The coal controversy seems to be getting even murkier as the Central Bureau of Investigation that has initiated preliminary enquiries into the allocation of mines between 2006 and 2009 is likely to register more First Information Reports naming four to five corporate honchos in coming weeks, the Economic Times reported today.
The report said the CBI is likely to name owners of companies in future FIRs arising out of the investigation since it does not want to “discriminate among owners”, the report added.

Among the many large firms allotted coal blocks during this period are Tata Steel, Vedanta, Essar, ArcelorMittal, GMR, Reliance Energy and Lanco.

However, more FIRs against corporate bigwigs is only going to strain the relationship between the authorities and India Inc. The government is going all out to reassure the industrialists that the government is not against them. But further accusations against corporate India will not be taken too kindly by the industry or investors abroad.
Already the Confederation of Indian Industry (CII) has reacted strongly to the case being registered by the Central Bureau of Investigation (CBI) against Kumar Mangalam Birla, Chairman, Aditya Birla Group.

“”Every effort should be made to ensure that there is no atmosphere of fear created, when it comes to decision making. Swift decisions and transparent policy environment are pre requisites of an enabling business climate. This is best done if the government and industry work together. Industry should not feel discouraged to interface with senior government functionaries on issues that need attention of the government,” S Gopalakrishnan, President, CII said in a statement.

Last night Infosys chief NR Narayana Murthy also backed Kumar Mangalam Birla and castigated the investigating agency saying that such moves could damage India’s reputation among foreign investors.

“Kumar Mangalam is one of the most respected business people. Any accusation against him without detailed facts is not likely to go well in the eyes of investors abroad as well as Indian industrialists. Agencies must be 100 per cent sure about facts before making such an accusation,” Murthy told CNN IBN.

Yesterday, Birla, speaking publicly for the first time after the CBI lodged a case against Birla and former coal secretary P C Parakh on charges of criminal conspiracy and corruption in connection with alleged irregularities in the allocation of coal blocks eight years ago, said his company has done no wrong and he is not worried about the fallout on the group’s application for a bank licence.

Birla said he discussed the CBI FIR with the minister. “I obviously brought this up with FM…So many other things to talk about…work goes on. We are in so many other industries. There are so many other things to discuss with him,” he said.

Aditya Birla Group has several businesses in the financial sector and Kumar Mangalam Birla is keen on adding a bank to the portfolio. The bank licence application has been filed by Aditya Birla Nuvo. Birla stepped down from the central bank board in July to avoid any conflict of interest.

However, according to the “Fit and Proper” criteria set by the Reserve Bank of India for new bank licences, the central bank will assess the eligibility of promoters and promoter groups on several aspects. One of the criteria is that promoters/promoter groups should have a record of sound credentials and the RBI may seek feedback on applicant croups on these or any other relevant aspects from other regulators and enforcement and investigative agencies like Income Tax, CBI and the Enforcement Directorate.

Another report in Economic Times, quoting agency officials said Birla’s bid to get a banking licence will not be foiled just because of allegations made in the FIR since there is no conclusive evidence of any wrongdoing by the chairman yet.

Meanwhile, the Central Bureau of Investigation is also looking at former coal secretary PC Parakh’s role in favouring another accused company Navbharat Power in the coal block allocation scam.

CBI sources told CNN IBN that Parakh became Director of Navbharat Power after retiring as coal secretary and Navbharat Power won Rampia coal block in Odisha after Parakh joined the company in February 2007. Navbharat Power applied for coal blocks in January 2007. Parakh retired in 2005.

Courtesy: FIRSTPOST. BUSINESS

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