CBI also names former minister of state for coal, Dasari Rao, in the FIR along with three other companies

New Delhi: The Central Bureau of Investigation (CBI), which is probing alleged irregularities in the allocation of coal mines, registered a criminal case against Jindal Steel and Power Ltd(JSPL) and its promoter and Congress parliamentarian Naveen Jindal on Tuesday, sending the company’s stock tumbling to a four-year low.

The agency also named Jindal Realty Pvt. Ltd, another company owned by Jindal, former minister of state for coal Dasari Narayana Rao and his media firm Saubhagya Media in the first information report. Charges of cheating and criminal conspiracy were slapped on Gagan Sponge Iron Pvt. Ltd and against New Delhi Exim, which CBI claimed are also owned by Naveen Jindal.
JSPL shares dived as much as 24.3% on BSE after the news broke. They ended 15.18% lower atRs.226.35 each, while the benchmark Sensex fell 1.53% to end at 19,143 points.
CBI started probing the allocation of coal mines after the Comptroller and Auditor General of India, the government auditor, published a report last year estimating a notional loss of Rs.1.86 trillion to the exchequer because of a flawed allocation process. The investigating agency has already registered 12 cases.
The so-called coalgate scam resulted in the resignation of law minister Ashwani Kumar last month following allegations that he had attempted to interfere in the CBI probe. He resigned after the Supreme Court, which is monitoring the investigation, rebuked the agency for sharing its findings with the political executive.
CBI officials claimed that JSPL and Gagan Sponge were allotted the Amarkonda Murgadangal coal block in Birbhum, Jharkhand in 2008.
“They applied in 2007 and misrepresented facts about land, water supply and previous allocation to establish their eligibility. After the block was allocated, Jindal’s companies invested in Saubhagya Media,” a Hyderabad-based firm, said a CBI official, who requested anonymity.
“They bought shares worth Rs.2.25 crore at a price of Rs.100 each, when the listed price of Saubhagya Media was Rs.28 only. It seems to be a quid pro quo for overlooking eligibility criteria,” the official added. Quid pro quo, this for that in Latin, typically means a favour or advantage granted in return for something.
Saubhagya Media is linked to Narayana Rao, who couldn’t be reached for comment.
CBI has already questioned Narayana Rao in connection with the case. On Wednesday, it conducted searches at 19 different locations in Delhi and Hyderabad.
“JSPL, as a law abiding company, is governed by a strong ethical code of conduct. This is an ongoing CBI investigation into coal block allocation. At this stage of investigation, JSPL is committed to fully cooperate with CBI,” Manu Kapoor, head of external affairs at JSPL, said in an emailed statement.
Another company spokesperson said JSPL could not comment on whether Gagan Sponge and New Exim were owned by Jindal.
The CBI’s action came even as the coal ministry on Tuesday formally issued show-cause notices to 12 companies holding coal blocks, seeking an explanation for not developing them. A show-cause notice is not an indictment. It only requires the company that receives such a notice to explain its position, typically within a month.
On 15 May, Mint reported that the government was planning to issue notices to the holders of at least 30 captive coal mines. Companies holding these blocks will be asked to explain why they failed to develop them and the allocations may be cancelled if the government is not satisfied with their responses, Mintreported.
Companies to which notices have been served include NTPC LtdSteel Authority of India Ltd (SAIL), Tenughat Vidyut Nigam Ltd (TVNL), Damodar Valley Corporation (DVC), Bhushan Power and Steel Ltd,West Bengal Power Development Corp. Ltd (WBPDC), Madhya Pradesh and Maharashtra state mining corporations, Abhijeet Infrastructure Ltd, Rungta Mines, OCL India Ltd and Ocean Ispat Pvt. Ltd, according to a PTI report.
The companies have to respond by 30 June.
Last week, the coal ministry had issued notices to 11 companies including JSPL, Monnet Ispat and Energy Ltd, NTPC, and GVK Power and Infrastructure Ltd for not developing the blocks allotted to them. A JSPL spokesperson said the company had received the notice and said that it was likely to respond in 20 days. A Bhushan Steel spokesperson said that the company had not yet received the notice.
“The land acquisition process is on and we have already acquired 1,200 acres of land. We are awaiting approval of relocation and rehabilitation plan. The mine developer-cum-operator has already been appointed,” an NTPC spokesperson said in an emailed response.
“We are on track as per our commitments. We are yet to get the letter and will respond to it accordingly,”R.N. Sen, chairman of DVC, said over the phone.
“We will be responding to the ministry. The company has obtained all the relevant permits and approvals from both state and central governments for commencement of mining operations at the allotted coal block. The delay in development of coal block was beyond the control of the company; nonetheless the coal mine as well as the power plant will be ready for commissioning, shortly,” a GVK Power spokesperson said in an emailed response.
An OCL India spokesperson could not immediately confirm whether the company had received the coal ministry’s notice. He, however, added that OCL India is in a joint venture with Rungta Mines and Ocean Ispat Ltd.
Phone calls made to officials at WBPDC and Abhijeet Infrastructure were not answered. Spokespersons for Rungta Mines and Ocean Ispat, TVNL and Maharashtra and Madhya Pradesh state mining corporations could not be reached. A Monnet Ispat spokesperson did not respond to a request for comment. A SAIL spokesperson said the company had not received any notice so far.
According to PTI, the coal ministry said that while NTPC failed to commence power generation from Talaipalli block in Chhattisgarh, allotted to it in January 2006, by March 2012, SAIL failed to meet the milestone of developing the Sitanala block in Jharkhand. The notices to firms were issued for 12 coal mines allotted between June 2003 and July 2007.
In a separate development, the Supreme Court on Tuesday issued a notice to Naveen Jindal and the central government on a public interest litigation seeking a CBI inquiry into the demolition of a 400-year-old mosque that was in the mining lease area held by the Jindal Group in Bhilwara district of Rajasthan. The company declined to comment on this.
Courtesy: livemint
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