Obulapuram Mining Company
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| Industry | Mine Materials |
|---|---|
| Founded | 29 October 2001 at Karnataka, India |
| Headquarters | 123 Veeranagouda Colony Opp Kumara Swamy Temple Bellary, India, 583104 |
Key people | G. Karunakara Reddy, G. Janardhana Reddy and G. Somashekara Reddy |
| Products | Mine Iron ores Manganiferous ore |
Obulapuram Mining Company also known as OMC or OMCPL is an iron ore mining company located in Karnataka and Andhra Pradesh in India. The company is owned by the brothers, G. Karunakara Reddy, G. Janardhana Reddy and G. Somashekara Reddy, who were ministers in the Government of Karnataka.[1][2] The company has been fighting charges of illegal mining in forest lands on the Karnataka-Andhra Pradesh border.[3][4] OMCPL holds iron ore mining leases in 134 hectares in Anantapur District of Andhra Pradesh and iron ore reserves in these leases are estimated to be around 100 million tonnes.[1] OMCPL is also the promoter of a Bramhani Industries Limited, an iron and steel producer.[1] JSW steel is said to be in talks for partial ownership of OMC.[5]
The Income Tax Department, Karnataka and Goa Investigation and Central Commissionerate had unearthed under-invoicing and tax evasion of around by the Obulapuram Mining Company (OMC), run by Karnataka's Reddy brothers and also their trusted confidante and state health minister B Sriramulu which sparked off the entire investigation into discrepancies into mining in the State of Karnataka.[6]
The investigation found massive tax evasion and money laundering prompted mass panic amongst the then BJP government in Karnataka.[7] A team of officers found that the OMC had entered into a MoU with a one-dollar company of Singapore to camouflage the company's income suppression.[8] Officials found that the one-dollar company, GLA Trading International (GLATI), was established on 30 November 2007, with Janardhana Reddy as one of its directors. GLA, presumed to be named after Janardhana Reddy's wife Gali Laxmi Aruna, has offices in Singapore, Dubai and the British Virgin Islands, which is a `tax haven'. The investigation report held that "OMC's transactions through the MoU with GLATI are convoluted and devised to evade tax payment in India," A comparative study of shipping bills for export with other companies, which are exporting the same grade material, confirmed the malpractice by OMC. According to the report, OMC signed the MoU with GLATI to sell iron ore only to evade tax payment in India.
When the Commissioner summoned Janardhana Reddy and sought explanation from OMC, the Reddys claimed it suppressed sales for developing stronger relationship worldwide with global buyers through GLATI for financial stability against price fluctuations. This report was recorded in the book Let us Share by the Finance Ministry.
Implication in Lokayukta Report of July 2011
The Lokayukta Report on illegal mining in Karnataka [9][10][11][12] details the methods in which miners, government officials and ministers colluded to defraud the government of mining revenues. The report details the complete breakdown of democratic governance in the bellary area [13][14] and uncovers the "zero risk system", a protection and extortion racket, masterminded by G. Janardhana Reddy.[15][16] The report describes the illegal money transfers to foreign companies and tax shelters by mining entities such as Obulapuram Mining Company, Associated Mining Company, GLA Trading and GJR Holdings owned by the Reddy Brothers.[17][18]
