CBI should probe Vedanta takeover of Dempo Mines: Shah Commission

The Rs. 1,750 crore acquisition of one of Goa's biggest mining companies, Dempo Mining Corporation in 2009 by Sesa Goa, a subsidiary of the London-headquartered Vedanta Resources, should be probed by the Central Bureau of Investigation (CBI), according to the Justice M.B. Shah Commission.

The third report of the Commission of Enquiry appointed by the union ministry for mines, which was tabled in Parliament during the ongoing session, has also suggested that the transfer of leases from the Dempo Mining Corporation to Vedanta Resources, which has non-Indian directors, amounts to an illegality.

The report says that the collective area of leases now controlled by Vedanta Resources via its companies Sesa Goa and Dempo Mining Corporation should be probed because the country's mining laws limit a lease holding to 10 sq km.

"This exercise could not be done because of time constraints hence it requires further investigation from a central agency, preferably Central Bureau of Investigation along with other illegalities and issues as discussed in the report of Goa," Justice Shah says in his report.

The report also says that the range of irregularities surrounding the acquisition "are required to be further investigated by (the) Central Bureau of Investigation because the violation/misuse of the laws goes beyond the state jurisdiction".

In its findings, Shah also points out that since the two companies functioning under the aegis of Vedanta Resources, had non-Indian company directors, the acquisition of leasehold rights over mining areas either in Goa or anywhere in India was illegal under Section 5(a) of MMDR Act, 1957.

The report also picks out a string of irregularities in the acquisition deal, the biggest ever in Goa's mining sector, which includes transfer of leases to Vedanta Resources subsidiary companies without intimating the state government.

Indicating the rot in Goa's mining sector, the report also said that 68 out of Goa's nearly 100 odd mining leases that were operational until a few years ago were illegally transferred, without consent from the state government.

The report also indicts major mining firms in Goa, including the illegal acquisition of mining leases by Timblo Minerals Private Limited.