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Ponzi Scam: Mining Baron G Janardhana Reddy Granted Bail

Reddy was granted bail two days after the former mining baron was arrested by the Bengaluru Police's Central Crime Branch unit for allegedly receiving funds from a finance firm accused of swindling hundreds of investors via Ponzi schemes.

Ponzi Scam: Mining Baron G Janardhana Reddy Granted Bail
Ponzi Scam: Mining Baron G Janardhana Reddy Granted Bail
outlookindia.com
2018-11-15T07:39:00+0530

Three days after he was arrested by the Bangalore police in connection with an ongoing probe into a ponzi scheme, Karnataka mining magnate G Janardhana Reddy was granted bail by a city court on Wednesday.

Reddy's advocates argued that there was no connection between Reddy and the cheating case which Bangalore's Central Crime Branch (CCB) were investigating.

Reddy was accused by the Bangalore police of taking money from a ponzi scheme promoter Syed Fareed Ahmed who was allegedly looking for a way to get out of an Enforcement Directorate (ED) enquiry he was facing. After  lengthy questioning, the police arrested Reddy on Sunday saying they had to recover the Rs 20 crore that was allegedly paid to him because it was investors' money.

The Bangalore police say they began investigating Ambidant after a flood of cheating complaints came in about the firm. According to the police, it had raised as much as Rs 600 crore from about 15,000 investors, offering 40-50 percent interest on deposits within four months. Separately, the ED had investigated the firm in January and, finding FEMA violations, slapped a penalty of Rs 1.86 crore.

The Bangalore police say their probe tracked several bank transactions made by Ambidant which included investments into real estate and other payments. One of them was an Rs 18 crore transaction made to a Bangalore-based gold bullion dealer for the purchase of 57 kilogrammes of gold. According to the police, Ambidant's promoter Syed Fareed Ahmed claimed to have given the gold and Rs 2 crore cash to Reddy's assistant Mehfuz Ali Khan. The allegation is Fareed paid Reddy as he promised to help out with the ED case.

Reddy's lawyers argued that the police had falsely implicated him in the case and that he had no connection with Ambidant. Meanwhile, Mehfuz Ali Khan told the court in an affidavit that he had taken a loan from Fareed to fulfill some religious vows.

A former Karnataka minister, Reddy was investigated in Bellary's iron-ore mining scam that tainted the BJP's first term in office in the state. He had been granted bail by the Supreme Court in 2015 after spending four years in prison.

He mostly kept a low profile after that until his daughter's grand wedding two years ago made news nationwide. The wedding venue in Bangalore was a re-creation of the Vijayanagar capital Hampi, with temples, chariots and mansions and speculation was rife about the crores of rupees he lavished on it. Disconcertingly, for the BJP, the wedding had come just days after demonetisation.

Reddy re-appeared on Karnataka's political scene in May this year causing the BJP some discomfiture during election season. He made news by taking up temporary residence in a farmhouse in a remote location just outside the border of Bellary -- his bail conditions in the mining case bar him from entering the district -- to campaign for his close friend, BJP leader B Sreeramulu. 

He hit headlines again last month in the middle of the Bellary Lok Sabha bypoll -- this time for a comment in a television interview that former Chief Minister Siddaramaiah losing his son Rakesh (in 2016) was punishment for sending him to jail. Not surprisingly, it drew a frown from BJP leaders as well.

The BJP -- whose approach to Reddy has been ambivalent -- didn't comment much about his current woes while the ruling Congress-Janata Dal Secular coalition denied that the government had anything to do with the case. Reddy's fresh lot of trouble came, ironically, even as the Bellary Lok Sabha seat -- which has been firmly in the BJP's grip for the last 14 years -- fell to the Congress in the bypoll last week.

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