Mahesh and Nagaraj made all this money in two years

From absolute nobodies to multi-millionaires; the story of the Bellary mining scam’s key conspirators — Kharapudi Mahesh and Swastik Nagaraj — is no less legendary compared to that of G. Janardhan Reddy. After all, the two milked Rs. 35 crore from the mining scam in a matter of 18 months.

Before hitting pay dirt, Mahesh was an autorickshaw driver. And Nagaraj was a small steel merchant. Following Thursday’s CBI operation, which forced Mahesh to flee and landed Nagaraj behind bars, sources helped The Hindu piece together their nefarious ‘business model’.

“The ‘Bellary Risk’ was their brainchild,” says a CBI officer who preferred anonymity. Bellary Risk was the term the duo gave to an illegal extortion business where they provided immunity to transporters and miners who were transporting illicit ore to the Belekeri Port.

When transporters paid Bellary Risk, they were given tokens by Mahesh and Nagaraj, which had the names of various fictitious firms on them such as Jambutheshwar Minerals, Thirumala Minerals or Shafia minerals. When truck drivers carrying the illegal ore would flash these token, officers manning check-posts between Bellary and Belekeri would usher them forward.

Mahesh and Nagaraj allegedly collected Rs. 200 for each tonne of iron ore that left Bellary for Belekeri for export. In the 18 months between January 1, 2009 and May 31, 2010 the CBI’s records show that nearly 1.4 crore tonnes of iron ore left for Belekeri. And each tonne transported put Rs. 200 in the pockets of Mahesh and Nagaraj. But they allegedly ran this racket for over two years, leading CBI investigators to suspect that they helped transport nearly two crore tonnes of illegal ore.

“It is not like they got to keep the entire Rs. 200 of Bellary Risk that they collected. Many others had to be paid,” says one CBI official. Providing The Hindu access to their books of accounts, the CBI officer shows that of the Rs. 200, Rs. 100 would go straight to Janardhan Reddy under whose patronage Mahesh and Nagaraj operated.

Kampli MLA Suresh Babu, now in jail, would have to be paid Rs. 5 per tonne. Janardhan Reddy’s prime enforcer Mehfouz Ali Khan and his associate Chandrashekhar had to each be paid Rs. 2 per tonne. Another rupee per tonne would have to be paid to Suresh Babu’s partner Hireswamy. After giving a share of the money to officers from the Mines and Geology as well as Forest Departments, Mahesh and Nagaraj would be left with Rs. 18 for every tonne of illegal ore that they helped transport.

Daily, around 800 trucks were leaving for Belekeri in that period — each carrying at least 32 tonnes of ore. Over a period of 18 months (January 2009 to May 2010) Mahesh and Nagaraj made over Rs. 25 crore by earning Rs 18 per tonne. “But they carried on this business for at least two years and we estimate that they made at least Rs. 35 crore,” says a CBI officer.

In this story, it was erroneously mentioned that Kampli MLA Suresh Babu is in jail. In fact, he was granted bail in October 2012. The error is regretted.