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2012 Indian Coal Mining Scam - CBI Investigation

The Central Bureau of Investigation (CBI) is investigating the companies who have misrepresented their capabilities to produce coal from blocks to the screening committee. The investigation relates to the coal blocks allocation scam which was alleged to have caused a loss of Rs. 186,000 crore to the exchequer during the period of 2004-2009 by allotting coal blocks in an irregular manner lacking transparency.

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First FIR

A first set of FIR was filed on 4 September 2012 against five companies, owners of the companies and unknown officials in the Coal Ministry and state governments. Cases of cheating and criminal conspiracy were filed against Vinni Iron and Steel, Nav Bharat Steel, Jus Infrastructure, JLD Yavatmal and AMR Steel who were allotted coal blocks in Jharkhand and Chhattisgarh states.

Companies Booked

1. Vini Iron and Steel Udyog Ltd - Owned by former Jharkand Chief Minister Madhu Koda

2. Navabharat Power Pvt. Ltd - Linked to BJP leader Nina Singh who contested from Chhattisgarh. Her husband VK Singh is a promoter of the firm

3. Jas Infrastructure Capital Pvt. Ltd - Linked to Congress MP Vijay Darda who has 7% stake in the firm

4. JLD Yavatmal Energy Ltd - Linked to Congress MP Vijay Darda. Firm named after his father. Darda says he exited the firm in 2009.

5. AMR Iron and Steels Pvt. Ltd

Vini Iron & Steel

Based in Kolkata.
Promoters: Vijay Joshi 97%, Amit Sharma 2.63%
Income: (FY 2010): Rs. 14.45 lakh
Profit: Rs. 3 lakh
Allegations: Misrepresenting about companies that are shown to be part of group and their net worth.

Navabharat Power

Based in Delhi
Promoters: In 2010, Navabharat Power was acquired by Essar Power. Navabharat Power got a block in 2008.
Allegations: Misrepresentation about group companies for inflating net worth. Promoters sold stake at inflated price.

Jas Infrastructure

Based in Kolkata
Income (FY 2010-11): Rs. 1.80 crore
Profit: Rs. 1.65 core

JLD Yavatmal

Based in Nagpur
Income (FY 2010-11): Rs. 15 lakh
Profit: Rs. 3.89 lakh

AMR Iron & Steel

Based in Nagpur
Income (FY 2010-11): Rs. 1.3 crore (for 9 months)
Profit: Rs. 1.7 lakh
Allegations: Jas Infrastructure Capital, JLD Yavatmal Energy and AMR Iron & Steels are held by the same promoters, the owners of BSE-listed Jayaswal Neco Industries

The CBI alleged that a coal ministry official was in touch with the Dardas at the time of considering their application for coal blocks. They said that they would question Rajya Sabha MP Vijay Darda after the Parliament session is over.

Revealing details on the modus operandi, the CBI said that When the Jayaswals decided to take coal blocks, they didn't have enough funds. They approached Dardas who were also short of funds. They then approached Infrastructure Leasing and Financial Services (IL&FS) and Infrastructure Development Finance Company (IDFC) for assistance and promised them to make major equity holders and took an authorization letter from these two companies. They added these two institutions' net worth to their net worth and showed their eligibility in their coal block application. The coal ministry officials did not properly verify the documents, the CBI said.

Interrogation and Questioning

CBI will question Aditya Birla Group Chairman Kumar Mangalam Birla this week. Kumar Mangalam Birla was named in the Hindalco chargesheet and an FIR was filed against him in October 2013. Apr 21, 2014

Allegations & Reactions

The following politicians are linked to the coalgate scam.

Vijay Darda

Congress MP representing Maharashtra Vijay Darda is alleged to have links to two of the five companies that were charged by the CBI in the coal gate row. Vijay Darda along with his son Devendra holds a 7% stake in Jas Infrastructure. He is also alleged to have links with JLD Yavatmal, which was named after his father.

Darda denied the allegations saying that he has no nexus in the issue as his son is looking after the company. He also said that he exited from JLD Yavatmal in 2009.

Rajendra Darda

Rajendra Darda is the younger brother of Vijay Darda and is the minister for education in Maharashtra. He said that he bought the shares of the company in 2006 worth Rs. 1 lakh but had returned them in 2008. He says that he has no connection to the coal scam company.

S Jagathrakshakan

DMK MP and Minister of State for Information and Broadcasting S Jagathrakshakan is linked to the scam. His family is allegedly part of JR Power Gen Pvt Limited who entered into MOU with PIPDIC five days before the company was allotted coal blocks. JR Power Gen had no standing in the industry at that stage.

Two cases against Grace Industries and Vikash Metals and Powers Limited

The CBI has filed two cases against Grace Industries and Vikash Metals and Powers Limited in the ongoing investigation. The cases were filed on September 22, 2012. The CBI also conducted searches at seven locations including Kolkata , Nagpur, Purulia and other places. Cases under cheating, criminal conspiracy and under sections of the Prevention of Corruption Act were filed against the Managing Directors of the companies and unknown government officials.

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