The final report of the Karnataka Lok Ayukta into the illegal mining in the state has established that the powerful Reddy brothers of Bellary, Gali Janardhan Reddy and Gali Karunakar Reddy, have stashed away huge funds in tax free havens abroad in the same way the former chief minister of Jharkand, Mr Madhu Koda has done.

The report, submitted just two days ago that resulted in the downfall of the chief minister BS Yeddyurappa, says that the Reddy brothers along with their confidant B Sriramulu, have stashed away in foreign banks a minimum of Rs 215.12 Cr and asked the IT department to conduct a thorough investigation to know the exact figure in this regard and bring the amount back to India.

The report reveals the modus operandi of the Reddy brothers adopted in the diversion of funds. The Obulapuram Mining Company (OMC), owned by the Reddy brothers, exported the iron ore consignments to the GLA Trading International in Singapore for which one of the Reddy brothers Mr Gali Janardhan Reddy is one of the directors. The ultimate destination of exports is China but the exports are routed through Singapore.

While the consignments to Singapore were always under invoiced at $94 per tonne, the Singapore Company actually dispatches the consignments to China with its actual price at $152 per tonne making a clear difference of $58 per tonne.

The GLA Trading International was established on November 30, 2007 with a share capital of $1 with their offices functioning from the tax havens of Singapore, Dubai and the British Virgin Islands.

The report says the OBC had under invoiced its consignments for 478 times amounting to over Rs 2,222 Cr. “This fraud must be thoroughly investigated,” said the report, adding that the amount should be brought back to India.