Business

How India’s Largest Beach Sand Mineral Exporter Got to Where He Is

S. Vaikundarajan has been accused of large-scale illegal mining, a charge he denies, though he admits to using all sorts of methods to tackle those who stand in his way.

S. Vaikundarajan. Credit: Sandhya Ravishankar

S. Vaikundarajan. Credit: Sandhya Ravishankar

Chennai: As S. Vaikundarajan bustled into the office of the Chennai bureau of the Economic Times in January 2015  in response to a request for an interview with this reporter, it was hard not to stare. The 58-year-old founder chairman of VV Mineral, the country’s largest miner and exporter of rare earth minerals – garnet, ilmenite and rutile – is a crorepati many times over, yet clad in a thin white cotton shirt and a veshti (dhoti in Tamil). His feet were bare. He is polite to a fault and addresses everyone, young or old, with respect. As he began speaking about himself in his booming voice, his audience was enthralled. It is easy to see why “Annachi” (elder brother as he is called by those who work with him) is both worshipped and feared  in his southern fiefdom of Tirunelveli.

“You can go ahead and record this,” he waved, a picture of nonchalance. “Ask me anything, I am prepared to answer.”

Money seems to be second nature to Vaikundarajan. He remembers the exact amounts of deals struck even two decades ago. Ambition burns bright in him as he details how he single-handedly pushed for and changed the Indian government’s rare earth mining policy about two decades ago, despite the public sector Indian Rare Earths Limited (IREL) vehemently opposing the move.

“I asked Thiruvattar MLA Appu Nadesan, a friend of mine, to write a letter to the Ministry of Mines asking them to allow private players to enter rare earths mining,” said Vaikundarajan. “The ministry directed the Indian Bureau of Mines to study the issue and give them a report. They studied the whole area for nine months and gave a detailed report on how many tonnes of minerals was wastefully going back un-utilised into the sea,” he said.

Vaikundarajan and his aide Yesu Selvan then decided to head to Delhi. “Appu Nadesan was a naïve man, he would never lie,” smiled Vaikundarajan. “He asked me to join him in the meeting. Both Yesu Selvan and I went in the guise of his PAs and spoke in the meeting. IREL said they are protecting their 700 employees by not allowing [the] private sector into the field. Then we convinced them that our mineral wealth is going away to Sri Lanka through the sea and we are losing out. The minister understood. He said India’s mineral wealth should not go to another country and that private players too should mine. That is how the policy got changed,” he explained.

Vaikundarajan’s telling of the tale is indicative of the way he handles his chosen profession. Rivals abound but a rustic grit and quick thinking have helped Annachi either crush them or make them join forces with him. So much so that out of a total of 64 licences to mine beach minerals in the country, 45 belong to Vaikundarajan. Most others belong to his brothers. And he said that his rivals have fuelled him and made him who he is.

Over 200 criminal cases and at least 150 civil cases have been slapped on Vaikundarajan over the years, by his own admission. Not once has he faced arrest. Rival businessmen, instead, have either sold out to him or gone down fighting.

“A rival who I was fighting, Paul Durai, said he wanted to sell his land to me,” said Vaikundarajan. “Before that he had even filed police complaints against me. He fed me cake at his house – that was the first time I had eaten a cake with raisins and I couldn’t believe that such cakes could exist. After we ate, he told me that he wants to sell his land. He said his auditor and others had told him that I (Vaikundarajan) am a moradan (rough, thug-like) but that I am true to my word,” he said.

When Vaikundarajan tried to buy a mine in Andhra Pradesh, the owner refused to sell it to him, calling him a “criminal”. Vaikundarajan says he agreed with the other man’s assessment. “Yes I am a criminal,” he recounted as having told the mine owner at the time. “But your guys started it. I only defended myself.” His ethos is an earthy one: “I have a principle – if you simply carry on with your business I will not bother you, I will go my way. But if you cross my path I will not spare you, I will give as good as I get. By that definition yes, I am a criminal,” said Vaikundarajan.

During the initial stages of his business, a senior miner refused to allow VV Mineral trucks to use the path running through his lands. “I had a small plot in which I was mining and the surrounding 40 acres belonged to him,” said Vaikundarajan with a twinkle. “He said you cannot go inside. So what did I do? I bought 400 acres around his 40 acres of land and then told him he cannot go inside,” he laughed heartily.

