Case filed against Birla in coal scam

The Central Bureau of Investigation (CBI) has booked cases against Aditya Birla Group chairman Kumar Mangalam Birla and former coal secretary P C Parekh on charges of criminal conspiracy and corruption in the multi-crore coal block allocation scam. This is the 14th case in the controversial allocation that rocked the country.

After registering the fresh FIR, the CBI conducted searches at six locations in Mumbai, Delhi, Hyderabad and Bhubaneshwar and the residence of Parekh in Secunderabad. Birla is the second prominent businessman to be named in an FIR after Congress MP Naveen Jindal, who is also an industrialist.

Birla has been booked as the representative of Aditya Birla Group and his group company Hindalco, an aluminium maker, for alleged corruption in the allocation of two coal blocks in Talabira in Odisha, which was allotted to it on November 10, 2005, senior CBI officials said. Birla may be called in for questioning soon, officials said.

During 2005, according to a statement issued by the CBI, the “said persons in criminal conspiracy with one another and then public servants by abusing their positions as such showed undue favour to an Odisha-based industry in allocation of Talabira II and Talabira III coal blocks along with a Public Sector Undertaking of Tamil Nadu”. The coal blocks were allocated for power production.

The officials said Hindalco did not fulfil requirements of coal block but was unduly favoured by the government. The block was meant for PSUs only but a decision was taken in favour of Hindalco after Birla had a meeting with Parekh, they said.

The Birla Group has refuted the allegations of any wrongdoing. “This relates to media reports on an FIR naming Hindalco and our chairman on the coal issue. Apparently, this seems to be part of a larger case entailing coal allocation to companies, and being one of the companies, we are 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,” a statement issued by Hindalco said.

The FIR registered by the CBI has said that Neyveli Lignite Limited was to be given Talabira II block but Parekh allegedly favoured Hindalco and allowed it to share the block with Neyveli.

The CBI could not calculate the loss to exchequer as the coal block is still not operational.Investigators said the CBI is investigating the quid pro quo between Birla and Parekh. The “undue” favours shown to the Birlas resulted in loss to the exchequer.

While this case is the first to be registered in connection with allocations between 1993 and 2005, the previous 13 FIRs registered by the agency were from the enquiry, which looked into allocations made during the period 2006-09 when Prime Minister Manmohan Singh was in charge of the Coal Ministry.

The Centre and the CBI have been rebuked by Supreme Court for its handling of the case. The missing files and the alleged non-cooperation of the Coal Ministry had been deliberated by the Supreme Court during the hearing of the case.