FRAUDULENT, DECEPTIVE ACQUISITION OF RATNA CEMENTS (YADWAD) Ltd

ILLEGAL, FRAUDULENT, DECEPTIVE ACQUISITION OF RATNA CEMENTS (YADWAD) Ltd., BY THE CHILDREN OF THE CHIEF MINISTER SRI.B.S.YEDDIYURAPPA AND CAUSING LOSS TO STATE GOVERNMENT UNDER TAKINGS AND PREFERENTIAL ALLOTMENT OF LIMESTONE MINING LEASE OF 1417.5 Acres of IN YADWAD VILLAGE, BELGAUM DISTRICT, KARNATAKA.

When the JDS and BJP Government came in to power in the state of Karnataka in Feb.2006 the Deputy Chief Minister of BJP Sri.B.S.Yeddiyurappa was Finance Minister and Sri.Katta Subramanya Naidu was Industry Minister in the Government Headed by Sri.H.D.Kumarswamy.

Sri.B.S.Yeddiyurappa and Sri.Katta Subramanya Naidu entered in to sinister conspiracy in acquisition of Cement Company namely Ratna Cements (Yadwad) Ltd., Sri.B.S.Yeddiyurappa being the finance minister had director control over the state government undertaking namely Karnataka State Industrial Investment Development Corporation, which came under the finance department and Sri.Katta Subramanya Naidu the industry minister had control over industries and commerce department GoK which had control over the company M/s Ratna Cements (Yadwad) Ltd., Belgaum on policy decision and allotment of mining quarry.

The conspiracy to defraud the state Government undertaking namely Karnataka State Industrial Investment Development Corporation begin in 2006 as soon as came to power and was completed during 2009. The modus operandi being as follows:-

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M/s. Ratna Cements (Yadwad) Ltd was incorporated 25.04.1979 with registered office at Yadwad, Gokak Taluk, Belgaum District, for setting up of a 450 MPTD cement plant. During the year 1996 the company had obtained Term Loan Rs.4 Crores from KSIIDC, repayable in 20 quarterly installment with a moratorium of 24 months, the company Ratna Cements could not repay the principle and interest in accordance with Term Loan schedule and during 2006 when Sri.B.S. Yeddiyurappa became the Deputy Chief Minister, one time settlement proposal was initiated with KSIIDC, with sole intension to acquire the company later on, it was stated the promoters and company net worth had been completely eroded and settlement of Rs.4.8 Crores was made to be accepted by KSIIDC by the Deputy Chief Minister Finance Sri.B.S.Yeddiyurappa by waving Rs.7.5 Crores (appx) of interest un serviced to KSIIDC and also KSIIDC had made investment in form of shares subscription for 2.9 Lakhs shares at the rate of Rs.10/- each of Ratna Cements (Yadwad) Ltd, which it continues to hold till date in the form of investment even though substantial loan amount had been sacrificed by KSIIDC and had lost huge amount in form of waiver of interest for the Term Loan it had advanced, which is very strange.

The settlement to KSIIDC had been done by Sri.Vandevalli Suriraj son in law of Industry minister Sri.Kattasubramanya Naidu. Subsequently after settlement of the dues of KSIIDC the children of Sri.B.S.Yeddiyurappa the current Chief Minister of Karnataka acquired a non banking financial company registered in West Bengal having its registered office at No.29/A, Meston Street, 3rd Floor, Room C-2, P.S.Bowbazar, Culkatta, West Bengal namely Indivar Kutir (P) Ltd., on 30.09.2009 the details of the company as per ROC records are as follows:-
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INDIVAR KUTIR PRIVATE LIMITED
1 Name of the Company Indivar Kutir Pvt., Ltd.,
2 Registration 21- 62625
3 Date of Incorporation 28.03.1994
4 Registered Office of the Company: 29A, Meston Street, 3rd Floor,
Room No-C-2, P.S. Bow Bazar,
West Bengal - 700012.
5. a. Authorised Share Caiptal

b. Paid up Capital: Rs.72,00,000/- divided into 7,20,000/- equity shares of Rs.10/-
Rs.71,67,000/- divided into 7,16,700/- equity shares of Rs.10/-
Particularas of Directors
SlNo. Name & Address Date of Appointment (w.e.f)
1 Athani Channabasappa Chetak
Mathru Krupa, 1234, 34th Cross, 4th Main, T Block, Bangalore -41.
20.03.2009
2. Manakar Prema
10-2-61/2, SB College Road,
Sangameshwar Colongy,
Gulbarga – 585103
30.09.2009
3. Tejaswini Raghavendra
Malerkeri, Shikaripur,
Shimoga – 577 427
30.09.2009

SlNo. Name of Share Holder No of Shares
1 Bhagath Homes Pvt LTd. 696700
2 Mrs., Tejashwani Raghavendra 10000
3. Ms. Manakar Prema 10000
Total 716700

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The intention for acquiring Pvt Ltd company incorporated in other state, which had acquired company in Karnataka is to ensure that the general public and the Government officials do not know the real owners of the company i.e. Ratna Cements (Yadwad) Ltd., who are taking preferential favours in the form of waiver of loan and allotment of mining lease from the Government departments of state of Karnataka.

