Bangalore, July 29:The Lokayukta report clearly exposed the payments made by South West Mining Company Limited (SWML) to Prerana Education Trust run by the sons of chief minister BS Yeddyurappa and also certain sales carried out by son BY Raghavendra and son-in-law, reports Mumbai newspaper DNA.
One acre of land in Bangalore was sold to SWML for about `20 crore. Its market price is estimated at Rs1.24 crore, according to the report.The report also traced the possible relationship between Jindal group of companies (JSW) and SWML.
JSW is also having a mine managed jointly with Mysore Minerals Ltd (MML) through Vijayanagar Minerals Pvt Ltd (VMPL). It is known as Timmappanagudi iron ore mine (TIOM). The VMPL is a joint venture company of JSW and MML.
The details of exports and domestic trading of iron ore by SWML were sought from January 7, 2011 to January 20. BP Pandey, general manager of JVSL, and his associates, were present only on March 3.
There was a joint venture deal between MML and JSWSL (the then JVSL) for sharing produce generated from TIOM mines. According to the deal, the sharing of iron ore was restricted to MML and JSWSL. There was no provision for selling iron ore to a third party.
Contrary to the agreement in 2003-04, there was a sale of 85,022 metric ton (MT) of ore by VIMPL to South West Mining Ltd. The same was exported along with other iron ore. A total 365,594 MT was exported during 2003-04 and 2004-05 by SWML. The MML did not take any action in this regard.The companies made their application for grant of mining lease on July 1, 2007 but the same was not pursued till March-July 2010.
The investigating team found some unusual transactions. From the SWML account in State Bank of Mysore Toranagallu, `10 crore was paid to Prerana Education Trust on March 1, 2010 and March 18, 2010. A sum of `11.91 crore was credited by cheque No. 80912 dated February 26, 2010 in account No. 64010486365 of SWML. The said amount had come from the account of JSW Steel Ltd from Vijaya Bank, Toranagallu.
The transaction clearly showed that the amount from the account of JSW Steel Ltd was paid to Prerana Trust. Though there was no iron ore trade during the period, the bank balance in the account of SWML was in the range of `3 crore to `5 crore. If we go by the trail of money transactions, it can be construed that `10 crore was paid by JSW to Prerana Education Trust.
Individual accounts also showed heavy transactions. A sum of `20 crores was paid for the purchase of land in Bangalore. The SWML had also submitted the agreement of land purchase.All cheques were paid in August 2010 and their validity dates were in August and September 2010. The date of the agreement was kept blank but it was signed in July 2010.
However, there was mismatch in the agreement signed and the amount actually credited in the accounts of the vendors. If consideration has been paid on the date of agreement to sell of `10 crore, the payments made in August and September 2010 by cheques may not be towards sale consideration.
In the second sale deal between BY Raghavendra and SWML, `10 crore was paid on the date of agreement to sell. The e-stamp certificates were purchased from Sandur on July 28. On the same day, the agreement to sell was signed in Bangalore.The above amount paid from the account of SWML to Prerana Education Trust, and to BY Vijayendra, BY Raghavendra and RN Sohan Kumar came from JSW Steels Ltd.
The payment proved that it was made to get a favourable reply from the state to the Centre for processing the proposals to grant iron ore mining leases in favour of JSW, SWML and VMPL, the report said.
These applications are pending with the Government of India. The amount paid for purchase of this land again has particularly come from Jindal Praxair Oxygen Company Limited.
Notification in possession with Lokayukta showed the guidance value of the price of lands in Rachenahalli village. The price for industrially converted land here is Rs 1.24 crore per acre. The land sold by the family members of the chief minister is industrially converted land.
Taking the highest price shown in the guidance value and comparing it with the amount received by the family members of the chief minister for one acre in Rachenahalli village, Lokayukta found it hard to believe that this big amount would not have been paid by a company for purchase of one acre of land.
No prudent business person would pay such a huge amount for purchase of one acre of land, unless there was other collateral consideration, the report said.
The report noted that on or about the time of the purchase of land and donation, three applications were pending before the Government of Karnataka and suitable reply favouring the companies concerned would have been of great advantage to these companies.
The report concluded that sham transactions and the donation and excess payment made to the family members of the chief minister were to get a favourable reply from the state government to the central government.
The receipt of money either as donation or as sale consideration amounted to receiving illegal gratification to show an official favour, which was an offence under the Prevention of Corruption Act, 1988, the report said.
Therefore, the Lokayukta considered it necessary to recommend to the competent authority to take appropriate steps to initiate criminal proceedings against the chief minister and others who were involved in the said transaction.Lokayukta N Santosh Hegde during a farewell programme organised by Lokayukta staff at his office, in Bangalore, on Thursday.