CBI names KM Birla in coal scam FIR
Oct 15 2013
Company says charge is preposterous, as coal block given to Indal was acquired by Birla
The 46-year-old Birla may be summoned for questioning by CBI as was done in the case of Jindal.
CBI’s 14th first information report (FIR) in the scam filed on Monday named the Birla group’s Hindalco, the state-run Nalco and former coal secretary PC Parekh.
The FIR charged Birla and others with criminal conspiracy and abuse of position in the allocation of coal blocks Talabira-II & Talabira-III in Jharsuguda district of Odisha. The two blocks were allocated to Hindalco in 2005, for an aluminium plant.
On Tuesday CBI officials continued their searches at six locations in Mumbai, Secunderabad, Bhuba-neshwar and New Delhi.
The Birla group denied any wrong doing by either its chairman or other top executives in the coal block allocation. “We have followed every process required for allocation of coal completely, as stipulated by government policy,” said Pragnya Ram, executive president of the group.
D Bhattacharya, Hindalco MD, said the charges against Birla were preposterous as the coal blocks had been given nine years on an initial application made by Indal, the Indian subsidiary of Canada’s Alcan. Indal was later acquired by the Birla group.
“To imply that our chairman managed to overturn the decision of the screening committee is preposterous,” said Bhattacharya. He said Hindalco like any other company pursued coal blocks regularly with the government through regular channels.
He said Talaibara-II and Talaibara-III were in fact allocated to a joint venture of two state-run companies, Mahanadi Coalfields and Neyveli Lignite. The Birla group had 15 per cent stake in this venture.
He said Hindalco was at receiving end, as the block was to supply coal to a Rs 11,000 crore aluminium project, which would be ready for commissioning in a month. But the company was yet to get clearances for mining coal in the two blocks. This would mean delayed returns from this massive investment, said Bhattacharya.
CBI officials said they would soon file charge-sheets against all those involved in the coal scam. CBI had filed a chargesheet in September 2012. In Monday’s FIR, Birla and others have been charged with ‘cheating, forgery and financial misrepresentation.’ It said Hindalco was unduly favoured and allocated the coal blocks though it did not fulfil the policy requirements. Immediately after news of Birla involvement in the coal scam broke, selling pressure was visible in the stocks of his group firms. But the market later ignored the news.
The Hindalco stock shed 5 per cent to hit an intra-day low of Rs 105.10 but recovered to end the day 1.45 per cent higher at Rs 112.20.
The Aditya Birla Nuvo stock lost nearly 4 per cent in the morning, later pared some of the loss and eventually closed 1.61 per cent lower at Rs 1,242.15. UltraTech Cement was down 2.50 per cent in the morning, but cut the loss to 0.34 per cent at Rs 1,969.25 at the day’s end. Idea Cellular closed flat at Rs 184.80 after having been down 1.30 per cent in the morning.
After the close of trading Hindalco in a note told BSE: “Apparently this (FIR naming Birla) seems to be part of a larger case entailing coal allocation to companies and, being one of the companies, we are being investigated also.”
Last month Jindal, who is also a Congress MP, was summoned by CBI and questioned on the coal blocks allotted to his group though the Jharkhand government (where the coal mines are) had not recommend such allocation.
Jindal has been named an accused in the CBI’s 12th FIR and charged with misrepresentation of facts. The coal blocks allocated to his group companies in 2008 are in Amarkonda Murgadangal.
In an earlier FIR the then coal minister Dasari Narayana Rao was named and accused of receiving Rs 2.5 crore from the Jindal group for the allocation.
Darda, the Congress MP, and his relatives are among those accused by CBI of cheating in FIRs filed last month. An FIR against J L D Yavatmal points to close links between Darda, editor in chief of Lokmat, Maharastra’s best selling vernacular daily, and the Jayaswal family. But Darda has reportedly claimed that his association with Yavatmal ended in 2009 after his father’s death.
CBI said the application for allotment of coal blocks made by by Yavatmal in January 2008 omitted some vital information and so a prima facie case of corruption and collusion with public servants could not be ruled out.
CBI cases have also been filed against four other firms. These are Jas Infrastructure in which Darda and his son hold 7 per cent, AMR Iron and Steel, Vinni Iron & Steel and Navbharat Power. Darda set up Jas Infrastructure along with Yavatmal with businessman Manoj Jayaswal. Different companies under Jayaswal's fold were given 20 coal blocks.
Last month CAG said 142 coalfields allocated between 2004 and 2009 allowed private firms windfall benefits of up to Rs 1,86,000 crore as the coal reserves in the mines were sold at highly undervalued rates.
(With inputs from Amit Mudgill in New Delhi)