Corrected - Jindal Steel says CBI investigating coal block allocation

MUMBAI, Oct 27 (Reuters) - (Corrects second paragraph to note the company's statement late on Monday was in response to a specific article in the Business Standard newspaper reporting that the Central Bureau of Investigation was probing a suspected case of illegal mining, and was not in response to local media reports over accusations that Jindal paid bribes to secure coal blocks.)

Jindal Steel and Power Ltd said on Monday the Central Bureau of Investigation (CBI) was investigating the granting of a coal mining licence block to the company.

The company's statement late on Monday was in response to a Business Standard newspaper report noting the CBI was investigating accusations that Jindal had engaged in excessive coal mining and illegal mining beyond the approved area in one of its mines in Chhattisgarh.

Jindal said the CBI had filed a first information report against the company in connection with the allotment of a coal block in Chhattisgarh.

The company, led by billionaire and former member of parliament Naveen Jindal, has been hit by the new government's reforms of the national coalmining industry.

Its shares have lost more than quarter of their value since the country's top court last month revoked most of the coal mining licences allocated by the government over the past two decades. [ID:nL3N0RP310]

Adding to the company's troubles, the CBI has issued a preliminary inquiry into irregularities in forest clearances related to an iron ore mine in the eastern state of Jharkhand, a CBI spokeswoman said.

"We have only come to know of the preliminary inquiry through media reports. JSPL reiterates that we have always co-operated with the investigative agencies and will respond when we receive these queries from the investigative authorities," the company said in an emailed statement.

(Reporting by Aman Shah in Mumbai; Editing by David Holmes and Greg Mahlich)