Naveen Jindal, Ex-MoS named in CBI’s coal scam FIR

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NEW DELHI: In a major setback for the UPA government in the coal block allocation scam, the Central Bureau of Investigation (CBI) has carried out raids and registered an FIR against two Congress members of Parliament. Industrialist and Lok Sabha member Naveen Jindal and former minister of state for coal Dasari Narayana Rao (a Congress leader from Andhra Pradesh); besides five private companies, have been named in the CBI FIR on charges of cheating, criminal conspiracy and misconduct in getting the Amarkonda Murgadangal coal block in Jharkhand.

Also Read: Jindal firms alleged to have paid kickbacks of Rs 2.25 cr to a firm owned by Dasari Narayana Rao

The Shares Fall

Jindal Steel & Power Ltd. (JSP), India’s third-largest steelmaker by value, headed for the biggest decline in 5 1/2 years in Mumbai as the nation’s top investigating agency registered a case related to allocation of coal blocks against the company and its owner Naveen Jindal., Bloomberg reported. The shares fell as much as 24 percent, the most since Jan. 21, 2008, to 202 rupees and traded at 218 rupees as of 12:01 p.m. local time. The stock has fallen 51 percent this year, compared with a 1.4 percent decline in the benchmark S&P BSE Sensex.

This is the first time CBI has named a government functionary who had been involved in the allocation. CBI investigations revealed Jindal Steel and Power Ltd (JSPL) and Gagan Sponge Iron misrepresented facts and gave wrong information about the company’s land, water supply and previous allocations to get the coal block in January 2008. Naveen Jindal was the signatory in all the documents given to the coal ministry.

The agency found the Jindal group companies bought shares of Saubhagya Media, a company owned by Rao, at an inflated rate of Rs 100 apiece — at a time when the quoted price was just Rs 28 apiece. This raised CBI’s suspicion. Further probe helped the agency establish a money trail that showed kickbacks of Rs 2.25 crore had been received by Saubhagya Media from Jindal group firms — JSPL, Gagan Sponge, Jindal Realty and New Delhi Exim. All the five companies have been named in the FIR. These transactions took place within the same year of coal block allocation to JSPL and Gagan Sponge Iron. (JSPL stock tanks)

JSPL’s head of external affairs, Manu Kapoor, said: “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, JSPL is committed to fully cooperating with CBI.”

CBI, which recently got an earful from the Supreme Court for sharing its status report with government officials, is also likely to seek the government’s permission to name other members of the screening committee for coal block allocation in its FIR. A senior CBI official said such a permission was required since most officials were of the joint secretary rank and above. CBI has also written to the corporate affairs ministry to reconsider its decision and allow prosecution of H C Gupta, the then coal secretary, and currently a member of the Competition Commission of India.

The agency has alleged Rao influenced the committee’s decision in the coal block allocation. Though Rao was only an MoS and the cabinet charge of the ministry was with Prime Minister Manmohan Singh, CBI is likely to question PMO officials later.

This the twelfth case registered by CBI in its probe into coal block allocations between 2006 and 2009. It has named unknown officials of the screening committee and unknown directors of the private companies named in the FIR.

CBI also conducted raids at 19 locations in Delhi and Hyderabad, including residences of Jindal and Rao. CBI officials also sealed some cupboards at Jindal’s house until he returned to Delhi, after which those would be opened in his presence.

The current case has been registered under Section 120-B, read with 420 of India Penal Code and 13 (1) (d) of the Prevention of Corruption Act.

Meanwhile, the Bharatiya Janata Party lashed out at the Congress for yet another instance of “its corruption-tainted regime”. BJP spokesperson Prakash Javadekar said, “BJP welcomes the raids on former coal minister and Congress MP Naveen Jindal.” He said the CBI inquiry into the case was launched on the complaints of BJP leaders and wanted CBI to trace the money trail in this case of “monumental corruption”.

The Congress responded, saying: “The law will take its course.” Party spokesperson Raj Babbar clarified: “We will not shield any person, however big he might be.”

