Lokayukta Report on illegal mining in Karnataka details the methods in which miners, government officials and ministers colluded to defraud the government of mining revenues. The report details the complete breakdown of democratic governance in the bellary area and uncovers the "zero risk system", a protection and extortion racket, masterminded by G. Janardhana Reddy. The report describes the illegal money transfers to foreign companies and tax shelters by mining entities such as Obulapuram Mining Company, Associated Mining Company, GLA Trading and GJR Holdings owned by the Reddy Brothers. Investigation by CBI Janardhana Reddy along with his brother-in-law, B. V. Srinivas Reddy was arrested on 5 September 2011 by the CBI, taken to Hyderabad, the Capital of the neighboring Andhra Pradesh and remanded to judicial custody in Chanchalguda Jail. He is accused of being involved in the illegal mining and export of iron ore in Bellary and Anantapur. This investigation is the culmination of a recommendation to CBI by the former Andhra Pradesh chief minister Rosaiah and not directly related to the findings of Lok Ayukta Santosh Hegde on illegal mining in Karnataka. The CBI submitted a charge-sheet in the ongoing investigation. The CBI also arrested senior officers of the IAS, V. D. Rajagopal and Y. Srilakshmi, as third and fourth accused respectively. V. D. Rajagopal, the former Andhra Pradesh Director of Mines, Vice-Chairman and Managing Director of AP Mineral Development Corporation is accused of preferential treatment to Obulapuram and denying mining licenses to other applicants. The permission for mining in Anantapur was for captive mining, i.e. the ore mined in that region is to be used in the local steel plant and not to be exported. Y. Srilakshmi former Andhra Pradesh Secretary Industries, is accused of dropping the term "captive mining" in the final order approving a mining license to Obulapuram. Srilakshmi claimed that this was done at the insistence of the former Minister of Mines and current Andhra Pradesh Home minister Sabitha Indra Reddy. However the CBI defended the Home minister, who is a senior local politician of the ruling Congress party. However, it is political rivalry, favouritism led to misuse of CBI and government authorities against any particular community. In this case, it is then congress chief minister Rosaiah because of reddy brother's good standing with former's political rivalry Jagan mohan Reddy, now the chief minister of Andhra Pradhesh. It was evidenced that Reddys had good standing with