CBI files first chargesheet in coal scam

Investigating agency names Essar-owned Navabharat Power for cheating the government to bag a coal block in Jharkhand

By Anupam Chakravartty
Published: Monday 10 March 2014


The first chargesheet filed by the Central Bureau of Investigation (CBI) in connection with the coal block allocation scam has named Hyderabad-based Navabharat Power limited, owned by the Essar group. The chargesheet, filed in a city court on Monday and submitted to the Supreme Court as part of CBI’s status report, relate to alleged misrepresentation of facts and making fraudulent claims to secure allotments of coal blocks between 2006 and 2009.

On February 11, the Supreme Court had asked CBI to file status report on the six finalised cases within one month.

Rs 200 crore windfall gain

In the chargesheet; CBI has named both the directors of the power company, P Trivikrama Prasad and Y Harish Chandra Prasad. The CBI chargesheet has maintained that Essar Power purchased the company in 2010—much after the alleged fraudulent allotments. It adds that after allocation of coal blocks, the promoters and shareholders of Navabharat Power sold off their entire shareholdings in July 2010 to Essar Power at a “huge profit of over Rs 200 crore”. Submitting its chargesheet before special CBI judge, Madhu Jain, the investigation officials have charged the owners along with unknown coal ministry and Jharkhand government officials, under sections 120-B (criminal conspiracy) and 420 (cheating) of the Indian Penal Code.

With the aid of unknown officials from the coal ministry and Jharkhand government, the accused power company allegedly made false claims of its net worth to bag the coal blocks. “Enquiry also revealed that officials of the Union Ministry of Coal, in pursuance of criminal conspiracy, wilfully and purposefully did not scrutinise the documents regarding false claims/concealment of facts by Navabharat Power and thus facilitated the company in getting undue advantage in allocation of Rampia and Dip Side of Rampia coal blocks,” states the chargesheet. The said coal blocks with a reserve of 645 million tonnes are a part of Ib Valley coal tract in Sundergarh district near Jharkhand-Odisha border, which was jointly allocated to Sterlite Energy Company, GMR Energy, Arcelor Mittal, Lanco and Reliance Energy. In its FIR against Navabharat Power, CBI said the Union Ministry of Coal had invited applications for allocation of 38 coal blocks, including 15 for the power sector and 23 for non-power sector, through an advertisement in November 2006.

CBI has investigated about 87 companies following Comptroller Auditor General of India's explosive report on coal block allocation scam spanning two decades worth Rs 1.86 lakh crore. According to an earlier status report filed by the investigating agency, it had concluded the investigation of 38 companies, while six chargesheets have been finalised.

The investigating agency has already filed 16 FIRs against AMR Iron and Steel, JLD Yavatmal Energy, Vini Iron and Steel Udyog, JAS Infrastructure Capital Pvt Ltd, Grace Industries, Jindal Steel and Power, Rathi Steel and Power Ltd, Jharkhand Ispat, Green Infrastructure, Kamal Sponge, Pushp Steel, Hindalco, BLA Industries, Castron Technologies and Castron Mining.

Letter to M/s. Sterlite Energy Ltd., Lanco Group Ltd., GMR Enerergy Ltd., Navbharat Power Pvt. Ltd., Arcelor Mittal Ltd., Reliance Energy Ltd., Reg. Review of coal blocks by the Inter-Ministerial Group (IMG) in its 24th meeting

Meeting notice of the Inter-Ministerial Group (IMG) to undertake periodic review of the development of allocated coal blocks

Review of allotment, development and performance of coal/lignite blocks

Prime Minister's statement in Parliament on the performance audit report on allocation of coal blocks and augmentation of coal production

Performance audit on allocation of coal blocks and augmentation of coal production

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