CBI spokesperson Kanchan Prasad said the closure report is likely to filed in the case this week.
The agency had reached conclusion to include names of Birla and Parakh in the FIR in connection with allocation of Talabira-II coal block after scrutinising related files during its nearly 16 month-long preliminary enquiry.
CBI sources said that allegations levelled by it in the FIR could not be substantiated by it.
Immediately after the case was registered by the agency on October 15, 2013, Prime Minister's office had given a detailed clarification saying, "the Prime Minister is satisfied that the final decision taken in this regard was entirely appropriate and is based on the merits of the case placed before him."
The agency's decision to file the FIR in which it accused Birla and Parakh of criminal conspiracy and criminal misconduct on the part of government officials had come under criticism from the former Coal secretary who said in his book that "CBI is either outright incompetent or is playing a deeper game."
He blamed CBI Director Ranjit Sinha of abusing his office by accusing him and Birla of conspiracy and corruption.
The FIR related to allocation of Talabira II and III coal blocks in 2005 and CBI had charged Birla, Parakh and other officials of Hindalco under various IPC sections including criminal conspiracy and criminal misconduct on the part of government officials.
In its FIR, the agency had alleged that during the 25th Screening Committee meeting, chaired by Parakh, applications of Hindalco and Indal Industries were rejected for mining in Talabira II and III "citing valid reasons".
The agency had alleged in its FIR that on the recommendations of the Screening Committee, the coal blocks were allocated to Mahanadi Coalfields and Neyveli Lignite Corporation, both public sector undertakings.
These recommendations were placed before the "Competent Authority" which agreed with Parakh, who later issued letter of allocation to the PSUs on June 16 and July 15 of 2005.
Within days, a "personal meeting" took place between Parakh and Birla in which the industrialist requested for the allocation of Talabira II coal block, CBI had said.
"Pursuant to these letters and personal meeting between Parakh and Birla, Parakh, by abusing his official position as a public servant recommended the allocation of Talabira II along with Talabira III coal block to Hindalco Industries Limited, along with other two companies without any valid basis or change in circumstances and with the sole intention to show undue favours to Hindalco Industries Limited," the agency had alleged in its FIR.
The agency has said that Parakh recommended formation of a joint venture between Mahanadi Coalfields, Neyveli Lignite and Hindalco with equity share holding of 70 per cent, 15 per cent and 15 per cent respectively. The FIR alleged that inclusion of Hindalco reduced the share of Neyveli Lignite in the coal field.
"Due to this arrangement, the proposed power project of the NLC could not take off as planned," it alleged.
Defending his decision, Parakh had said "there is absolutely nothing wrong with the decision. It was a very fair and correct decision that we took. I don't know why CBI thought that there is a conspiracy."
CBI to close case against Birla and Parakh this week
(Reuters) The Central Bureau of Investigation (CBI) said on Monday it would 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 P C Parakh very soon, CBI spokeswoman Kanchan Prasad told Reuters.
"Obviously if a closure report is being filed there's no criminality (on the part of Birla and Parakh)," she said.
The CAG had alleged that the government's under-priced sale of coal blocks may have cost the exchequer revenues of $33 billion, although industry watchers and the previous government had cast doubts on the figure. Indian media has dubbed the controversy as "coalgate".
The CBI filed the case against Birla and Parakh late last year in relation to a block allocated in 2005 to Hindalco Industries Ltd, part of the $40 billion 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 even the then Prime Minister Manmohan Singh, who was in charge of the coal ministry when the allocation took place, defended the decision to award the block to Hindalco.
Hindalco shares were down 1.4 per cent in late morning trade in a wider market that was up 0.67 per cent.
Prasad, however, said investigations against Jindal Steel and Power Ltd in a different coal block allocation will continue. Jindal, controlled by former Congress party lawmaker Naveen Jindal, has said it was cooperating with the CBI.
Accusations of crony capitalism in allocating India's resources from coal to mobile telephone bandwidth had dogged the former government of Manmohan Singh. His Congress party suffered its worst defeat in polls concluded about three months ago.