The Obulapuram Mining Company has been at the center of a long-standing controversy in India. The company's mining activities have been accused of causing environmental degradation and displacement of local communities.
The controversy surrounding the company dates back to 2009 when a mining scam was exposed, involving the company's alleged illegal extraction of iron ore.
In 2012, the Supreme Court of India ordered the company to pay Rs. 5,500 crore as compensation for the environmental damage caused by its mining activities.
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Investigation and Allegations
The investigation into Obulapuram Mining Company (OMC) was a complex and multifaceted affair. The Income Tax Department, Karnataka and Goa Investigation and Central Commissionerate, uncovered under-invoicing and tax evasion by OMC, run by the Reddy brothers and their associates.
A team of officers found that OMC had entered into a Memorandum of Understanding (MoU) with a one-dollar company in Singapore, GLA Trading International (GLATI), to camouflage income suppression. GLATI was established on November 30, 2007, with Janardhana Reddy as one of its directors.
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Shipping bills for export compared with other companies revealed malpractice by OMC, confirming the investigation's findings. OMC claimed the MoU was to develop stronger relationships with global buyers through GLATI for financial stability against price fluctuations.
The CBI filed four chargesheets against nine individuals, including Gali Janardhana Reddy, BV Srinivasa Reddy, and Mefaz Ali Khan. The charges included illegal mining beyond leased areas, causing a loss of ₹884.13 crore to the exchequer.
Accused in the case include:
- Gali Janardhan Reddy (former Karnataka minister and mining baron)
- BV Srinivasa Reddy (OMC managing director)
- Mefaz Ali Khan (Gali’s personal assistant)
- VD Rajagopal (former director of mines department)
- Kripanandam (a retired IAS Officer)
- Sabitha Indra Reddy (Telangana minister)
- Y Srilakshmi (an IAS officer)
- R Linga Reddy (assistant director of mines department)
The CBI alleged that Srilakshmi misused her office during her term from 2007 to 2009 as secretary, industries and commerce in the government of then united Andhra Pradesh.
Legal Proceedings
The Obulapuram Mining Company case made its way through the courts, with a special CBI court in Nampally, Hyderabad delivering its verdict on May 6, 2025.
The court found the accused guilty on various charges, including criminal conspiracy, corruption, and violations under the Mines and Minerals (Development and Regulation) Act 1957. The convicted individuals were given a fair sentence.
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Gali Janardhan Reddy, the former Karnataka Minister and owner of OMC, was convicted for criminal conspiracy, corruption, and illegal mining. He was sentenced to seven years of rigorous imprisonment and fined ₹10,000.
B.V. Srinivasa Reddy, the Managing Director of OMC, was also convicted for his role in the illegal mining operations. He received the same sentence as Reddy.
V.D. Rajagopal, the former Director of Mines, Andhra Pradesh, was convicted for favoring OMC by granting illegal permissions and denying mining rights to other applicants in exchange for bribes. He was sentenced to seven years of rigorous imprisonment and fined ₹10,000.
K. Mehfuz Ali Khan, the Personal Assistant to Gali Janardhan Reddy, was convicted for his involvement in the illegal mining operations. He was also sentenced to seven years of rigorous imprisonment and fined ₹10,000.
OMC was fined ₹1 lakh for its role in the illegal mining operations.
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Obulapuram Mining Company
The Obulapuram Mining Company was a major iron ore mining operation in the state of Andhra Pradesh, India.
It was founded by Gali Janardhana Reddy, a prominent Indian politician and businessman.
The company was involved in several high-profile mining scandals, including the Obulapuram iron ore mining case, which led to its shutdown.
The case involved allegations of illegal mining and corruption, with the company accused of extracting iron ore without proper permission.
The company's mining activities had a significant impact on the local environment, with reports of deforestation and water pollution.
The Obulapuram Mining Company was a major player in the Indian mining industry, with operations spanning several years.
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