S. Vaikundarajan in Chennai, 2015. Credit: Sandhya Ravishankar

S. Vaikundarajan in Chennai, 2015. Credit: Sandhya Ravishankar

In a 2014 CBI probe involving the disproportionate assets of Tuticorin Port Trust chairman Subbaiah, Vaikundarajan moved court for anticipatory bail fearing arrest. He got it and has been questioned by the CBI since. “In 2008 I made an agreement with Subbaiah’s mother to buy her land,” he explained. “I gave an account payee cheque – no one who is bribing will pay by cheque. The land value was around Rs 4 crore but I gave more because I wanted him to change the land classification. I really wanted that land because it has 2.5 million tonnes of limestone. I have an unofficial report on this and only I knew it. If the land classification is changed I don’t have to go to Delhi, so Rs 8.5 crore is very cheap for me,” he shrugged.

Vaikundarajan frankly admits that its no holds barred when it comes to getting results. “In 2002, based on a false complaint, the government asked me to stop mining because I did not have environmental clearance,” he said. “I got a stay in court. You cannot imagine the kind of money asked by the enviro sciences officials – Rs 25 to 30 lakh per lease to prepare a report! I had a large number of leases so we discussed what to do. My brother said whether it is right or wrong you go give the money and get the clearances. They (officials) said you have to give 60% upfront, 20% on preparation of report and 20% on report being cleared. I didn’t have a choice and I paid the money and got it. I am the only company to have environmental clearances in CRZ land.”

About 7-8 years ago, Vaikundarajan went head to head with a secretary in the Ministry of Mines, he says. “Normally, to approve a file in the ministry it costs around Rs 15 lakh to Rs 20 lakh,” said Vaikundarajan. “When I met this secretary I offered him Rs 25 lakh. But he said no, there are 15 files here so you give me Rs 15 crore. I said Rs 15 crore is not possible. This secretary rejected the files,” he said. Annachi won this battle too, in his own words, by destroying conspiracies and having his day in court.

Now Vaikundarajan has set his sights on pushing the government to allow private players to mine monazite, an atomic mineral currently mined only by the Centre’s IREL. He is litigating against the government asking for licences, having filed two suits in 2013 in the Madurai bench of the Madras high court, which challenged the Department of Atomic Energy’s rejection of his applications to mine the mineral from which the nuclear fuel, thorium, is produced. “I only want to mine the rare earth oxide from the monazite,” argued Vaikundarajan. “The rest we will give it to the government. We will give uranium mined as yellow cake itself to the authorities. Then India will not have to import uranium ever again. We will do the same thing with thorium. I said I have 80 acres of land which is superb and safe, I shall store the thorium underground as per your rules. The note was prepared accordingly. On the fifth day, stories came out in the papers and the GoI cancelled the plan. That is the reason I had to go to court over this.”

Cut-throat business rivalry

Former Congress MP Dhanushkodi Adithan was an early miner who exported raw sand, one of Annachi’s first rivals, and when contacted, he was reluctant to speak on the subject. “He has crores of money, there is no one in the south like that,” he said haltingly. “He is powerful because of money. So his word is law. Any government will kowtow to him. Everyone lives in fear in the area. He divides and rules in the villages where he operates,” he said.

This claim is backed by environmentalists in the area who are familiar with Vaikundarajan’s modus operandi when it comes to getting mining leases along the coast. “These people (Vaikundarajan and his brothers) have been buying up a number of villages along the southern coast. The panchayat president is the authority to give permission for anything from a shrimp farm to mining or any project at the village level. So these people simply pay some amount to the panchayat leaders and fund some local functions or pay ‘salaries’ to locals without any work and thereby any opposition is stifled,” said Probir Banerjee, president of the non-profit PondyCAN, an expert in coastal issues.

The biggest thorn in Vaikundarajan’s side is Dhaya Devadas, miner and exporter of river sand garnet. The two have been battling for a slice of the rare earth mining business for almost two decades. Vaikundarajan says that he has defended himself against Devadas’s onslaught for the past two decades and only recently has gone on the offensive. “But we will pick fights too with our rivals,” said Vaikundarajan. “There is a saying that if there is 51% right on your side then you should fight and if there is 51% of right on your rival’s side you should back down. That is why we fight. If everyone has come and everyone has fallen at my feet but only this man is constantly opposing me that means enmity is soaked into his blood,” he said. Devadas refused to comment on Vaikundarajan as cases against him are currently under trial.

