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Informist, Tuesday, Oct. 7, 2025

 

NEW DELHI – The Supreme Court on Tuesday refused to quash money laundering proceedings against JSW Steel Ltd. and its officers in an illegal mining scam involving Obulapuram Mining Co. Pvt. Ltd., owned by former Karnataka member of legislative assembly and Bharatiya Janata Party leader G. Janardhana Reddy. The apex court said JSW Steel can go to the appellate tribunal under the Prevention of Money Laundering Act, 2002 to challenge the attachment of its bank account.

 

In 2009, JSW Steel had entered into an agreement with Obulapuram Mining, in which the latter had to supply iron ore. JSW Steel had already made advance payments of about INR 1.30 billion to Obulapuram Mining for the supply of iron ore.

 

Between November 2009 and March 2010, Obulapuram Mining supplied iron ore worth INR 294 million to the petitioner JSW Steel. However, since Obulapuram Mining's operations were subsequently suspended, it could no longer make the supplies. Thus, between April 2010 and January 2011, Obulapuram Mining requested JSW Steel to set off 25% of the monies paid in advance against supplies made by its sister concerns. Consequently, when Obulapuram Mining's sister company Associated Mining Co. and other such entities supplied ore to JSW Steel, a portion of the amount due from Obulapuram Mining was set off by adjusting the amounts.

 

In 2014, an arbitral tribunal noted the failure of Obulapuram Mining to make iron ore supplies and asked it to give INR 354.40 million to JSW Steel. Therein, Reddy said that due to the inability of Obulapuram Mining to supply iron ore from its mines, the parties had agreed to adjust the supplies through sister concerns of the company, which was Associated Mining and other companies. Thereafter, there was an arrangement agreed to between the parties that JSW Steel would retain 25% of the total dues for which Associated Mining had been supplying, and offset the same from the advance paid by JSW Steel to Obulapuram Mining. 

 

Amidst these developments, the Central Bureau of Investigation had registered a case against Reddy and his companies in 2011 related to illegal mining. While the CBI did not arraign JSW Steel as an accused, the Enforcement Directorate had attached the company's bank account. In 2022, the Enforcement Directorate filed a prosecution complaint against JSW Steel for having operated its bank accounts, while they were attached by the agency. Further, the probe agency registered a case against JSW Steel alleging that it had received supplies of illegally mined ore from Associated Mining and had not paid for it, therefore, the money owed by the petitioner to the company qualified as proceeds of crime. 

 

At 1255 IST, shares of JSW Steel were up 0.4% at INR 1,165 on the National Stock Exchange.  End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Reported by Surya Tripathi

Edited by Vandana Hingorani

 

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