After the telecom scam, the Central Bureau of Investigation (CBI) has turned the heat on the allocation of coal blocks. It has registered FIRs against 20 accused, including five private companies, their directors and unknown government officials for misrepresentation of facts during allocation. The agency is likely to register more FIRs.
After three months of a preliminary inquiry, which started in June, the CBI registered FIRs against AMR Iron and Steel, JLD Yavatmal, Navbharat Power, Vini Iron and Steel and Jas Infrastructure under Section 120 B and 420 of IPC for criminal conspiracy and cheating.
Except AMR, all these companies have been named in the recent audit report of the Comptroller and Auditor General of India that alleged Rs 1.86 lakh crore of undue financial gains to private companies allotted captive coal blocks. The CBI also conducted raids at the premises of Mumbai-based Inertia Iron and Steel and Jayaswal Neco.
All the companies have been accused of making false claims about net worth, earlier allocations and group companies to meet eligibility criteria. Similar charges in the 2G spectrum case had sent former telecom minister A Raja and high-profile corporate executives Sanjay Chandra and Shahid Balwa to jail.
The investigating agency found the Hyderabad-based Navbharat Power had sold a majority stake to Essar Power in July 2010, giving 5,000 personal shares of the promoter for Rs 50 crore and another Rs 85 crore worth of the company’s shares for a much lower value of Rs 12 crore.(CONTROVERSIAL BLOCKS: THE 5 IN THE DOCK)
Essar Power said in a statement that “NPPL was developing a 1,050-Mw power project in Odisha and subsequent to the acquisition, Essar Power has invested a substantial amount towards further development of this project. The Rampia/Rampia Dipside coal blocks (12.5 per cent share) were allocated to NPPL in January 2008, more than two years prior to Essar Power having invested in the company. To the best of our knowledge, the allocation was entirely in accordance with extant government policy at the time”. The timing for the development of the blocks was dependent on the receipt of various statutory clearances and progress achieved by the other parties that were joint owners of the block, including Sterlite Energy, GMR Energy, ArcelorMittal India Ltd, Lanco Group & Reliance Energy, the company said.
CBI sleuths started conducting raids early this morning across 30 locations in 10 cities, including Delhi, Dhanbad, Mumbai, Kolkata and Hyderabad, among others, and found incriminating evidence, including at the premises of a Congress leader from Maharashtra with alleged links to three of the companies.
The CBI probe into the matter was referred by the CVC, the government’s anti-corruption watchdog, based on a complaint received by the Bharatiya Janata Party. The naming of “unknown officials” by the CBI is to show that private persons acted hand in glove with public servants at state and central levels to orchestrate the alleged coal scam. In a press statement, the CBI said there were “presentations and connivance, a lack of due diligence on the part of public servants” for getting coal blocks. “Promoters of some of these companies have allegedly sold their stakes in an irregular manner after the allocation of coal blocks,” the statement said.
The preliminary CBI inquiry revealed that Jas Infra, Kolkata, Nagpur-based AMR and JLD Yavatmal apparently belonged to the same promoter. While applying for the blocks, they falsely declined to have been allocated any coal block earlier and forged figures to inflate their net worth, which was one of the criteria for allocation. A CBI official said the companies signed memoranda of understanding for short durations to add other companies’ equity to increase their financial strength. They have not done any mining work at the blocks, CBI investigations have revealed.
The CBI found that Navbharat Power had attached various bank letters to its applications, saying it was ready to take up such projects, and later took bank loans to show it was financially sound.
Working on similar lines, Vini Iron and Steel was found to have claimed it had a tie-up with 15 companies in order to increase its net worth. The investigation revealed nine of those companies denied having ever joined the group.
