CBI widens net, probes coal allocation to PSUs

Written by Rajat Arora | New Delhi | Updated: Sep 29 2012, 09:55am hrs
The CBI probe into the coal block scam is set to widen as the agency has now registered a preliminary inquiry into the allocation of captive coal blocks to state-owned mineral corporations and public sector undertakings who have formed joint ventures with private sector companies for extraction and sale of the mineral.

These companies get allocation from the Centre under the government company dispensation route and are free not only to use coal for captive use, but also sell in the market for commercial gains. However, several of these state entities have formed business partnerships with private sector companies, allowing them backdoor entry into commercial nmining of coal. Under current regulations, private companies are barred from coal mining for commercial gains.

The controversial joint venture method of coal block allotment allowed private players to earn huge profits by developing the coal mine in which the state corporations have the majority stake.

A preliminary inquiry has been registered to inquire into the allocation of coal blocks and awarding of contracts for formation of joint ventures by government companies (including state PSUs) under the government dispensation category 1993. This is the third inquiry into the coal block allocation scam, a CBI officer said.

Earlier, the agency didnt have the mandate to probe the allocation of coal blocks to joint ventures of state and Central government PSUs with private companies. Companies, such as Monnet, Vedanta, Moser Baer, Adani and the Jaypee Group, which have tied up with mining and mineral corporations of Jharkhand, Chhattisgarh, Orissa and Madhya Pradesh, are now under the CBI scanner, along with the officials of state government who played an instrumental role in allocation of these blocks.

An aide of BJP president Nitin Gadkari, Ajay Sancheti, whose company allegedly got coal blocks in Chhattisgarh by entering into a joint venture with a state-owned firm has now come under the CBI scanner. All other companies who have got into similar ventures with state corporations using their political links arouse suspicion and could come under the agencys scanner, said the official quoted earlier.

On Thursday, the CBI had filed a preliminary enquiry into the allocation of 42 coal blocks between 1993 and 2004. the CBI is already probing the allocation of 64 coal blocks to 142 companies between 2006 and 2009 and has also filed FIRs against seven private firms.

The CBI has already registered two enquiries into the allocation of coal blocks between 1993 and 2004 and is also probing allocation of 64 coal blocks between 2006 and 2009, where it has also filed first information reports against seven private companies for fudging their balance sheets.