SC orders CBI inquiry into Yeddyurappa, JSW Steel in Karnataka mining scam

Written by Indu Bhan | Indu Bhan | New Delhi | Updated: May 12 2012, 08:19am hrs
In a setback to former Karnataka chief minister BS Yeddyurappa, the Supreme Court on Friday ordered a Central Bureau of Investigation (CBI) probe against him for allegedly granting undue favours to JSW Steel and others in lieu of donations to a charitable trust run by his kin.

The CBI will complete the investigation into the case and submit the report to the trial court within the timespan of three months.

While directing the probe into the alleged massive illegal mining in Karnataka when Yeddyurappa was the chief minister, and the suspected role of the country's third-largest steel producer JSW Steel in the scam, a three-judge forest bench headed by Chief Justice SH Kapadia directed the agency to complete the probe in "a most fair, proper and unbiased manner uninfluenced by the stature of the persons and the political or corporate clout, involved in the present case. It will be open to the CBI examining and inspecting the records of any connected matter pending before any investigating agency or any court.

The court endorsed the April 20 report of the Central Empowered Committee (CEC) that also recommended that the CBI should look into linkages between the two donations worth Rs 10 crore during March 2010 made by South West Mining, a Jindal Group company, to Prerana Education Society set up by close relatives of Yeddyurappa, and alleged receipt of illegal mineral ore by JSW Steel and alleged favours shown to it in respect of Mysore Minerals.

After the news of the probe, the JSW Steel share plunged 8.36% to a low of Rs 606.10 on the BSE, before recovering some of the losses. The stock finally ended the day down 5.19% at Rs 627.05.

Meanwhile, another CEC report dated April 27 recommending "in-depth investigation into the export of illegal export of illegally-mined iron ore by Adani Enterprises, through the Belekeri port in the state, will be taken up by the court on August 3. Adani Enterprises is the flagship firm of the the Gujarat-based Adani Group.

The apex court also also stayed all pending proceedings before all other courts and authorities in connection with the case and directed the Andhra Pradesh and Karnataka governments and other parties to cooperate with the CBI in the investigation.

Reacting to the order, JSW Steel in a press statement reiterated that "it has not done any illegal activity nor connected with any wrongdoing. It has full faith in the judicial process and its books are open and it will fully cooperate with the investigating agencies".

Its joint MD & group CFO Seshagiri Rao further added that "the group follows highest standards of corporate governance. JSW Steel is in fact the victim of alleged illegal mining."

JSW Steel and Yeddyurappa had earlier opposed such a probe on the grounds that the matter was pending with the state's law enforcing agencies.

Yeddyurappa's counsel V Giri had argued that merely on the basis of the CEC report, the probe cannot be handed over to the CBI as the Lokayukta police was seized of the matter and the former chief minister had got relief from the Karnataka High Court against which an appeal is pending before the apex court.

However, Yeddyurappa had a different take on the Supreme Court order. Welcoming the CBI probe, Yeddyurappa told reporters : "I request the Prime Minister to order a CBI probe into the issue since 2000 till my regime... Political conspiracy hatched against me has made me an accused in illegal mining though it is I who stopped it. I am facing the trouble after doing good work. I know how to come out of this political labyrinth.