Dark Tell

  • 1996-2009: JSPL allocated 5 coal blocks in Chhattisgarh, Jharkhand, Odisha and Madhya Pradesh
  • Aug 17, 2012: CAG alleges govt extended undue benefits to firms by not auctioning 57 blocks between 2006 and 2011
  • Aug 27, 2012: CAG report tabled in Parliament, pegs loss of Rs 1.86 lakh crore to the exchequer
  • Sep 2012: CBI begins probe in the alleged scam after CVC forwards complaints
  • Jun 2013: CBI files FIR, names Naveen Jindal & Dasari Narayana Rao

CBI case against JSPL may embarrass Patnaik

Patnaik sought allocation of Utkal B1 coal block under Talcher coalfields in favour of JSPL

Bhubaneswar : The Central Bureau of Investigation (CBI) registering a case against Jindal Steel and Power Ltd (JSPL) and its promoter, Naveen Jindal, is set to have a ripple effect in Odisha.

Chief Minister Naveen Patnaik is likely to face embarrassment for his role in recommending the Utkal B1 coal block in favour of JSPL in 2002, even before the steel maker inked any memorandum of understanding with the state government. The block was initially allocated to a South-based company.

Patnaik’s special treatment to JSPL had come in for sharp criticism with two central ministers questioning the Odisha chief minister’s real intent.

While minister for chemicals and fertilisers Srikant Jena had accused Patnaik of misleading the people of Odisha on coal block allocations, minister of state in the Prime Minister’s office V Narayanasamy questioned the intention of the chief minister.

“There must be some objective and special interest of the state chief minister behind it (recommending the coal block) and this needs to be investigated,” Narayanasamy said at a press conference in Bhubaneswar in September 2012.

Patnaik had written in 2002 to the then Union minister of state for coal and mines, Ravi Shankar Prasad, seeking allocation of Utkal B1 coal block under Talcher coalfields in favour of JSPL, which proposed to utilise the asset for a steel project.

“Since allotment of the Utkal B1 coal block is vital for setting up the aforesaid sponge iron/steel plant in the state, I would request your personal intervention in the matter and to consider allotment of Utkal B1 coal block in favour of Jindal Steel and Power Ltd on cancelling the prior allotment to Talcher Mining,” Patnaik’s letter stated.

Last week, the coal ministry issued a showcause notice to JSPL for delay and unsatisfactory progress in development of Utkal B1 coal block located in the Chhendipada area of Angul district.

The ministry has given JSPL 20 days to respond to the show-cause notice, failing which the coal block would stand de-allocated.

CoalGate: CBI Files Case Against Jindal, Coal MoS

Union Home Minister Sushilkumar Shinde however refrained from commenting on the CBI raids on Congress MP Naveen Jindal and former Minister of State for Coal Dasari Narayan Rao

NEW DELHI: The Coal scam came back to haunt the Congress-led UPA on June 11 with the CBI lodging fresh FIRs against Congress MP Naveen Jindal and former Coal MoS Dasari Narayana Rao. While the BJP despite its internal turmoil lashed out at the Congress for yet another instance of its corruption tainted regime and in this case of “monumental corruption.”

BJP spokesperson Prakash Javadekar said, “BJP welcomes the raids on former Coal Minister Dasari Narayana Rao and Congress MP Naveen Jindal.” Javadekar said the CBI inquiry into the case was launched on the complaints of BJP leaders and wanted the CBI to trace the money trail in this case of “monumental corruption.”

Meanwhile the Congress reacting to these developments said, “the law will take its course.” Party spokesperson Raj Babbar speaking to reporters said, “We have always maintained that the law will take its course. We will not shield any person however big he might be.”

Union Home Minister Sushilkumar Shinde however refrained from commenting on the  CBI raids on Congress MP Naveen Jindal and former Minister of State for Coal Dasari Narayan Rao.

“It is their (CBI) job. I will not give my comment. It doesn’t matter. Whatever position, if he (Jindal) is involved, according to law they should proceed,”

Shinde said replying to reporters’ question on the action of the probe agency.

The BJP spokesperson Javadekar went onto accuse the government of covering up the case and putting pressure on the CBI, which is probing the matter. “Even though the Supreme Court is monitoring the probe, government is creating hurdles. Former Coal Secretary, whose name has come up in the case should be probed,” he said.

The CBI has alleged Jindal, the chairman of Jindal Steel and Power Ltd. also Congress MP and Dasari Narayan Rao of cheating and graft and named them as accused in the case.

The agency has accused the two Congress leaders and their their companies of alleged criminal conspiracy, cheating and violating relevant provisions of the Prevention of Corruption Act.

(Business Standard/Bloomberg)

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