NEW DELHI, (Reuters) – The chief minister of a southern Indian state ruled by the country’s main opposition party resigned yesterday after an independent probe implicated the politician and several others in a $3.6 billion illegal iron ore mining scandal.
B.S. Yediyurappa, a popular leader of the Hindu nationalist Bharatiya Janata Party (BJP), resigned as the chief minister of the Karnataka state, after his party advised him to step down as it came under attack from the Congress Party for what it called hypocrisy over graft charges.
Yediyurappa has denied any wrongdoing. His is the only government the BJP has in south India, a region where the party has long sought to expand.
India’s ruling Congress Party has been attacked by the BJP over several graft cases including a multi-billion dollar telecoms licence scandal. The mining case could give some respite to Prime Minister Manmohan Singh in the parliament session that begins Monday.
Karnataka accounts for about a quarter of iron ore shipments from India, the world’s No. 3 supplier of the steelmaking raw material after Australia and Brazil. The political crisis is seen delaying shipments and could put further upward pressure on global prices.
Karnataka, whose capital Bangalore is home to India’s showpiece software sector, has long struggled with illegal mining. An extensive report by an independent ombudsman tasked with investigating charges of corruption has named several politicians and companies.
Justice Santosh Hegde, who spearheaded the report, has said 400 firms and 787 people have been implicated in a web of corruption involving mining, transport, customs and shipping officials, leading to hundreds of thousands of tonnes of iron ore going missing from mines across the state.