The company financial statements as at 31.03.2009 reflects share capital including reserves and surplus at Rs.596.81 Lakhs it had a carry forward book loss of Rs.4 Lakhs and had assets in the form of Loans and advances of Rs.608.54 Lakhs. However the paid up shares of the company of 716700 of Rs.10/- each has been transferred at par to Bhagat Homes Pvt Ltd., and others for Rs.71,67,000/-. Thus the company worth Rs.596.81 Lakhs has been acquired for Rs.71.67 Lakhs which is nothing but a sham transaction.

Subsequently this company Indivar Kutir Pvt Ltd acquired the shares of Ratna Cements (Yadwad) Ltd on 30.09.2009 of 32,44,300 shares of Rs.10/- each valued at Rs.3,24,43,000/- thus completing the acquisition of Ratna cements (Yadwad) Ltd.,

The share holding patron, directors list and particulars of Ratna Cements (Yadwad) Ltd are as follows;-





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RATNA CEMENTS (YADWAD) LIMITED
1 Name of the Company RATNA CEMENTS (YADWAD) LIMITED

2 Registration No. 08 – 3518
3 Date of Incorporation 25.04.1979
4 Registered Office of the Company:

Yadwad,Gokak Taluka,
Belgaum Distt
Belgaum-591136
5 a. Authorised Share Capital:


b. Paid up Capital:
Rs. 21,00,00,000/- divided into 2,10,00,000 equity shares of Rs.10/- each

Rs. 19,87,80,800/- divided into 1,98,78,080 equity shares of Rs.10/- each
Particulars of Directors
Sl No.
Name & Address Date of Appointment
(w.e.f.) Remarks
1 Chandra Shekar Chinnappa
No. 45, 1st 'B' Main, Vivekananda Nagar, BSK 3rd Stage, Bangalore-560085
18.04.2007

2 Kilaru Gopi Prasad
77, Srinagar Colony,
Hyderabad, 500073,
Andhra Pradesh
17.10.1995


3 Vandavalli Suriraju
No.90. Srinivasa Nilaya, 2nd Floor,
7th Main, 9th Cross, Malleswaram Bangalore-560003
02.07.2009
SlNo. Name of Share Holder No of Shares
1 Indivar Kutir Pvt LTd. 32,44,300
2 Dr.Suriraj Vanadavalli 32,44,410
3. Others 1,33,89,370
Total 1,98,78,080

On perusal of the financial statements of Ratna Cements (Yadwad) Ltd, we find new promoters i.e. Dr.Suriraj Vandavalli and Bhagat Homes Pvt Ltd and Indivar Kutir (P) Ltd have brought in share application money to the tune of
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Rs. 8.46 Crores, Rs.4.09 Crores and Rs.3.83 Crores for the financial year 2007-08, 2008-09 and 2009-10 totaling in all Rs.16.38 Crores and also they have put in during the same period Rs.68 Crores in the form of un secured loan to company Ratna Cements (yadwad) Ltd totaling in all Rs.85 Crores, which is reflected in the financial statement for the year ending 31.03.2010.

Thus the company Ratna Cements (Yadwad) Ltd., was illegally, fraudulently and deceptively taken over by the Chief Minister children by defrauding the state Government under taking KSIIDC. Subsequently the company entered in to one more adventure in the form of illegally acquiring mining lease for limestone in an area of 1417.5 Acres in Yadwad Village, Gokak Taluk, Belgaum District during the regime of Chief Minister B.S.Yeddiyurappa as follows;-

One S.N.Singit s/o Narayana Singit had obtained mining lease No.1828, sanctioned on 1.7.1982 for an extent of 2167 Acres of mine area in Yadwad Village, Gokak Taluk Belgaum District, for raising lime stone, the basic raw material for Cement Industries. The lease was for a period of 20 years. Ratna Cements (Yadwad) Ltd., incorporated on 5.4.1979 was taken over during 1996 by S.N.Kilaru and his son K Gopi Prasad, close associates of Andhra based BJP Leader indirectly getting political patronage from Karnataka, being repeatedly elected to Rajyasabha.

