Iron ore miner and political leader G Janardhana Reddy has divested his personal stake in Brahmani Industries Karnataka, a ten-month-old entity planning a mega steel plant in the mineral rich Bellary district, to the Miglani family, promoters of Uttam GalvaSteel, for Rs 285 crore. But Reddy, who is state minister in Karnataka's Bharatiya Janata Party (BJP) government, and his politically influential family will be retaining complete ownership of their flagship steel firm Brahmani Industries, which is setting up a Rs 6,000 crore plant in Kadappa district of Andhra Pradesh.
“I have sold Brahmani Industries Karnataka, which was fully owned by me, to the Miglani family, since I wanted to divest all business interests in the state (due to political controversies). But Brahmani Industries, which is owned by our family enterprise, Obalapuram Mining Company, is going ahead with plans to build a 1.25 million tonne steel plant in Andhra Pradesh. We have invested Rs 1,350 crore into this project till now, and will complete the project after the Supreme Court decides on pending legal matters,” Janardha Reddy, managing director of Obalapuram Mining Company, told TOI.
Obalapuram Mining is the main family enterprise, which owns iron ore mining centres in Andhra Pradesh, and coal mines in Indonesia and Australia. This decade-old firm is jointly owned by Janardhana Reddy and his two elder brothers who are also prominent political figures in Karnataka's incumbent BJP administration. The firm has permit to export up to 7 million tonnes of iron ore and reported annualized revenue of Rs 2,000 crore, Reddy said.
Reddy and his family, the nouveau mining magnates from Bellary, have been accused by their political rivals of profiting from illegal iron ore exports, and fighting legal battles for encroaching forest areas to expand their mining enterprise, a charge which he denies vehemently. Infact, he says he is actually the victim because of business interests of certain rivals.
Brahmani Karnataka was floated to set up a mega steel plant in the state where he emerged a formidable political figure in the past few years and was not a subsidiary of Brahmani Industries. Interestingly, the Mumbai-based Miglani family brought the firm and its five thousand acre land in Karnataka's Bellary district through a personal investment firm Uttam Galva Ferrous, and not through their public listed Uttam Galva Steel in which ArcelorMittal is a shareholder.
ArcelorMittal was planning to set up Rs 30,000-crore steel plant in the Bellary district and has completed land acquisition for the same.
“”The sale price of Rs 285 crore only reflects the land acquisition cost as this firm has done little other work in the past ten months,” Reddy said. “I decided on the sale after having said that I will not have any ownership interest in businesses operating in Karnataka. Whatever mining interests that I own now are in Andhra Pradesh and outside India,” he added.
Source: Times of India