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Jagan disowning Gali brothers surprising

September 07, 2011 11:07 am | Updated 11:07 am IST - HYDERABAD:

YSR Congress president Y. S. Jaganmohan Reddy's attempt to put up a brave face and virtually disown the mining baron, Gali Janardhan Reddy, in New Delhi the other day has come as a surprise, given the well- known proximity of the two families and the unobtrusive, complex and nuanced business connections.

Nothing reflected these links more than the way former Chief Minister Y. S. Rajasekhara Reddy promoted Mr. Janardhan Reddy as neo-liberal economy's mining entrepreneur who would invest without taking any bank loan, usher in development in a backward region and create thousands of jobs.

Reddy came up with this familiar argument when the Assembly was in turmoil with the Opposition baying for Mr. Janardhan Reddy's blood highlighting his firm Obulapuram Mining Company's large scale illegal mining in Anantapur and huge extent of land allotted to his Brahmani Industries steel plant near Jammalamudugu in Kadapa district.

The marathon debate ended with Reddy mocking at the Opposition for being envious of development and generation of employment in Rayalaseema.

He had fielded half- a- dozen Cabinet colleagues to defend the deals.

Not just in the Assembly, outside too, Reddy took pride in showcasing Mr. Janardhan Reddy as an entrepreneur, especially when he laid the foundation stone for the mega steel plant having installed capacity of two million tonnes “on a par with Visakhapatnam Steel Plant” in June 2007. “No one had dreamt of a massive Rs. 20,000-crore steel plant to come up on 10,761 acre of barren land,” he had said proudly after laying the foundation stone.

He went out of his way in promising two tmcft of water from Gandikota reservoir for the steel plant, spoke of getting more water from sea by setting up desalination plant and announced allotment of additional 3,000 acres nearby for a commercial airport near Kadapa.

The steel company had boasted that it would invest about Rs. 1,050 crore in the first phase itself with revenue generated from the OMC without approaching a bank. Four years down the line, the “dream project” that was to come up in 18 months had failed to take off, though Gali brothers allegedly managed to raise a loan of Rs. 350 crore by mortgaging the land while the iron ore mine leased as captive for his steel plant had disappeared.

A father figure

Cementing the relationship with Reddy, Mr. Janardhan Reddy had famously mentioned how the former was like his father and the latter Mr. Jaganmohan Reddy, his younger brother.

Apart from the close friendship despite the mining baron's BJP leanings, questions are now being raised over the way Gali brothers allegedly facilitated steady flow of funds into Mr. Jaganmohan Reddy's companies.

What raised suspicion was that directors of both these companies figured on the board of Mr. Jaganmohan Reddy's Jagathi Publications that publishes Sakshi .

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