Conflict of Interest, Forgery Charges Cloud Newly-Inducted Karnataka Minister

Serious allegations of corruption and financial impropriety as well as conflict of interest have come back to haunt Murugesh Nirani, a senior state BJP leader and Karnataka’s new industries minister. 

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Mumbai: Even as the Bharatiya Janata Party seeks to make a fresh start in Karnataka with a new chief minister, Basavaraj Bommai, at the helm, corruption charges against a key member his cabinet already loom large.

Serious allegations of corruption and financial impropriety as well as conflict of interest have come back to haunt Murugesh Nirani, a senior state BJP leader and Karnataka’s new industries minister.

Last Tuesday, a local court in Bengaluru heard arguments for a fresh probe by the Anti-Corruption Bureau (ACB) into allegations against Nirani along with former Karnataka chief minister B.S. Yeddyurappa and two others on charges of forging an industrialist’s signature and cheating him of a 26-acre government plot allotted to him for a construction project.

The complainant has alleged that the actions of the four accused qualify as corruption, forgery, cheating and criminal conspiracy, under Sections 418, 465, 468 and 471 of the Indian Penal Code, 1860 and Section 13(1)c and 13(1)(d)(ii) of the Prevention of Corruption Act, 1988.

The Wire tried to reach Nirani and his aides through phone calls and text messages, but they did not respond to requests for comments.

The industrialist, Alam Pasha, Bengaluru-based founder of realty company Pash Space International Private Limited, had in April 2011 lodged a complaint against Nirani, BSY and two bureaucrats – former Karnataka principal secretary V.P. Baligar and Shivaswamy, former managing director of the Karnataka Udyoga Mitra, the state’s nodal agency for investment.

According to the complaint, Pasha’s firm had signed a Memorandum of Understanding (MoU) with the Karnataka government to develop low-cost homes in the Devanahalli Industrial Area, near Bengaluru’s Kempegowda international airport during the Karnataka government’s Global Investors Meet in June 2010.

Following this, the state government’s State High Level Clearance Committee (SHLCC), later that month, approved the allotment of 26 acres of acquired land for Pasha’ project. The project was to cost Rs 600 crore and was likely to create jobs for 500 persons, according to Karnataka government documents reviewed by The Wire.

Nirani was Karnataka’s industries minister at the time.

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“(Following the approval) The company started entering several strategic business partnerships with funding agencies, financial institutions, architects and several intended buyers for the purpose of implementing the project,” Pasha, in his criminal complaint, said.

Seven months later, a letter dated January 20, 2011, purportedly written by Pasha, was sent to the Karnataka Udyoga Mitra, declaring that “we are not interested to continue with the proposed project proposal,” asking the authorities to “cancel the allotment (of land)”.

Even though the Karnataka Udyoga Mitra received the letter only on February 1, the SHLCC, on January 24, approved a proposal to cancel the allotment to Pasha’s company. The same plot of land, then, was de-notified and private owners were allowed to sell the land at market rates, resulting in a windfall of profits.

In his complaint, Pasha alleged that a forged letter was created using his signature and his company’s letterhead, stating that he was withdrawing from the project on those lands.

Pasha’s complaint was filed in court, which then asked the Lokayukta to investigate. But in 2016, the additional city and civil court in Bengaluru quashed the Lokayukta’s complaint, citing a report filed by the superintendent of police which had claimed there was no evidence against Nirani.

However, the noose is now tightening.

In March this year, a Karnataka high court bench headed by Justice Michael Cunha, hearing a petition filed by Pasha, restored the case against the minister. The bench said that the lower court’s order letting off Nirani. was “perverse, whimsical and cannot be sustained”, opening the doors for the case against Nirani and Yeddyurappa to be re-opened.

On Tuesday, a city court decided to adjourn the matter till September, but advocate P.N. Hegde, appearing for Pasha, said that he would be pushing for an investigation by the Anti-Corruption Bureau (ACB). “We are pushing for a time-bound probe by the ACB,” he told The Wire, adding that he hopes that such a probe can be finished in 3-5 months, after the court’s nod.

