Bangalore/New Delhi, Apr 22 (PTI): The Reddy Brothers today said they have sold their entire stake in Karnataka unit of Bramhani Industries to Miglani family, promoters of high-grade steel makers Uttam Galva Steels for Rs 285 crore, giving up their sole business interests in the state in the wake of allegations over mining activity.
Karnataka Tourism Minister G Janardhana Reddy told PTI that the deal was signed in the first week of this month and the new promoters' have rechristened the company as 'Uttam Galva Ferrous'.
"We wanted to set up a steel plant in Bellary and had invested Rs 285 crore... Now Uttam Galva, the Miglani family has taken it over. It has been sold at par," Reddy, who is also the Chairman of Bramhani Industries, said. The Reddy Brothers have been facing flak from different quarters for their alleged involvement in illegal mining in the Bellary region of the state.
"I wanted to do something for the state. But in Karnataka, there are always allegations against us. How many days this can continue? I wanted to close this. I wanted to put a full stop on all this. So, one day in the Assembly, I said we will not have any investment in the state.
"Yes, out of frustration I said this. I don't have any business interest in Karnataka and I don't want to do any business in the state," Reddy said. The Readdy brothers had already acquired 5,000 acres of land for putting up the steel plant in Karnataka, but work could not be started due to various issues.
Admitting that the illegal mining controversy has affected his plans of setting up a four million tonne steel plant in Andhra Pradesh as well, Reddy, however, said there were no plans to shelve the project. "The Andhra unit will continue, we have no plans to sell it," he said adding that the company has already acquired close to 14,000 acres of land and invested Rs 1,350 crore from within for the projects.
He further said that funding from banks for the project could not be secured due to the illegal mining controversy. The Bramhani Industries had earlier planned to set up a four million tonnes per annum (MTPA) capacity in Kadapa district in Andhra Pradesh including 1.25 MTPA steel in the first phase. The company also plans to build one airport in the vicinity.