Kiran didn't act on proposal to scrap Titanium project

HYDERABAD: At least six months ago, the State Mines Department had recommended that an agreement between the State Government and Bothli TradeTrade AG, a subsidiary owned by Ukrainian oligarch Dmytro Firtash-controlled conglomerate Group DF, signed in April, 2006 for mining titanium minerals in the State be scrapped.

The revelation came a day after the US Justice Department indicted Congress Rajya Sabha member KVP Ramachandra Rao, along with Firtash and four others, for allegedly participating in an international racketeering conspiracy involving at least $18.5 million (`111 crore) in bribes to State and Central government officials to allow mining of titanium in the State.

The AP Mineral Development Corporation and Bothli Trade AG had agreed to set up a joint venture to mine the minerals in Visakhapatnam, Vizianagaram and Srikakulam districts. The mining department had called for scrapping the pact citing violations of the terms of agreement. However, the then chief minister Kiran Reddy didn't act on the same.

Sources told that though the agreement mentions that the AP Mineral Development Corporation would get licence from the Centre for mining of titanium ore from beach sand, no licence has been granted to the joint venture company. 'As the agreement with Bothli TradeTrade has not been annulled as yet, the company still exists,' one official said.

The indictment of KVP by federal authorities in Chicago created ripples in the political circles. He has been accused of agreeing to accept bribes in return for getting licences for the project. KVP denied the charges and said he had come to know of the case only through the media.

'I cannot say anything based on newspaper reports. After I receive communication on charges made against me, I would be able to say anything,' Ramachandra Rao said.'I am a loyal Congressman and I am willing to face any action from the party leadership. I remained a disciplined soldier of the party and will continue to be,' he said, adding that only a thorough investigation would ferret out the truth.

An embarrassed Congress said it would take action against KVP if the charges were found to be true. Renuka Chowdhury, party spokeswoman, claimed the case wouldn't affect the party's poll prospects.

The mining project was expected to generate more than $500 million annually from the sale of titanium products, including sales to an unnamed 'Company A,' headquartered in Chicago.

Hours after the indictment, Chicago-based Boeing Co admitted that it had signed an MoU with Bothli TradeTrade in 2006 to conduct a feasibility study on the potential for sourcing titanium sponge ..at a time of short supply of the material.'

The use of titanium and its alloys has increased in the aerospace industry due to their durability and light weight. Boeing's website says its Dreamliner 787 series of jets are made of 15 per cent titanium or one lakh pounds of titanium per plane.

The main accused Dmytro Firtash was arrested at the request of the FBI last month in Vienna but was released a week later after posting a $ 174 million bond. He has been forced to stay in Austria as US prosecutors seek to have him extradited to Chicago.

The other accused in the case are Andras Knopp, a Hungarian businessman, Suren Gevorgyan of Ukraine, Gajendra Lal, a permanent resident of the US and Periyasamy Sundeeralingam of Sri Lanka.

All the accused are charged with one count each of racketeering conspiracy and moneymoney laundering, and two counts of interstate travel in aid of racketeering.

Except KVP, the others are also charged with one count of conspiracy to violate the US Foreign Corrupt Practices Act. Some of these charges carry a maximum punishment of up to 20 years in prison.

However, the focus of the probe is on Firtash, who is alleged to have links with the Russian mafia. Firtash had met former chief minister YS Rajasekhara Reddy in pursuit of his venture.

The indictment lists 57 transfers of fundsfunds between various entities, some controlled by Group DF, in various amounts totaling $10,597,050, from April 28, 2006 to July 13, 2010. The indictment seeks the forfeiture from all six accused of almost $10.6 million, the amount of bribes actually paid.