Coalgate: CBI books Kumar Mangalam Birla, ex-Coal Secy

Last Updated: Tuesday, October 15, 2013 - 19:18

New Delhi: Industrialist Kumar Mangalam Birla and former Coal Secretary P C Parekh have been booked by CBI on charges of criminal conspiracy and corruption in connection with alleged irregularities in the allocation of two coal blocks eight years back.

After registering the fresh FIR with a CBI court here, agency teams today carried out coordinated searches at nearly six locations in Mumbai, Delhi, Hyderabad and Bhubaneshwar which included offices of Hindalco and residence of Parekh in Sikandarabad, Hyderabad.

CBI named 46-year-old Birla, chairman of Aditya Birla Group, along with Parekh and unknown persons and officials of Hindalco and Coal Ministry in the FIR, the 14th in the multi-crore scandal, for alleged criminal conspiracy and under provisions of the Prevention of Corruption Act.

Birla and Parekh will be called in for questioning, CBI sources said.

Birla has been named since the decision to accomodate Hindalco in the coal block, meant for PSUs only, was taken after he had a meeting with Parekh in the latter half of 2005.

The USD 40 billion (Rs.2.45 lakh crore) conglomerate has denied receiving any FIR and refuted allegations of any wrongdoing.

Hindalco informed Bombay Stock Exchange that "We wish to state unambiguously that we have followed every process required for allocation of coal completely, as stipulated by the Government policy."

"This relates to media reports on an FIR naming Hindalco and our Chairman on coal issues. Apparently, this seems to be part of a larger case entailing coal allocation to companies, and being one of the companies, we are being investigated also."

CBI gave a statement saying that the agency had registered a case against the then Coal Ministry official; representative of Mumbai-based Group of Companies, Odisha- based Industry and unknown other persons and officials in connection with allocation of Talabira II and Talabira III coal blocks in Odisha.

Shares of Aditya Birla-promoted firms such as Hindalco Industries and AB Nuvo today ended the day on a mixed note,

Hindalco Industries' scrip that had tanked 4.97 per cent to Rs 105.10 in intra-day trade, recouped the losses and finally ended the day with a gain of 1.45 per cent at Rs 112.20 on the BSE.

"It is alleged in the FIR that during the year 2005, the persons entered into a criminal conspiracy with one another and then public servants by abusing their positions as such showed undue favour to Odisha-based Industry in allocation of Talabira II and Talabira III coal blocks along with a Public Sector Undertaking of Tamil Nadu," CBI spokesperson Kanchan Prasad said in a statement here.

According to the FIR, Tamil Nadu government PSU Neyveli Lignite Limited was to be given Talabira II block but Parekh allegedly favoured Hindalco and allowed it to share the block with Neyveli leading to notional loss to the exchequer.

The agency could not reach exact quantum of loss as the coal block is still not operational.

The sources said the CBI was still looking for exact quid pro quo between Birla and Parekh but added that alleged "undue" favours shown resulted in loss to the exchequer.

Birla's name has been mentioned as a representative of Aditya Birla Group in the FIR. Hindalco is one of the group companies of the conglomerate.

The blocks were allocated for power production during a meeting of the Screening Committee of the Coal Ministry, they said and claimed that the coal allocation was meant for PSUs only.

Parekh, who was Coal Secretary at the time of this allocation, faces charges of criminal misconduct under the Prevention of Corruption Act as also criminal conspiracy.

This is the first FIR from the preliminary enquiry into allocation of coal blocks and awarding of contracts for formation of joint ventures by government companies under the Government Dispensation Category from 1993 onwards, the sources said.

The previous 13 FIRs registered by the agency were from the enquiry which looked into allocations made during the period 2006-09.

CBI has been at the receiving end in the Supreme Court which has posed tough questions on the slow pace of its probe.

First Published: Tuesday, October 15, 2013 - 19:18

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