Indian police conduct raids on coal companies

Search targets premises of five firms that won mining bids in scandal that reportedly caused $33bn loss to exchequer.

    India's police investigating five coal companies have raided premises across the country over the alleged misallocation of lucrative mining rights.

    State auditors recently said India lost $33bn selling coalfields cheaply between 2006 and 2009.

    Government officials and company employees are also under investigation.

    Dharini Mishra, spokeswoman for the Central Bureau of Investigation, said that 30 premises had been visited as detectives examined whether coal companies were guilty of cheating in a scandal that has rocked Manmohan Singh's federal government.

    "We have registered an FIR (First Information Report) after conducting raids in 10 cities," Mishra told AFP news agency, adding that coal company offices in New Delhi, Mumbai and Kolkata had been targeted.

    An FIR is a written report detailing an alleged crime, prompting an investigation. Mishra declined to name the companies involved.

    Corruption cases

    At the heart of the CBI's investigation is the allegation that some of the companies were set up only to obtain the coalfields being allocated by the government and then sell them at profit.

    Media reports allege that the companies involved misrepresented their ability to mine the coal.

    The auditors' report said of the 86 coal blocks, which were to produce coal by 2010-11, "only 28 blocks (including 15 allocated to the private sector) started production as of March 31, 2011".

    The CBI will investigate whether some of the firms were set up only to get the coal blocks allocated by the government, and then sold them on at huge profits.

    Singh's coalition government, led by the Congress party, has been beset by a string of corruption cases since re-election in 2009 and the latest allegations of mismanagement have led to renewed pressure on him.

    The BJP and other opposition parties have forced parliament to be adjourned daily over the issue and have demanded the prime minister's resignation.

    Singh, who along with being prime minister was also in charge of the coal ministry when the mining rights were allocated, has strongly rejected charges over the coal scandal, saying the auditor's findings were not supported by facts.

    SOURCE: Agencies


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