Production at showcase Vijaynagar steel project down 35%.
JSW Steel, part of the $10 billion O P Jindal Group, on Thursday said it was the “aggrieved party” in Karnataka since it had not been allotted a single mine despite investing Rs 40,000 crore over the past 15 years in the state.
The company denied allegations of bribery and illegal procurement and transportation of iron ore in Karnataka made by anti-corruption watchdog Lokayukta N Santosh Hegde. The steelmaker is not currently not thinking of taking any legal step but may do so in the future if the need arises, Joint Managing Director and Group Chief Financial Officer (CFO) Seshagiri Rao told reporters.
Rao gave a detailed clarification refuting what he called “speculative conjecture”. “JSW Steel is appalled and concerned with the untenable conclusions drawn in the Lokayukta report based on speculative inferences being drawn against JSW Steel without giving adequate opportunity to the company to present its view.”
He said the recent blanket ban imposed by the Supreme Court on mining in the Bellary district has forced the company to cut down production from its showcase 10 million-tonne Vijaynagar steel plant by 35 per cent. The announcement and the clarification saw the company’s share price at the Bombay Stock Exchange closing at Rs 685.1, down 3.4 per cent, compared to the previous day’s close. The share price had dropped 20.5 per cent since July 27, when the Lokayukta’s report was submitted.
IRON ORE PROCUREMENT
Reacting to allegations that JSW Steel illegally received 1.2 million tonnes of iron ore between April 2009-July 2010, the company said it had bought every tonne of iron ore against valid purchases and that it was not connected to illegal activities and unlawful extraction of the mineral or default in payment of royalty by mine owners to the state exchequer. “If the mining company or transporter or the agency issuing permits had not adhered to law, JSW Steel cannot be held liable,” said Rao.
TRANSPORTATION
The Lokayukta report had alleged that iron ore was transported illegally from a stockyard near JSW premises to different destinations, including Autonagar and Baba Plot. Rao refuted the charge by saying that the yard was not owned by JSW. “JSW Steel is not in the business of iron ore export and has not shipped the mineral to Krishnapatnam port or any other port. Its name is unnecessarily included thereby putting the company in disrepute,” said Rao.
Collateral benefits in obtaining mining concessions
JSW Steel said the Lokayukta report linking genuine commercial transactions with unrelated correspondence between various government departments and defames the company’s name by drawing conjectures against it.
“When JSW Steel has no mining concessions even after several years of investments, conjecture of collateral benefit to the company is a mere speculation,” Rao said.
