Probe Manmohan Singh, Birla roles in coal blocks: Court to CBI

The court directed the agency to file a status report of its further probe in the case on January 27 next year.

Manmohan Singh, Coal scam

Former PM Manmohan Singh on Tuesday saw the long arm of the law at his doorstep as a special court asked the Central Bureau of Investigation (CBI) to probe further a coalfield allocation case involving Aditya Birla Group firm Hindalco Industries and record the statements of Singh and other officials.

The court rejected the closure report filed by the investigating agency in the case in August. In October 2013, the CBI had lodged FIRs against the group’s chairman Kumar Mangalam Birla, ex-coal secretary PC Parakh and others relating to the allocation of the Talabira II and III coal blocks in Odisha to Hindalco in 2005. Singh, then prime minister, was also holding the charge of the coal portfolio.

The FIRs had alleged that Parakh had reversed his decision to reject coal block allocation to Hindalco within months “without any valid basis or change in circumstances” and shown “undue favours” by allowing the private firm to share the Talabira II block with state-run Neyveli Lignite. The decision, the CBI said, resulted in a loss to the exchequer.

“As the matter is between the CBI and the Court, and also sub judice, it is inappropriate for us to comment,” Hindalco said in a statement on Tuesday. The firm’s shares fell as much as 7.4% after the court order and ended down 5.5% on the BSE, while the Sensex was down 1.97%.
Refusing to accept the CBI’s closure report, special CBI judge Bharat Parashar said, “I have ordered further investigation. I desire that statements of the then minister (Singh) of coal be recorded besides other officials concerned.”

The court also directed the agency to file a status report of its further probe in the case on January 27 next year.

The court’s observations had came after the CBI had submitted that initially it felt Singh’s examination was required, but later it was found to be not necessary. At one of point of time, the CBI counsel also said questioning of Singh was “not permitted”, adding that it could, however, reach the Prime Minister’s Office.

The CBI in 2013 registered a case against Parakh, Birla and unknown officials alleging a criminal conspiracy among them and abuse of position by Parakh in reversing a screening panel decision to allot the Talabira II coal block to public sector Neyveli Lignite and instead giving it to Hindalco. But softening its stance, the agency this August told the special court that “evidence collected during investigation did not substantiate the allegations levelled against the persons named in the first information report”.

It also filed a closure report subsequently but did a volte face in November after the court remained unconvinced of the grounds on which closure was sought. The agency then said there was prima facie enough evidence against both Birla and Parakh and urged the court to take cognizance of the charge sheet.

Following the Supreme Court decision to cancel all 204 captive coal blocks, the Narendra Modi government has commenced the groundwork for reallocating them and the Cabinet has recently cleared the auction methodology. A lot of 74 blocks will be reallocated by March 15 next year; while some of these will be made available to companies with specified end-use plants like power, steel and cement, including those in the private sector, through an e-auction process that will commence on February 11. The remaining blocks will be allotted to central and state PSUs sans auction.

Parakh, it may be recalled, had strongly refuted any wrongdoing on his part and said the committee’s decision was changed after he had received a request sent by Birla from the PMO for reconsideration.

The former bureaucrat then went on to write a book where he claimed that he had pushed for reforms, including e-marketing and open auction of coal blocks and that had Singh desired, he could have averted the larger coal scam that subsequently led to cancellation of 204 coal blocks by the Supreme Court for arbitrary and non-transparent allocation. The Comptroller and Auditor General had said wrongful allocation of these coal blocks had caused staggering losses to the exchequer.

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