Companies

CBI conducts search on JSW Steel offices in Bellary

| Updated on: Oct 03, 2011
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Residences of MLA and mine owner also searched

Officials from the Central Bureau of Investigation (CBI) on Monday conducted searches in the offices of JSW Steel in Bellary district and also the residence of Mr B. Nagendra, Kudligi MLA, a trader and transporter of iron ore and a close associate of Mr G. Janardhan Reddy, former Karnataka Minister.

Simultaneous searches were also conducted on the residence of Ms K.M. Parvathamma, a mine owner, and the offices of Deccan Mining Syndicate and Karthikeya Mineral Exports in Bellary.

Stock plunges

JSW Steel's shares at the BSE on Monday hit an over two-year low (since July 2009) on the back of this news. During intra-day trade, the steel maker's share prices fell 8.67 per cent to Rs 540, finally dropping 7.07 per cent to Rs 549.50 as markets closed for the day.

The search

The CBI officials, divided into seven teams, swung into action in the early morning and carried out searches besides verifying documents and records at JSW Steel premises, Mr Nagendra's house and also his office and at the residence of Ms Parvathamma, located at Parvathi Nagar.

Ms Parvathamma and her son, Mr K.M. Vishwanath, were instrumental in roping in Mr Reddy and his wife Ms Lakshmi Aruna as partners of Associated Mining Company (AMC) and retired as partners the very next day. AMC, according to the Lokayukta report on illegal mining and also the Central Empowered Committee report, was accused of transporting huge quantity of ore, extracted in other mines.

Sources said that a five-member team from CBI were busy verifying the documents at the JSW premises, besides quizzing the executives. The transport operators were also summoned to be quizzed over the extent of ore transported from AMC and also on over loading.

Another team, after searching the house of Mr Nagendra, which lasted for over four hours, began searching his office as well. Yet another team that searched the house of Ms Parvathamma, also searched the house and the office of AMC, located in the adjacent compound.

JSW's reply

Our Mumbai Bureau reports: The Sajjan Jindal-led JSW Steel, however, said that the CBI team visited the company's Vijayanagar works today only to seek “certain information about procurement of iron ore”. It denied that there were any “raids”, calling the media reports on Monday morning as “misleading”.

“JSW Steel has been procuring iron ore from various sources for its steel production requirements and every tonne procured is accounted, paid for and in compliance with applicable rules and regulations. JSW Steel has and will fully cooperate and provide all the information that may be sought by the authorities concerned in this regard,” the steel maker said in an official statement.

Published on October 03, 2011

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