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Corporate heads found guilty will be sent to jail, says Jaiswal

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BS Reporter New Delhi
Last Updated : Aug 23 2012 | 12:30 AM IST

The government has said heads of companies found guilty of misleading the government during the allocation of coal blocks would be jailed. The process of auctioning coal blocks would begin by the end of this year, and this would infuse transparency in allocation, it added.

Last week, a Comptroller and Auditor General (CAG) report had mentioned shortcomings in the process of allocating coal blocks. CAG has estimated these irregularities led to undue gains of Rs 1.8 lakh crore to private companies.

“If the Central Bureau of Investigation (CBI) finds companies filed wrong returns or gave wrong information to the government (for securing blocks), they (company chiefs) will be sent to jail,” Coal Minister Sriprakash Jaiswal said, adding, “This will be in addition to cancellation of their blocks.”

As part of its preliminary enquiry into the alleged coal block allocation scam, CBI is probing whether there were irregularities in allocating 65 coal blocks to private companies between 2006 and 2009. The investigating agency has not revealed the names of the companies that were allotted the blocks.

CAG had added the reserves of 57 blocks allotted to private companies between 2006-07 and 2010-11 and calculated the market value of the reserves to arrive at the estimated loss. Companies allotted coal mines during the period include Tata Power, Essar Power, Jindal Steel and Power, JSW Steel, Monnet Ispat and Rungta Mines, the report stated.

Jaiswal said the consultant appointed for preparing the blueprint of the auctioning process, ratings agency CRISIL, would submit its report in two months. The rules for competitive bidding of coal blocks were notified in February.

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Jaiswal rejected CAG’s allegations of undue favour to private companies, arguing only one of the 57 blocks named by the auditor in its report had begun production. “If some companies had been given favours, they would have started producing by now. But that has not happened,” he said.

He blamed five states---Madhya Pradesh, Chhattisgarh, Jharkhand, Odisha and West Bengal — for delay in introducing the auction regime by opposing the idea in 2005. He also criticised the law ministry for giving contradictory statements on the process to be adopted for auctioning. The coal ministry had floated the idea of bidding in 2004. Jaiswal said the law ministry had favored amending the Coal Mines Nationalisation Act and later, the Mines and Minerals Development and Regulation Act to introduce bidding. In July 2006, however, the law ministry said bidding could be introduced through an administrative instruction.

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First Published: Aug 23 2012 | 12:30 AM IST

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