India investigative unit drops coal scam case

Ex-coal secretary and Birla chairman were being investigated over sale of under-priced coal contract by the government.

    The case, filed late last year, sparked widespread condemnation from industry leaders and politicians [File: AFP]
    The case, filed late last year, sparked widespread condemnation from industry leaders and politicians [File: AFP]

    India's Central Bureau of Investigation (CBI) has said it is to close a coal scam case against billionaire Kumar Mangalam Birla and a former top bureaucrat that surfaced in 2012 after a government auditor's report.

    The CBI will file a closure report on the case against Birla and former coal secretary PC Parakh very soon, CBI spokeswoman Kanchan Prasad told the Reuters news agency on Monday.

    "Obviously if a closure report is being filed there's no criminality [on the part of Birla and Parakh]," she said.

    India's federal auditor had alleged that the government's under-priced sale of coal blocks may have cost the exchequer revenues of $33bn, although industry watchers and the previous government had cast doubts on the figure.

    Indian media has dubbed the controversy as "coalgate".

    Hindalco contract

    The CBI filed the case against Birla and Parakh late last year in relation to a block allocated in 2005 to Hindalco Industries, part of the $40bn Aditya Birla Group. Kumar Mangalam Birla is the chairman of the group.

    The case had sparked widespread condemnation from industry leaders and politicians alike given Birla's stature as a leading Indian entrepreneur.

    Hindalco had denied any wrongdoing and former Prime Minister Manmohan Singh, who was in charge of the coal ministry when the allocation took place, has defended the decision to award the block to Hindalco.

    Prasad said investigations against Jindal Steel and Power in a different coal block allocation will continue.

    Jindal, controlled by former Congress party politician Naveen Jindal, has said it was co-operating with the CBI.

    Accusations of crony capitalism in allocating India's resources, from coal to mobile telephone bandwidth, had dogged the government of Singh.

    His Congress party suffered its worst ever defeat in polls concluded about three months ago.

    SOURCE: Agencies


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