This iron ore is alleged to have been illegally mined after paying a minuscule royalty to the government. The major regularities involve mines in Bellary, including those of Obulapuram Mining Company owned by G. Karunakara Reddy and G. Janardhana Reddy who were ministers in the Government of Karnataka at the time.
A team headed by the Additional Commissioner of Income Tax raided the premises of over 10 people, the team consisted of around Income tax Investigation officials and companies of Central Reserve Police Force conducted raids. Income tax officials described it as one of the biggest IT raids in the recent history.
The investigation found massive tax evasion and money laundering which prompted mass panic amongst the then BJP government in Karnataka. 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.
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 billed as the best investigation of the year and recorded in the book Let us Share by the Finance Ministry. Santosh Hegde resigned from the Lokayukta position on 23 June citing inability to be effective in his anti-corruption mandate owing to a non-cooperative Government of Karnataka    In January Mr Kharge questioned the governoment about transfer of Dileepkumar PCCF who refused to sign the report but Government brought S Nagaraja as PCCF who signed the report.
Collusion of officials and politicians in permitting illegal mining[ edit ] Environment Ministry officials state that the It was found by the Lokayukta that sometimes the actual mining areas are not related to the sketch given with the applications without officials crosschecking them. Further mining applicants falsely claim a prohibited forest area as a revenue area. Finally the actual area of the mine is much bigger than the claimed area. But miners have flouted this rule to over-extract iron-ore.
Meaning of LEGAL AID in Hindi Translation of LEGAL AID
For example, if they are allowed to take metric tones, mines take 1, metric tonnes. Underpayment of royalties to state[ edit ] There is a huge difference in the market price of the ore and the royalty specified by the government as well as faulty measurement mechanisms of amount of ore extracted. There are proposals to link the royalties to the market price of iron-ore.
Environmental impact of mining According to the Lok Ayukta Report,  there have been severe ecological changes due to illegal mining. Certain species of animals, like the sloth bearthat in the Bellary region have disappeared. Medicinal plants from the area do not grow any more. The entire system of rain has changed in the district of Bellary. It is reported that the entire area surrounding the mining area is denuded of greenery and has no agricultural activity. Belekeri port scandal[ edit ] Related is the Belekeri port scam where illegally mined ore which had been seized was surreptitiously exported from the port.