|CBI director Ranjit Sinha
Oct. 17: The CBI director today stood his ground on the Birla FIR but left the door ajar by saying "we may file a closure report if we find no material evidence".
The room for manoeuvre was hinted at on a day one of the few specific allegations in the FIR came under strain.
The FIR lodged by the CBI against former coal secretary P.C. Parakh and industrialist Kumar Mangalam Birla says that the public sector Neyveli Lignite Corporation (NLC) suffered because of a revised decision under which the state-run unit and another PSU, Mahanadi Coalfields, were asked share 15 per cent of a coal block with Hindalco, an Aditya Birla Group company. Mahanadi got 70 per cent, Neyveli Lignite 15 per cent and Hindalco 15 per cent.
"Due to this arrangement, the proposed power project of M/s NLC which was approved by the ministry of power could not take off as planned. Thus, M/s Hindalco Industries Ltd (a private company) was favoured by Shri P.C. Parakh, the then secretary (coal), and other unknown public servants in criminal conspiracy with each other at the cost of M/s Neyveli Lignite Corporation Ltd, a public sector undertaking," according to the FIR filed by the CBI.
But multiple sources in New Delhi as well as in Chennai, where Neyveli Lignite is headquartered, said the power project did not take off because of other reasons.
Besides, even if Neyveli Lignite had decided to go ahead with the Odisha power project, it would have been allocated 5.31 million tonnes a year as anchor client, which industry sources said was enough for the annual requirement of a 1,000MW power plant. Besides, in the event of a shortage, Neyveli Lignite could have tapped Mahanadi, a fellow PSU with which it had an arrangement.
In any case, mining clearances have not been given till now and no coal has been mined from the Talabira II block, which has reserves of 152.33 million tonnes.
A Neyveli Lignite source said that the availability of coal was not a factor in the decision to shelve the power project in Odisha.
The Odisha government set conditions for land allotment, a senior Neyveli Lignite official said. Neyveli Lignite considered the terms, such as free power to three districts around the plant and a fixed price elsewhere, untenable.
"While the initial coal offering was trimmed, we could have still gone ahead due to an arrangement with Mahanadi Coalfields. But the conditions imposed by the Odisha government made the whole project unfeasible, which made us opt out," the Neyveli Lignite official added.
Subsequently, Neyveli Lignite decided to pursue a 4,000MW project with the Uttar Pradesh Power Corporation Limited with coal to be sourced from Jharkhand. It also entered into an agreement with the Rajasthan government for a lignite-based power project.
But a senior CBI officer said: "It is only because of the coal allocation to Hindalco that the proposed power project of NLC could not take off. NLC officials told us about it, saying this forced them to shift to another location."
Asked about the senior Neyveli Lignite official’s interaction with this newspaper, the CBI officer said: "I do not want to comment on what they told you."
The CBI’s FIR appeared to be short on specific evidence and long on subjective phrases like "abusing official position", "sole intention to show undue favours" and "criminal conspiracy". If the CBI has evidence to prove such charges, the FIR does not list the proof till now.
The entire case seems to rest on the premise that Parakh, who also headed the steering committee that rejected Hindalco’s initial application, changed his decision after meeting Birla. Parakh had said yesterday that he was convinced of the case made by Birla.
The absence of any allegation of quid pro quo in the FIR raises the question if decisions by senior officials, which are subsequently cleared by the executive leadership, can be construed as "criminal conspiracy".
CBI director Ranjit Sinha said today: "We have registered a case in connection with the alleged irregularities in the coal allocation as per the directions of the Supreme Court and we are investigating it. Parakh made a U-turn by first rejecting the application of Hindalco and then allotting the block to it. If he explains the U-turn and if we find that there are no material evidence against him, we may file a closure report in the case as we have done in several other cases in the past."
The CBI does have a history of closure reports. In September, the agency filed a closure report in the disproportionate assets case against Samajwadi Party chief Mulayam Singh Yadav and his family. In the first week of this month, the CBI decided to wind up its probe in the disproportionate assets case against BSP leader Mayawati, saying there was no evidence against her.
In September, the CBI filed a closure report on an eight-year probe into alleged corruption in the purchase of rifles from South African PSU Denel.
CBI sources today hinted that the agency might question Odisha chief minister Naveen Patnaik as he had written a letter to the coal ministry recommending the coal block for Hindalco.
"Whoever will be required for investigation in the case will be examined," CBI chief Sinha said, asked whether Patnaik would be questioned.
A senior officer said: "Patnaik had written a letter in May 2005 to the Prime Minister’s Office recommending allocation of the coal block to Hindalco whose application was turned down by the screening committee."
Hindalco is setting up an aluminium smelter with a capacity of 2.6 lakh tonnes a year in Odisha’s Sambalpur, for which it needs a captive power plant.
The Odisha government today said it had done nothing wrong in recommending the coal block. "A dedicated coal block is needed for the operation of a power plant and an aluminium smelter plant. The work of the plant is in the final stage," an official source said.
"Keeping the best interests of the state in mind, the chief minister had written a letter to the Prime Minister indicating that Hindalco’s request be examined," a statement issued by Patnaik’s office said.
Patnaik had said in the letter that "Odisha, while contributing to the nation, is also keen to promote a smelter facility as they enable higher value addition and consequent generation of revenue and employment."
If Patnaik’s action is also questioned, it would mean that what would have been applauded as a proactive role to draw investments eight years ago has become a millstone around the neck in the current atmosphere in the country.
A CBI officer said the assets found at the Hindalco office in New Delhi included cash and retail bills on gold coin purchase.
"We have found Rs 25 crore in cash, another Rs 24 lakh in loose cash, National Savings Certificates and Kisan Vikas Patras worth Rs 17 lakh and retail invoice regarding purchase of gold coins worth Rs 94 lakh," he said. "Our 15 officials took over 12 hours to count the cash seized during the search."
Hindalco said in a statement today: "The company is taken aback by the discovery of cash at one of its offices by the investigating agency. It has taken a very serious view of the matter and has instituted an internal team of senior managers to make a thorough investigation and report its findings at the earliest. In the meantime, the company has reiterated to the government agencies of their continued cooperation."