Hyderabad, Apr 4 UNI | 4 months ago

Sitting Rajya Sabha member KVP Ramachandra Rao, a close associate of late Andhra Pradesh chief Minister YS Rajasekhara Reddy, has been named in Titanium Mine scam by a US grand jury.

Rao, along with Ukrainian industrialist Dmitry Firtash and four others, have been named for their suspected roles in an $18.5 million scheme to bribe Indian officials for a titanium mining contract in Andhra Pradesh, the US Justice Department said recently.

Dr KVP, allegedly the king pin of all the wheeling and dealing in the 6-1/2 years of Dr YSR regime, was a class mate of YSR from his Gulbarga medical college days. Ironically both doctors had played major role in politics.

"Rao abused his position as an official of the State of Andhra Pradesh and close advisor to Chief Minister YS Rajasekhara Reddy to solicit bribes for Indian public officials, including himself, in return for approval of licenses for the project; (ii) agreeing to accept bribe money, including bribe money for his own benefit, in return for the approval of licenses for the project; and (iii) warning fellow enterprise members concerning the threat of a possible law enforcement investigation of the project,' reads the Federal Indictment dated April 2.

Mr Firtash, arrested in March in Austria was allegedly the mastermind behind the multimillion-dollar scam, said US Justice Authorities in Chicago. He had also allegedly met YSR to discuss a joint venture between his company and the state government.

According to the federal indictment, it all began in 2006, when Ramachandra Rao and five other defendants, allegedly conspired to pay at least $18.5 million to Indian officials in bribes to secure licenses to mine minerals in Andhra Pradesh. The mining project was expected to generate more than $500 million annually from the sale of titanium products, including sales to an unnamed 'Company A,' headquartered in Chicago.

Among the companies involved in the conspiracy was Group DF Limited, a British Virgin Islands company controlled by Ukrainian billionaire Dmitry Firtash. Group DF companies include: Ostchem Holding AG, an Austrian company in the business of mining and processing minerals, including titanium; Global Energy Mining and Minerals Limited, a Hungarian company, and Bothli Trade AG, a Swiss company, for which Global Energy Mining and Minerals was the majority shareholder.

In April 2006, Bothli Trade and the Andhra Pradesh government agreed to set up a joint venture to mine various minerals, including ilmenite, a mineral that may be processed into various titanium-based products such as titanium sponge.

In February 2007, Company A entered into an agreement with Ostchem Holding, through Bothli Trade, to work towards a further agreement that would allow Bothli Trade the ability to supply 5 million to 12 million pounds of titanium sponge from the Indian project to Company A on an annual basis. The mining project required licenses and approval of both the Andhra Pradesh state government and the central government of India.

According to the indictment, the defendants 'used US financial institutions to engage in the international transmission of millions of dollars for the purpose of bribing Indian public officials to obtain approval of the necessary licenses for the project.' They allegedly financed the project and transferred and concealed bribe payments through Group DF, and used threats and intimidation to advance the interests of the enterprise's illegal activities.

Firtash, the indictment said, was the leader of the enterprise and he allegedly met with Indian government officials, including then chief minister YS Rajasekhara Reddy, to discuss the project and its progress, and authorized payment of at least $18.5 million in bribes to both state and central government officials in India to secure the approval of licenses for the project.

Firtash also allegedly directed his subordinates to create documents to make it falsely appear that money transferred for the purpose of paying these bribes was transferred for legitimate commercial purposes, and he appointed subordinates to oversee efforts to obtain the licenses through bribery.

The indictment also named Gajendra Lal, 50, an Indian national and permanent resident of the

UNIted States, who was allegedly the fixer and who recommended whether, and in what manner, to pay certain bribes to government officials.

The indictment lists 57 transfers of funds between various entities, some controlled by Group DF, in various amounts totalling more than $10.59 million beginning April 28, 2006, through July 13, 2010.

Responding over the reports, Dr Rao today said that he will be able speak only after any Indian agency tells him about the crime he has committed.

While talking to an electronic media, he said, "I am not aware of any such deal and I will respond only after I see why the US Justice department has indicted me."

(Posted on 04-04-2014)