Even as the Bharatiya Janata Party (BJP) today demanded Prime Minister Manmohan Singh depose before an independent inquiry and step down, Singh lamented the current session of Parliament had been wasted. He said instead of blocking parliamentary proceedings, the Opposition should have discussed the Comptroller and Auditor General (CAG)’s report on the allocation of coal blocks.
His statement came on a day when a number of political figures, from across party lines, were swept into the coal block allocation controversy.
Preliminary investigations by the Central Bureau of Investigation (CBI) appear to reveal a staggering network of political figures and companies owned by their relatives and friends. Some of these companies, which applied for, secured, and, in many cases, sold the coal blocks, had nothing to do with coal.
The brothers of two Congress leaders, Subodh Kant Sahai and Vijay Darda, owned two companies that were allotted coal blocks.
Bharatiya Janata Party (BJP) member of Parliament (MP) from Chhattisgarh Ajay Sancheti was allocated a coal block that has already come under the scrutiny of the Accountant General of Chhattisgarh. According to BJP sources, Sancheti, a close associate of BJP President Nitin Gadkari who has been engaged in the coal business in Jharkhand since 1985, was allotted the block through bonafide bidding. “He secured the block well before Gadkari became the party president. Allegations (against Sancheti) are being made because the BJP national executive at the end of the month is almost certain to approve a second term for Gadkari as party president, and there are interests that want to prevent this,” said party sources.
CBI is not probing Sancheti for now. It has denied officials of the Chhattisgarh, Madhya Pradesh and Odisha governments were under the scanner in the alleged coal block allocation scam.
Dravida Munnetra Kazhagam(DMK) MP and Minister of State for Information and Broadcasting S Jagatharakshakan was also allocated a coal block in 2007. According to a clarification issued by the minister, his company, JR Power Gen, had entered into an agreement with public sector company PIPDIC, owned by the Puducherry government. The minister claims he was neither a director nor a shareholder of the company in 2009, when he contested elections. However, as part of the mandatory asset declaration by all ministers and their families in 2011, his son had listed 75,000 shares in JR Power Gen. In his statement, Jagatharakshakan contested the CBI’s statement that 51 per cent of Power Gen shares were sold to a Hyderabad-based company in 2010. He said a dispute between directors of the company had led to a case in a Chennai court.
The DMK has said, “The MoS (minister of state) for information and broadcasting was not a member of the DMK in 2007.”
The government did not react to demands the minister should step down. Law Minister Salman Khurshid said, “Somebody must come with (substantial) allegations that require investigation….Somebody should substantiate a specific charge that there was undue influence...we can then answer.”
Rashtriya Janata Dal MP and former minister Prem Gupta admitted his son owned a company to which a coal block had been allocated. He, however, added he had nothing to do with the company.
Meanwhile former power secretary E A S Sarma, in a letter to the Prime Minister’s Office (PMO), Reserve Bank of India Governor D Subbarao and finance ministry officials, stated public money was in danger because many companies that were allocated coal blocks had borrowed money from public sector banks.
Quoting a Credit Suisse report, Sarma stated Indian banks had recorded 20 per cent annual loan growth over the past five years. “However, this growth is increasingly being driven by a select few corporate groups and, in 2011-12, over 20 per cent of the incremental loans came from just ten groups. The total debt level of these ten (Adani, Essar, GMR, GVK, JSW, Jaypee Group, Lanco, Reliance ADA, Vedanta and Videocon) has jumped five times in the past five years to Rs 5,39,500 crore (40 per cent compounded annual growth rate) and now equates to 13 per cent of the total bank loans and 98 per cent of the net worth of the banking system,” he quoted the report as stating.
“It is equally interesting to know some of these companies have used the clout they have with several political parties to get captive coal blocks allotted to them, purely on a subjective basis. Some of these companies are even known to have funded political parties, in violation of the FCRA (Foreign Contribution Regulation Act), on which I have formally lodged a complaint before the Election Commission of India and the home ministry” Sarma’s letter stated.
