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Birla accused in coal scam

CBI found that Birla met then coal secretary Parekh to push for allocation of Talabira II coal block in Odisha

Ruchika Chitravanshi & Dev Chatterjee  |  New Delhi/ Mumbai 

The 14th FIR in the coal block allocation scam has named industrialist Kumar Mangalam Birla as an accused, along with former coal secretary P C Parekh, for alleged criminal conspiracy and abuse of official position. Central Bureau of Investigation (CBI) found that Birla met the then coal secretary Parekh to push for the allocation of Talabira II coal block in Jharsuguda district of Orissa in the second half of 2005, according to a senior official at the agency.

In its FIR, CBI has alleged that Birla’s company was accommodated in the above mentioned coal block, even though the provisions allowed the allocation only to public sector companies. “The Screening Committee’s recommendations were overturned, abusing the official position to give favours to Hindalco,” the CBI official said.

Birla has been named in spite of him being the non-executive chairman of Hindalco. “Shocked” Birla group officials said it was “unfair” and “inappropriate” to bring the group chairman into the FIR as he was not looking after day-to-day operations of Hindalco.

The Talabira II block was initially allocated to Neyveli Lignite Corporation, a public sector company under the coal ministry, by the recommendation of the 25th screening committee. Later, it is alleged that Hindalco was also allowed to mine in the same block “at the expense of Neyveli Lignite.”

This is the first case to be registered under the preliminary enquiry of coal block allocations to PSUs from 1993 to 2011. The previous 13 cases saw names of bigwigs like Naveen Jindal Lok Sabha MP, Vijay Darda, senior congress member along with RS Rungta of Jharkhand Ispat Mining etc, coming under the spotlight of coal allocation fiasco .

CBI has found incriminating evidence in the searches conducted at five locations including corporate offices of Hindalco in Mumbai, Delhi and Secunderabad, along with residence of S K Tamotia, chief of Sambalpur, Hindalco office in Bhubaneshwar.

CBI is still investigating how and why the decision of the 25th screening committee was overturned .

“As a chairman, Birla meets almost all top government officials both in India and abroad including the Prime Minister, but that does not mean that he is influencing them for business interests,” a company official said on CBI’s stand that the industrialist was named as he met the then coal secretary to influence him and thereby get the coal block allocated to Hindalco. Birla officials denied that Birla took any decision that was against the interest or was in conflict with the laws of the land.

The 46-year old Birla is a leading industrialist -- building his empire through a series of mergers and acquisitions.

In a statement, a Birla spokesperson said the case relates to a larger case entailing coal allocation to companies, and being one of the companies, Hindalco is being investigated also. “We wish to state unambiguously that we have followed every process required for allocation of coal completely, as stipulated by the Government policy,” said the spokesperson.

Apart from Hindalco, a FIR has been filed against government-owned Aluminium Company Ltd (Nalco) also. But Nalco said, through a notification to the BSE, that it had no information about any FIR filed against the company on Utkal-E coal block allocation. Allocated in August 2004, Nalco has been looking to get all the clearances in place for the Utkal-E coal block located in Odisha.

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First Published: Tue, October 15 2013. 20:03 IST