Vaikundarajan’s ire has also been turned on geologist Victor Rajamanickam, the petitioner who filed the 2015 PIL against him. He claims that he has proof of alleged corrupt practices committed by Rajamanickam in his capacity as a geologist with government agencies and as a professor at Thanjavur University. Rajamanickam denied these claims and said that his one-time friend Vaikundarajan has now changed. “He is a very hard worker, he is immersed in his business for 24 hours,” said Rajamanickam. “There are two faces to Vaikundarajan. He is a very very human person. He behaves in a very respectful manner with old or young, officials and you won’t find any animosity in him. His other face is that of cruelty – he is always aiming to punish. An eye for an eye, a tooth for a tooth. That is why people are afraid of him. The more he welcomes you, the more he is going to punish you,” he said.

Vaikundarajan’s modus operandi when faced with trouble, is to try and induce cooperation and if that cannot be accomplished, threats follow. If that too does not work, he will file a string of legal cases and ensure slander and doubt envelop the person he is up against.

The case of the present animal husbandries and fisheries secretary of Tamil Nadu and senior IAS officer Gagandeep Singh Bedi confirms this. In 2013, when then chief minister J. Jayalalithaa banned beach sand mining in the state and ordered a probe, Bedi was appointed head of the special committee to conduct the probe. He was then the state’s revenue secretary.

In 2014, VV Mineral and Transworld Garnet India, companies owned by Vaikundarajan, filed cases in the Madras high court alleging bias against Bedi and demanding that he be removed as the chairman of the committee. Vaikundarajan referred to Bedi’s tenure as Kanyakumari district collector in 2002, when action was taken against VV Mineral’s alleged illegal sand mining. He also produced documents to show that Bedi, in his capacity as collector, had refused to accord clearance for a mining lease. Bedi and the state government denied all charges in court, detailing the procedure of verification of mining leases using a multi-layered process, which made the procedure transparent and fair. “I have no grudge against Mr S. Vaikundarajan as alleged or at all,” the beleaguered bureaucrat submitted in court in November 2014.

In August 2015, Justice T. Raja ruled that Bedi be removed as head of the committee and replaced by a retired judge. In September 2015, a two-judge bench comprising the chief justice of the Madras high court Sanjay Kishan Kaul and Justice T.S. Sivagnanam issued a stay on Bedi’s removal. But the final report is yet to be submitted to the state government as there is a stay on that too in another case. While field inspections by the committee are over, verifications are yet to be compiled for the districts of Trichy and Madurai, according to the state industries department.

Dhaya Devadas’s battle with Vaikundarajan began in 2000 – when he lost a mining lease after “bitter litigation” with Vaikundarajan and his brother Jegadheesan. Devadas then began sending complaints to various departments alleging illegal sand mining by Vaikundarajan and family. Vaikundarajan hit back with a slew of complaints and court cases. Vaikundarajan, with more political muscle, won the war. In 2011, Devadas’ mines were shut down by the state government.

Apart from Vaikundarajan’s ongoing furious rivalry with Devadas, the miner is also estranged from his brothers Chandresan and Kumaresan. Vaikundarajan himself admits in his affidavit before the high court in March 2015 while disputing allegations about his links with a company called Industrial Mineral Company: “This is an entity belonging to my estranged brother Mr Chandresan against whom I have had arbitration proceedings over division of properties. The division is complete and we are no longer together,” he says.

The bitterness with Kumaresan goes back a long way. Kumaresan is the eldest son of their father’s first wife.  On August 28, 2016, Kumaresan held a press meet in Chennai asking the Jayalalithaa government to take action against his stepbrother Vaikundarajan. Kumaresan said he had evidence to prove his allegations although he did not present these to the reporters present. Vaikundarajan issued a press release the following day, stating that his stepbrother was a schizophrenic and denying all the allegations he had made.

