HEAT in the coal block allocation scam finally reached the doorsteps of two Congress MPs ? Naveen Jindal and former minister of state for coal Dasari Narayana Rao ? with the Central Bureau of Investigation (CBI) accusing Jindal?s firm, Jindal Steel and Power (JSPL), and Gagan Sponge Iron of obtaining coal blocks by ?misrepresenting? facts and allegedly bribing Rao. Congress MP Vijay Darda and his brother, MLA Rajendra Darda, are already named in the CBI FIR. The agency plans to question Jindal and Rao jointly soon.

In its FIR, the agency said JSPL and Gagan Sponge were allocated the Amarkonda Murgadangal block in Jharkhand in January 2008 while a transaction of R2.25 crore was done in December 2008 with Sowbhagya Media, a firm partially owned by Rao. Describing the money trail, the agency said after allocation of the coal block Gagan Sponge transferred R2.25 crore into the accounts of Jindal Realty, which further shifted the money to the accounts of New Delhi Exim, both controlled by Jindal.

The money was then used to buy shares of Sowbhagya Media for R100 each, against the market price of R28. Officials said Rao allegedly influenced screening committee members to give undue favours to Jindal and Gagan Sponge. According to the CBI, Rao, a former Rajya Sabha MP, controls 59% of shares in Sowbhagya Media through Siri Media, in which Rao owns 80%. Both firms are based in Hyderabad. Rao was MoS (coal) in 2004-06 and 2006-08. He was earlier examined by the CBI in connection with the coal block allocation to Vijay Darda?s companies.

The FIR has been registered under sections 420 (cheating) and 120 b (criminal conspiracy) of the IPC and 13 (1) (d) of the Prevention of Corruption Act. The CBI also alleged that JSPL applied for coal blocks in January 2007 and at the time of application, misrepresented facts on three parameters. ?JSPL and Gagan claimed that they had sufficient land to build the power plants but it was found to be a false claim while they also painted a rosy picture regarding water supply. Jindal also gave false representation regarding his previous allocation and its development, which is considered to be an important criteria for allocating coal blocks,? explained a senior CBI official.

Soon after registering the case, the agency carried out searches at 19 locations including Delhi, Hyderabad and Sonepat including Jindal?s house at Prithviraj Road. Since he was abroad, the agency sealed some of the almirahs and a vault as Jindal had not authorised anyone to operate them. Screening committee members who gave the clearance are also going to be examined, said officials.

The CBI will now also start an examination of other coal blocks at Gare Palma in Chhattisgarh and Jitpur in Jharkhand, which were also allocated to JSPL during 2006-09. While the coal blocks at Gare Palma are being developed by Jindal with Nalwa Sponge Iron, the Jharkhand coal block allocated in 2007 is being developed by Jindal alone. When contacted, Manu Kapoor, head of external affairs, JSPL said in an email: ?JSPL, as a law-abiding company, is governed by a strong ethical code of conduct. This is an ongoing CBI investigation into coal block allocations. At this stage of investigation, JSPL is committed to fully cooperate with CBI.?