In a significant development in Obulapuram Mining scam, one of the accused, the mines official at the time, Mr V.D. Rajagopal, has alleged that the Dr Y.S. Rajasekhara Reddy government had favoured Gali Janardhan Reddy’s OMC when it came to granting the lease for the mines. Rajagopal also clarifies that he did not receive any calls from Y. S. Jagan purportedly to influence the mines department to issue the mining lease. In fact, he reiterated that it was not him, but the government that was the issuing authority and that the government favoured the OMC, while his department processed the applications according to the prescribed legal process.

Even though Rajagopal and an IAS officer Srilakshmi are accused in the CBI case, they have not been arrested as yet. Rajagopal refused to comment on whether he had turned approver in the case. Interestingly, the CBI has already recorded the statement of Rajashekhar, one of the directors of the OMC and brother-in-law of V. D. Rajagopal.

Rajagopal admits that YSR called him and Srilakshmi and asked them to allot the 25 hectare mine applied for by the APMDC to the OMC. He said that he explained to YSR on at least four occasions that such an act will be illegal. However, Rajagopal could not explain why he did not resist the government move to favour the OMC, he preferred to remain silent. While he emphasised that he was cooperating with the CBI investigation he also refuted the allegations of him and Srilakshmi demanding money from the failed bidder C. Shashi Kumar. “I and Srilakshmi didn't demand any money from him as he alleged. When all others applied in August 2004, Shashi Kumar applied in May 2005. His allegations are not true. He had highest number of applications everywhere and goes on filing petitions,” said Rajagopal.