj Bhavan said.

The source said the governor will wait and watch the reaction of the government to the report, which was submitted to Chief Secretary S V Ranaganth by the Lokayukta on Wednesday.

Bhardwaj had earlier said he would act on the report if his intervention was warranted.

After the report was submitted, Lokayukta Santosh Hegde said the copy of the report had been sent to the governor, as he is the competent authority to take action against the chief Minister.

Yeddyurappa should resign: Congress

Dubbing the BJP Ministry in Karnataka as the "most corrupt government in free India",
Congress today demanded the immediate resignation of Chief Minister B S Yeddyurappa and all ministers indicted by the Lokayukta in the illegal mining case.

"Those holding constitutional positions should uphold high moral traditions...Yeddyurappa and all ministers involved in the nefarious activities should quit," party spokesman Shakeel Ahmed told reporters here.

Alleging that it was "common knowledge that the Karnataka government is the most corrupt government in free India", he claimed that the entire BJP leadership has been hand-in-glove and has been a beneficiary in illegal mining.

He said that an indication to this effect was available in the charges and countercharges between BJP leaders Sushma Swaraj and Arun Jaitley as to who was responsible for inducting Reddy brothers into the cabinet.

Speaking separately, AICC General Secretary B K Hariprasad wanted the BJP to sack Yeddyurappa immediately.

When told that Congress MP Anil Lad as also a steel company in which another party MP Navin Jindal has interests were also involved in the case, Ahmed as also Hari Prasad said that the law should take its own course in the matter.

I will complete five-year term: Yeddy

Meanwhile, Yeddyurappa said that the BJP central leadership had not asked him to resign.

“I will not dissolve Assembly and will complete five-year term,” said Yeddyurappa.

However, speculations are rife that the defiant Chief Minister would have to resign if the BJP wants to build pressure on Prime Minister and Home Minister over 2G scam in the upcoming monsoon session of the Parliament, which is scheduled to begin next week.

The BJP which was constantly attacking Congress over corruption will now have to remove their senior and Lingayat leader BS Yedyurappa, if Karnataka Lokayukta Justice N Santosh Hegde report confirms his involvement in nepotism and corruption.

Party President, Nitin Gadkari had said Yedyurappa’s future depend on Lokayukta report which will be presented to the government on Wednesday. Moreover, Gadkari has asserted that Yeddyurappa has promised to accept the party decision.