The Central Bureau of Investigation’s crackdown on those involved in the alleged scam in coal block allocations came out in public today with raids being carried out across 11 cities.

The CBI has been carrying out investigations ever since it was entrusted the job by the Central Vigilance Commission (CVC) three months ago. The investigating agency on Tuesday filed separate First Information Reports (FIRs) against five private companies, 20 private company officials (currently or earlier associated with these firms) and unknown Government officials who are supposedly involved in the scam.

“No arrests have been made on Tuesday. Searches have been made at 30 locations in 11 cities, including Nagpur, Kolkata, Bhilai, Yavatmal, Raipur, Dhanbad, Ranchi, Hyderabad, Mumbai and Delhi,” said a CBI spokesperson. The five companies named in the FIRs,, except AMR Iron & Steels, were also named by the Comptroller and Auditor General of India (CAG) in its review.

According to the CBI, these firms made false representations about their structure, net worth, tie-up with other players and details of existing coal blocks while applying for new blocks. Some of the promoters have also sold their stake in the companies soon after allocations.

Same promoters

To win coal blocks, some companies had signed MoUs with other players (for short durations), which enhanced their book value and showed higher net worth in the applications. Among these players were also those who already had blocks, but did not disclose them while applying for new ones, sources privy to the developments said.

In fact, CBI investigations show that three companies — AMR Iron & Steels, Jas Infrastructure and JLD Yavatmal — have same promoters as well. Besides, they also had six blocks under their wings before seeking new mines.

Nagpur-based Abhijeet Group is reportedly linked to these three companies and owns stake in them. The Group has interests in power, roads, mining, ferro alloys, steel and cement.

When asked whether any of his relatives got coal blocks, Coal Minister Sriprakash Jaiswal quipped that he has lakhs of friends and all Jaiswals are his relatives. “The licence in question was allotted not during my tenure but during the NDA’s time,” he said.

Navbharat Power showed a list of banks that are willing to finance the 1,050 MW power project in Odisha for which it was seeking a captive coal block. But after the mine was allocated, promoters sold their stake.

Ruias-promoted Essar Power Ltd bought over 100 per cent equity of Navbharat Power from erstwhile promoters Navbharat Ventures and Malaxmi Ventures in July 2010.

CBI investigations found that the ‘Prasad brothers’ who owned Navbharat Power sold their personal shares of 5,000 in the company to Essar for Rs 50 crore. At the same time, remaining company shares worth Rs 85 crore were sold to the same buyer for just Rs 12 crore. At present, the brothers do not own any stake in Navbharat Power.

However, sources privy to the transaction between Essar and Navbharat Power told Business Line , “The total agreed consideration was split between the promoters (who also held direct stake in Navbharat Power) and 100 per cent promoter-owned companies as per their requirements.”

Also, the Rampia and Rampia Dip-side coal blocks were allocated to Navbharat Power (12.5 per cent share) in January 2008.

This was more than two years prior to Essar Power came into the picture, they say.

In the case of Vini Iron & Steel Udyog, CBI found that ownership pattern of the company changed after it submitted application for new coal block. The company told the Government that it has partnership with 15 companies. But the CBI found that nine of these firms never had any relationship with Vini.

>siddhartha.s@thehindu.co.in

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