The code of the south

While a slight is not forgotten, neither is a good turn. Vaikundarajan’s sense of loyalty is deep rooted and almost feudal. Rajan, a friend who lent him money during a time of need has not been forgotten even now. Vaikundarajan admits he spent Rs 1 crore to help Rajan win a diocese election.

The same Rajan loaned him a broken down generator to help load his first shipment during the power-starved early 1990s. “We worked through the night and somehow loaded the shipment,” says Vaikundarajan. “My brother went and bought a new generator in the morning and said we could return Rajan’s generator. I said no way. It is the raasi (good luck) of the generator that our first shipment went on time. I will buy Rajan a new generator instead.” Vaikundarajan claims he still has that generator.

S. Vaikundarajan in Chennai, 2015. Credit: Sandhya Ravishankar

S. Vaikundarajan in Chennai, 2015. Credit: Sandhya Ravishankar

Vaikundarajan’s climb has been nothing short of phenomenal considering his humble beginnings. Educated only upto class 12, with no knowledge of English until his later years, his grit and wit have stood him in good stead. Following a fallout with his family over the ownership of his father’s rice mill, Vaikundarajan headed out in a huff with his pregnant wife and sought shelter in a broken down godown on his father’s property. His friends gave him a business idea – to sell ration shop rice that would fall off the back of a lorry. The local tehsildar who was a friend helped Annachi in this lucrative business.

With his earnings as a rice seller, Vaikundarajan built his own rice mill. By this time, the family feud was over and he decided that he could not compete with his own father in the same business. Annachi shut his rice mill down. Friends and advisors then introduced him to beach sand mining.

Vaikundarajan’s father A.S.V. Subbaiah Nadar appears to have been an enormous influence in his life. Vaikundarajan’s voice softens as he speaks of his father and an incident during his younger years when he helped him with the rice mill. To avoid the power quota of 200 units imposed in that era, Vaikundarajan says he tried to circumvent it by reversing the meter so the rice mill could run for more than 10 days. “On the 11th day my father was astonished – he asked me how come the rice mill was still running despite our quota getting over. I told him I had reversed [the meter]. My father was shocked – he said I had done a great wrong. He said that wealth accumulated by thieving will destroy the whole clan. He asked me how much I had reversed it by and I said by around 200-220 units or so. So he calculated the cost of the stolen power which was Rs 1.50 per unit and also penalised me 50 paise per unit stolen as punishment. He said donate that entire sum to the temple,” smiled Vaikundarajan.

He also talks of his father’s code which he follows religiously. “My father was a very honest man. He always told us that we should never get into businesses like liquor and cinema. He used to say that the income from these will never profit the next generation. The Dharmaneedhi that the Mahabharatha talks about – that is what my father always followed,” he said.

Vaikundarajan denies allegations that he is a benami of former chief minister Jayalalithaa. To questions of his shareholdings in Jaya TV and Midas Distilleries, both owned by close aides of Jaya’s confidante Sasikala, he replies that he owns shares in a lot of companies and these are only some of them.

He spoke of his policies towards his employees, the larger than life ‘benefactor’ who provides free health cover and has built hospitals in the villages where he operates. He also spoke of his VV College of Engineering in Tirunelveli which takes no capitation fees and in fact, charges less than the government-prescribed fees.

As he left the building, he responded to a query on why he does not wear chappals. With an impish smile, Annachi says that his father had only allowed one pair of chappals to each of his sons. Vaikundarajan lost three pairs. His father then refused to buy him one more. An incensed Vaikundarajan swore that he will never wear chappals again in his life. He remains true to his word even today.

But what rises dizzily, must fall someday. And so it is with Vaikundarajan, who commands a monopoly over the lucrative beach sand mining sector in the country. As the Madras high court unearths more dirt during hearings in the suo motu PIL in which Vaikundarajan and his brothers stand accused, and as the Centre and the state governments turn against the miner, a crackdown appears to be in the offing. Vaikundarajan, son of Tirunelveli’s soil, is quite likely a worried man today.

Sandhya Ravishankar is a Chennai-based journalist who has been investigating illegal beach sand mining for years. She tweets at @sandhyaravishan

  • Alok Asthana

    Almost every rich man of India is a Don. What a shameless administration, to sell out to crooks.

  • You are Mad

    Really it is still happening in state claimed to most modern and literate.