Coal FIR names Kumar Mangalam Birla

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By OUR BUREAU
  • Published 16.10.13
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New Delhi, Oct. 15: The CBI today lodged a first information report naming industrialist Kumar Mangalam Birla in a coal block allocation case.

The FIR accuses the Aditya Birla Group, chaired by 46-year-old Kumar Mangalam, of entering into a criminal conspiracy to gain access to two coal blocks in Odisha that were originally meant for public sector companies.

Hindalco, the Aditya Birla Group flagship that was eventually allotted a 15 per cent share in the coal blocks, described the charges as “preposterous” and added that no mining had been carried out at the two blocks.

With an annual turnover of Rs 2.48 lakh crore, the Aditya Birla Group has interests in metals, textiles, cement, telecom and finance.

Former coal secretary P.C. Parekh has also been named in the FIR in connection with the allocation of Talabira II and Talabira III coal blocks in Odisha in 2005.

“Hindalco was ineligible for the coal blocks as it was not a PSU and the allocation was done against the recommendations of the screening committee,” a CBI official said.

“Kumar Mangalam’s name figures in the FIR as a representative of Aditya Birla Group while his group company, Hindalco Industries Ltd, has been named for alleged corruption in the allocation of the Talabira coal blocks,” the official added.

The CBI today searched nearly six locations in Mumbai, Delhi, Hyderabad and Bhubaneswar. Some of the premises are associated with Hindalco and one was the residence of Parekh in Andhra.

The agency usually questions those named in the FIR. Sources said the questioning, which could cover Kumar Mangalam also, might begin from next week. An alleged meeting between Parekh and a Hindalco representative in 2005 is also under the scanner.

The CBI, which was rapped by the Supreme Court in May for speaking like “a caged parrot”, has been investigating the allotments as part of a court-monitored probe and has so far registered 14 FIRs.

“It is alleged in the FIR that during the year 2005, the said persons in criminal conspiracy with one another and then “unknown” 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,” CBI spokesperson Kanchan Prasad said in a statement.

According to the FIR, Neyveli Lignite, a PSU based in Tamil Nadu, was to be given Talabira II but Parekh allegedly favoured Hindalco and allowed it to share the block with Neyveli, leading to notional loss to the exchequer. The agency could not assess the exact quantum of loss as the coal block is still not operational.

The agency has slapped relevant provisions of the Prevention of Corruption Act on Kumar Mangalam, Parekh and other unknown government officials.

In June, the CBI had booked industrialist and Congress MP Naveen Jindal and former central minister Dasari Narayan Rao in the coal allocation controversy.

Hindalco said today that the allegations against the company and Kumar Mangalam were “unfounded”.

“The reality of the matter is very different from what has been projected,” Hindalco managing director D. Bhattacharya said in a statement.

Hindalco said its application for mining rights in Talabira II was made in 1996 by Indian Aluminium (Indal), the Indian subsidiary of Alcan, the Canadian aluminium firm. Hindalco acquired Indal in 2000 and continued to pursue the matter.

The company said the actual allocation of the mine was made in November 2005 — nine years after the first application was made.

“In the interim, Hindalco made several representations to the government as any corporation would normally make in such circumstances, and only through formal channels. To imply that our chairman, Mr. Kumar Mangalam Birla, managed to overturn the decision of the screening committee is preposterous,” the statement added.

“The truth of the matter is that the Talabira II and III mines together have been finally allotted jointly to Mahanadi Coalfields and Neyveli Lignite, both public sector undertakings, with Hindalco having only a 15 per cent stake in the joint venture,” the statement said.

The group’s Aditya Alumina and Aluminium Project, an integrated aluminium complex in Odisha, was planning to access captive coal from Talabira II coal block, a joint venture between Mahanadi Coalfields and Neyveli Lignite.

The Hindalco statement said today that no mining had been carried out. “The project, for which this mine was allocated, is ready to commission later this month, whereas the clearances to permit mining have not been received so far. Consequently, no mining has been carried out. This will mean delayed returns from our project, which has been set up on a capital expenditure of over Rs 11,000 crore.”

The statement said that Hindalco had to struggle to secure coal and has had to suffer an “irrecoverable economic loss”. “In the light of these facts, the allegations made are paradoxical,” it said.

Hindalco informed the Bombay Stock Exchange that “we wish to state unambiguously that we have followed every process required for allocation of coal completely, as stipulated by the government policy”.