JSW Steel has strongly refuted the allegations made by the Karnataka Lokayukta on the company procurement and transportation of iron ore in the State.
The company is not looking at a legal recourse on the issue for now but may do so in future, Mr M.V.S. Seshagiri Rao, Deputy Managing Director, JSW Steel, told newspersons here on Thursday.
Senior officials of JSW including Mr Rao commented on Lokayukta allegations, almost 10 days after the report on illegal mining in Karnataka was released by the State ombudsman, which led to the resignation of Chief Minister Mr B.S. Yeddyurappa.
The report had indicted JSW Steel and another group company – South West Minerals Ltd – for allegedly procuring and transporting illegally mined iron ore and other transactions.
“We are appalled and concerned with the untenable conclusions drawn in the report. The company is ready for scrutiny by appropriate authorities,” he said.
‘Paid full price'
Stating that every tonne of the iron ore bought by JSW was against purchase orders and requisite documents, Mr Rao said the company has paid full price to seller as per the terms of purchase order.
On the contrary, Mr Rao claimed that JSW Steel has been the aggrieved party as even after making investments of over Rs 33,500 crore in Karnataka, the company still does not own any captive mines. “We have been waiting for allocation of mines for the past 15 years even after such a large investments based on assurances,” he said.
JSW buys ore from miners such as NMDC and Mysore Minerals Ltd and half of its requirement comes from outside Bellary district. JSW has scaled up its steel capacity from 1.5 million tonnes per annum in 1997 to 10 mtpa recently. Post the Lokayukta allegations, the JSW Steel scrip has shed over 20 per cent on the BSE.
Output cut
Replying to a query, Mr Rao said the company has curtailed production by 30-35 per cent due to the shortage of iron ore. The Supreme Court last week imposed a ban on mining in Bellary district on environmental grounds, which has created a shortage of iron ore for JSW and other steel makers in the district.
On allegations of collateral benefits in obtaining mining concessions, Mr Rao said, “When JSW Steel does not have any mine allocation even after several years of its substantial investment; conjuncture of collateral benefit is a mere speculation.”
On payments made
The Rs 20 crore paid to an education trust run by family of Mr Yeddyurappa, was for the construction of an auditorium, which was to be named after the company founder O.P. Jindal. “This contribution was made after satisfying that these institutions are professionally managed,” Mr Rao said, adding that the group spends about 1.5 per cent of its net profits towards CSR activities.