This isn’t the only trouble that Nirani faces.

Pasha’s complaint also levels serious allegations against Nirani, an industrialist himself, for conflict of interest and financial impropriety.

Documents cited by Pasha and reviewed by The Wire indicate that Nirani, as industries minister at the time, had presided over the Karnataka government’s Global Investors Meet in 2010 and subsequently oversaw the transfer of vast tracts of government-acquired land to companies owned by him and his family.

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In the meet held in June 2010, at least three companies with ties to Nirani or his family – MRN Sugars and Power Limited, Nirani Sugars Limited and Shakti Steel and Power Industries – signed MoUs with the Karnataka government, proposing to set up projects in exchange for government-acquired land with developed infrastructural facilities like water supply and power, as well as fast-track clearances and approvals for the project.

MRN Sugars and Power Limited, for instance, proposed a Rs 300-crore sugar plant with co-generation of power in the state’s Bijapur district. Nirani Sugars proposed to invest Rs 290 crore for expansion of cane crushing capacity at a plant in Mudhol, Bagalkote, where Nirani hails from. Shakti Steels and Power Industries promised an investment of Rs 1500-crore to set up an integrated steel plant. Similarly, the Karnataka government also signed an MoU with Sri Sai Priya Sugars, for a project worth Rs 300 crore for which the company was allotted 200 acres. Between all four, the Nirani family-run businesses were allotted over 1100 acres of land. According to news reports in the Times of India, three companies – MRN Sugars and Power Limited, Shakti Steel and Power Industries and Shri Sai Priya Sugars – were either dormant or unregistered during the signing of the MoU.

Rise and rise

Nirani has steadfastly maintained a prominent role in Karnataka politics ever since 2004, when he first won on a BJP ticket from Bilagi, in Bagalkote district.

In fact, Nirani has served as a minister in nearly every BJP government in the state since the first government in 2008 under Yeddyurappa. The one time, in 2019, when he wasn’t made a minister, a seer from Nirani’s Panchamasali Lingayat community, publicly threatened BSY if Nirani wasn’t inducted into the cabinet, at an event where the CM was present. An incensed BSY had a public spat and threatened to walk away from the event. In January this year, Nirani was inducted into his cabinet.

But last month, as speculation swirled around BSY’s fate, there was considerable speculation in the local media that Nirani was a “front-runner” in the race to be the state’s next chief minister. Nirani had been making frequent trips to New Delhi, ostensibly to meet senior BJP leaders – he is said to have met Union home minister Amit Shah at least twice within a month’s time. In fact, two days before BSY quit, Nirani was in Delhi to meet senior BJP leaders. On Wednesday, Nirani was in New Delhi, again; his Twitter timeline showed he had met Union jal shakti minister Prahlad Joshi and health minister Mansukh Mandaviya, among others.

Nirani’s time in power has been anything but smooth and problem-free.

Apart from these complaints, Nirani has constantly courted controversies. In April this year, former BJP Union minister Basangouda Patil Yatnal alleged that Nirani, among others, had “blackmailed” BSY with ‘some incriminating CDs’ in order to become ministers.

Last month, Congress leader H.N. Ravindra filed a complaint with the anti-corruption bureau in the state, alleging that Nirani Sugars had violated several norms of a government lease for running a sugar factory. Nirani’s son, Vijay, the managing director of the company, had denied the allegations and called them “baseless.”

In 2010, Janata Dal (Secular) leader H.D. Revanna had played a four-minute video clip which, he alleged was of Nirani’s personal secretary extorting Rs 20 lakh on behalf of Nirani from an entrepreneur who wanted land to set up an industry.

Pasha, whose efforts have now re-opened his origina; complaint, believes that Nirani’s appointment to the cabinet might harm the process of investigation. “I request chief minister Basavaraj Bommai to ensure that all the files related to these complaints are taken into his custody, since Nirani, as the industries minister, will be able to access and manipulate the files,” he said.

Bommai did not respond to calls and messages from The Wire.

Kunal Purohit is an independent journalist, writing on politics, gender, development, migration and the intersections between them.