Hyderabad: In June 2007, YS Rajasekhara Reddy, along with his son Jagan Mohan, was seen at the foundation-stone ceremony of Gali Janardhana Reddy's Brahmani Steels in Andhra Pradesh's Kadapa district. Even at that time there were allegations that YSR had given away 10,670 acres of government land at throwaway prices.
"They say me and my son actually own this and Gali Janardhana Reddy is a benami...The opposition is making such wild allegations," YSR had then said.
Today, Gali Janardhana Reddy and Jagan Mohan Reddy are both facing a Central Bureau of Investigation (CBI) probe that is also investigating financial links between the two.
The YSR family and Gali brothers were seen to have enjoyed a symbiotic relationship that helped both parties. It was YSR Reddy, who granted Janardhana the lease for his mining operations in Andhra Pradesh.
NDTV visited a building in Hyderabad, said to house the registered office of Jagati Publications that runs the Jagan-owned Sakshi newspaper. Two other firms, Red Gold Enterprises and RR Global Enterprises, that are alleged to be the investment link between Gali Janardhana Reddy's Obalapuram Mining Company (OMC) and Jagan's companies, share the same registration address.
NDTV also has access to documents which show that Red Gold is a partner of OMC. According to a registered agreement, OMC was obliged to sell 50 per cent of all iron ore mined, at operational cost plus five per cent, to Red Gold. This was said to be for help in identifying deposits and getting licences and permissions. Critics have pointed out that such a consultancy being worth some Rs. 400 crore per annum is unheard of.
RR Global Enterprises, another trading company dealing with iron ore, has reportedly invested Rs 44 crore in Jagati Publications.
Jagan Mohan has been reacting with anger to reports of his alleged links with the Gali brothers. "Ask the BJP... what do I have to do with it?" he snapped today when reporters asked him about Janardhana's arrest.
Janardhana, who was Tourism Minister for Karnataka till last month, was arrested on Monday for illegal mining. His company, OMC, has been accused of mining in forest areas, and of illegally exporting iron ore.
The challenge for the CBI, now, would be to connect the dots between OMC, Red Gold, RR Global and Jagan's media outfits to establish in a court that the fund flow violated the law of the land. However, observers say that is unlikely to be a simple affair.