S.N.Singit has filed application for renewal of mining lease to Director Mines and Geology, Mines and geology, on 12.7.2001. In the application it is mentioned that the applicant is an Individual along with the application S.N.Singit failed to enclose the sketch of (map) the mining area to be
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renewed. Hence the department issued a notice on 26.6.2002 to furnish maps. S.N.Singit did not care to submit the requisite maps. An endorsement was issued on 27.2.2007 by DMG stating that the application for renewal cannot be considered as he has failed to submit the required documents.
Immediately thereafter Ratna Cements (Yadwad) Ltd has given undertaking letter dated 13.4.2007 to the DMG, that they will be paying the arrears if any held in the name of the company even though the mining lease was not in the name of Ratna Cements (Yadwad) Ltd and further Ratna Cements (Yadwad) Ltd has made an application for renewal of mining lease to DMG on 12.4.2007 enclosing copy of the sketch, covering mining area of 1417.5 Acres, income tax clearance certificate even though Ratna Cements (Yadwad) Ltd was not the original mining lease holder.

At this stage the Depart of Mines & Geology started taking action in gross violation of the mining rules under MCR 1960 at the instance of Sri.B.S.Yeddiyurappa the then Deputy Chief Minister, whose family members had interest in acquiring both Ratna Cements (Yadwad) Ltd and the vast limestome mine area.

The Assistant Commissioner, Bylahongala Sub Division in his letter dated 12.5.2008 to the Deputy Commissioner, has narrated that Ratna Cements (Yadwad) Ltd had dues of Rs.1.85 Crores to the commercial tax department as on 08.9.2004 and thereafter they have paid only 16.53 Lakhs as on 14.8.2007 and an amount of Rs.1.68 Crores has been illegally exempted during 2007 and that renewal of mining lease is not appropriate. The point that should be noted is that B.S.Yeddiyurappa was the Finance Minister, when this exemption has taken place.
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Ratna Cements (Yadwad) Ltd, have paid on 2.7.2007 Rs.91.54 Lakhs the dues to the mines and geology department towards the mining lease No.1828 held by S.N.Singit even though Ratna Cements (Yadwad) Ltd was not the lease holder of mine and this has been done at the instance of Sri.B.S.Yeddeiyurappa when he was Deputy Chief Minister and Sri.Katta Subramanya Naidu.

The Director, Mines & Geology, in his letter dated 16.10.2009 to the Secretary to Government, Mines Department, has reported that the Lessee has filed application on 12.7.2001 for renewal of mining lease belatedly by 12 days and has recommended to condone the delay suppressing the fact of issual of endorsement rejecting the application on 27.2.2007. thereafter at the behest of B.S.Y. as his children had taken over control of Ratna Cements (Yadwad) Ltd through their children promoted company namely Indivar Kutir Pvt Ltd., to the secretary to Government to condone delay vide GO No.355/MMN/2009 dated 4.11.2009 even though Ratna Cements (Yadwad) Ltd is not the original lease holder of the mine area. Further Director, Mines and Geology department has illegally permitted to carryout mining by allowing working permission for a period of 6 months vide letter dated 19.11.2009 to Ratna Cements (Yadwad) Ltd, even in the absence of permission from the Ministry of Environment Clearance and Forest, Government of India and without fixing of 1417.5 Acres of area by joint measurement of various authorities, which in fact was held on 18.2.2010.
BSY has misused his office right from April 2007 to fraudulently obtained about 1417.5 Acres of prime limestome area, at Yadwad Village, Gokak Taluk, Belgaum Distric, to confer favour to his children held company namely Ratna Cements (Yadwad) Ltd.
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The following documents are enclosed to justify illegality and the favours done to Ratna Cements (Yadwad) Ltd.,

1. Financial statement of Indivar Kutir P Ltd., and Share holding pattern.
2. financial statement of Ratna Cements (Yadwad) Ltd and share holding pattern, including copy of annual return for share transfer to Indivar Kutir Pvt Ltd,
3. details of loan obtained from KSIIDC of Rs.4 Crores during 1996, by Ratna Cements (Yadwad) Ltd.
4. Detail note on one time settlement of KSIIDC as per notes to accounts of Ratna Cements (Yadwad) Ltd.
5. Application of S.N.Singit dated 12.7.2001 applied in individual capacity for renewal.
6. Endorsement dated 27.2.2007 rejecting the application by DMG.
7. Application of Ratna Cements (Yadwad) Ltd dated 12.4.2007 for renewal of mining lease, even though they were not original mining lease holder.
8. Report of Assistant Commissioner, Bylahongala, dated 12.5.2008 regarding illegal waiver of commercial tax dues of Rs.1.63 Crores to Ratna Cements (Yadwad) Ltd,.
9. Recommendation by DMG in letter dated 16.10.2009 to the secretary Mines, condoning delay of 12 days, suppressing the fact of issual of endorsement dated 27.2.2007 rejecting renewal application.
10. Government order GO No.355/MMN/2009 dated 4.11.2009 condoning delay even though Ratna Cements (Yadwad) Ltd was not the original lease holder.
11. illegal issual of working permission to carryout mining by DMG vide order dated 19.11.2009 to Ratna Cements (Yadwad) Ltd in the absence of permission from Government of India, Ministry of Environment Clearance and Forest.