CBI registers 20th FIR in coal scam; Jayaswal Neco named

Written by PTI | New Delhi | Updated: May 24 2014, 07:23am hrs
CBI has registered a fresh FIR in the allocation of coal blocks scam against Nagpur-based Jayaswal Neco Industries and unknown public servants for allegedly mining coal in excess to prescribed limit and diverting it.

CBI sources said the case against the company has been registered for alleged criminal conspiracy, criminal breach of trust and under provisions of Prevention of Corruption Act.

Agency teams carried out coordinated searches at the firm's office in Nagpur, two places in Raipur and one place in Raigad, they said.

The agency has registered the FIR as an offshoot of its preliminary enquiry into the allocation of coal blocks during the period 1993-2005.

The Gare Palma IV/4 coal block in Mand Raigarh, Chhattisgarh was allocated to the company in August, 1999 for their sponge iron plant stipulating that the party will wash the coal in a washery to a 20 per cent ash level and the middling produced by washing non-coking coal for its sponge iron plant will be used in its captive power plant.

It is alleged that the company resorted to excess mining of nearly 5.6 lakh MT coal since 2007-08 and onwards without obtaining prior permission from Central Government. CBI sources said the company was allowed to mine about 15.6 lakh MT coal whereas it mined 21.2 Lakh MT of coal.

The agency alleged that company intimated excess coal production to Coal Controller and state government authorities but no action was taken by them.

CBI sources said the company has so far only 0.255 MTPA capacity sponge iron plant instead of one MTPA as claimed by the company at the time of applying and despite that Coal Ministry approved revised mine plan, increasing the rated capacity of the mine from 0.48 MTPA to one MTPA.

The agency alleged that conditions stipulated that no coal mined from the block shall be sold, delivered or disposed of except for the stated captive mining purpose which was for the consumption in sponge iron plant.

CBI alleged there has been no washery set up by the company and the coal is being directly used in their sponge iron plant and resorted to illegal use in captive power plant, without any approval for its use in power plant obtaining undue pecuniary benefit by the illegal acts.

It alleged that initial estimates of coal reserves were at 125 million tonnes in the mine, the detailed exploration carried out by the company itself engaging private consultants and showed the extractable reserves of 15.5 MT.

CBI alleged that enquiry further revealed that the average grade of coal in Gare Palma is depicted of having average ash contents of 40-42 per cent. However, the company without establishing any washery utlised it directly in their sponge iron plant vindicating that coal quality was superior.

Denying charges of alleged excess mining, a company official told PTI that "extraction of coal is as per the revised mining plan, which has been duly approved by the Ministry of Coal, Government of India" and the company has documentary evidence in support of this.

On the alleged irregularity in consumption of coal, he said, "We would like to clarify that there is no irregularity in consumption of coal from Gare Palma IV/4 coal block."

The coal is being used in the specified end-use sponge iron and captive power plants, he added.

The company said that since it has not recieved the copy of FIR it is "not aware of the exact nature of allegations and present clarification is issued based on media reports."

It admitted that CBI officials visited its premises and collected data with the regard to case in which it "extended full cooperation to the officials."

The shares of the company closed at Rs 15.48 a scrip on BSE toay, down 9.95 per cent on the BSE.