Sack Reddys for tax evasion, Congress urges governor

BANGALORE - The Congress in Karnataka Tuesday demanded the sacking of ministers and mining barons, the Reddy brothers, and their associate for allegedly evading huge income tax payments.

State Tourism Minister G. Janardhana Reddy, his brother and Revenue Minister G. Karunakara Reddy and their associate Health Minister B. Sriramulu have evaded paying around Rs.86 crore in income tax, the Congress said in a memorandum to Governor H.R. Bhardwaj.

“The Reddys and their associate should have resigned on moral grounds. Since they have not done and their party, Bharatiya Janata Party, has no regard for moral values, we have demanded their sacking from the ministry,” two Congress leaders said after meeting the governor.

Legislative council member K.C. Kondaiah and former leader of the Congress party in the council V.S. Ugrappa said the IT department had found that the Reddys and their associate had used a ‘one-dollar’ company in Singapore to evade tax.

The Reddys own the Obulapuram Mining Company and have been accused of large-scale illegal iron ore mining in Karnataka’s Bellary district and neighbouring Andhra Pradesh.

Bellary is the stronghold of the Reddys and their associate Sriramulu. Bhardwaj has also been demanding that Chief Minister B.S. Yeddyurappa take action against the Reddy brothers for their alleged illegal mining activities.

The Reddys have denied the illegal mining allegations but so far have not reacted to the IT notice to them on tax evasion.

They said the IT department had found that the Reddy brothers had sold iron ore to the Singapore company, which was registered with ‘one US dollar’ as its capital, at a cheap rate and later exported the item to other countries at a higher rate.

The company listed Janardhana Reddy as one of its directors. Reddy had acknowledged earlier that he was a director of the company.

Kondaiah, who also hails from Bellary, has been waging a battle against the Reddys over their alleged illegal mining.

Bhardwaj has sent to the Election Commission a petition by Kondiah to disqualify the Reddy brothers from being legislators on the ground they hold office of profit. The petition is pending with the Commission.

Bhardwaj had early this month publicly expressed unhappiness that Yeddyurappa had not replied to his letters over action taken against the Reddys.

After Yeddyurappa sent the reply, Bhardwaj had said he was not happy with it and would write to the chief minister again.

The Reddys had almost brought down the Yeddyurappa ministry in November-December last year. The differences were papered over by senior BJP leader Sushma Swaraj, to whom the Reddys became close during the 1999 Lok Sabha polls when she took on Congress president Sonia Gandhi from Bellary.