Australian paper says Thiess paid bribe to get mining contract in India

The coal block in question is Pakri Barwadih in Jharkhand, which was secured by NTPC through govt allocation for sourcing coal for its power plants in 2008

An investigative report by The Sydney Morning Herald has found that Australian mining major Thiess paid bribe to National Thermal Power Corporation (NTPC) and the ministry of power to secure a coal mining contract in India in 2008.

The report titled 'How one 'fixer' earned $2.2 billion over 20 years from Australian company Thiess' has named Syam Reddy, a Hyderabad-based mining contractor who "offered as much as $16 million in bribes to officials in order to have the contract awarded to Thiess".

Incidentally, Reddy was recently charged with land and money-laundering cases by the Enforcement Directorate.

The coal block in question is Pakri Barwadih in Jharkhand, which was secured by NTPC through government allocation for sourcing coal for its power plants in 2008.
 
When contacted by Business Standard, an official spokesperson of NTPC said no such contract was awarded. NTPC is India's largest coal-based power generating company.

Towards the end of 2010, Thiess was awarded a $6-billion contract to mine for coal, the Australian newspaper reported. "Under the deal, Reddy would use his influence to help Thiess secure the coal contract. In return, Thiess would give a Reddy company work at the mine, which would earn him $2.2 billion over 20 years."

Adding: "Twelve days after signing the Thiess deal, Reddy reported that he had the first of what would be numerous meetings with officials from the Ministry of Power and senior officials from India's NTPC."

According to the report, in 2012, Thiess' auditors were worried about the "murky arrangements that had led to the company winning large contracts in Indonesia and India". It added: "Thiess asked law firm Ashurst to advise if the company or any of its executives or agents had breached the law or the company's code of ethics. Ashurst engaged Deloitte investigators to examine a trove of emails and question Thiess executives." The report quotes a Thiess manager to have told investigators that Reddy claimed he had paid Rs 1 crore to win the contract. Deloitte report has exposed a series of dealings between Reddy and Bruce Munro, the then managing director of Thiess.

"In an astonishing series of statements, Munro told the Deloitte investigators that he did not do any due diligence on Reddy when he signed the MoU (memorandum of understanding) in 2008 because things were done in a 'mad rush' and "there was something to be gained from working with this guy," the report noted.

Part of Reddy's attraction, Munro told investigators, was his 'government contacts'. "Mr Reddy sold to us that he would be able to steer us along the route of how government worked ... he was able to access the power minister just to put our case," the Deloitte report quotes Munro as saying, according to the newspaper.

"By 2014, two years after the Deloitte report was submitted, Thiess was stripped of its coal contract by the Indian government amid growing corruption concerns," the newspaper report says.

After Thiess cancelled its 'arrangement' with Reddy, the report said Reddy used his influence in the local police force to have Thiess India chief executive Raman Srikanth arrested. "Srikanth had been annoying Reddy by ensuring Thiess management in Australia knew the true nature of the company's partner."

It added: "Reddy also had arrest warrants issued for Munro and launched legal action against Thiess for breach of contract. He would later lose this case in arbitration."

According to the report, Thiess did nothing to act on the Deloitte report and "Munro remained in his highly paid job until May last year".

"Despite the bitter end to its relationship with Reddy and knowing full well his likely involvement in corruption, Thiess last month decided to give the property developer $1.3 million in order to get him to withdraw a criminal complaint to Indian police, Indian court documents show," it added.

This came just a month after India's anti-corruption agency seized Reddy's assets worth about $30 million in an unrelated bribery and money-laundering case.