CBI to close coal block case against Kumar Mangalam Birla

After a 10-month probe, the Central Bureau of Investigation has decided to file a closure report in the coal block allocation case involving industrialist Kumar Mangalam Birla and former Coal Secretary P C Parakh as the agency could not find any evidence in this matter.

The case against the two was registered in October last year by the agency which 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 to show "undue favours".

The FIR related to allocation of Talabira II and III coal blocks in 2005 and CBI had charged Birla, Parakh and other officials of Hindalco under various IPC sections including criminal conspiracy and criminal misconduct on the part of government officials.

However, during the investigations, the CBI found that there was no "quid pro quo" on the part of Parakh and there was no wrongdoing in allocation of coal blocks to Hindalco, agency sources said today.

The case had triggered an intense attack against the CBI by the former bureaucrat and India Inc but the agency Director Ranjit Sinha had maintained that a final decision on it would be taken only after the probe was over.

Unfazed by the criticism, Sinha had repeatedly said that the agency was not in the business of witch-hunting and a closure report would be filed in case there was no evidence.

The sources now said that a closure report will be filed in the court after which the court will decide about the investigations carried out by the agency.

In its FIR, the agency had alleged that during the 25th Screening Committee meeting, chaired by Parakh, applications of Hindalco and Indal Industries were rejected for mining in Talabira II and III "citing valid reasons".

On the recommendations of the Screening Committee, the coal blocks were allocated to Mahanadi Coalfields and Neyveli Lignite Corporation, both public sector undertakings. These recommendations were placed before the "Competent Authority" which agreed with Parakh, who later issued letter of allocation to the PSUs on June 16 and July 15 of 2005.

Within days, a "personal meeting" took place between Parakh and Birla in which the industrialist requested for the allocation of Talabira II coal block, CBI said.

"Pursuant to these letters and personal meeting between Parakh and Birla, Parakh, by abusing his official position as a public servant recommended the allocation of Talabira II along with Talabira III coal block to Hindalco Industries Limited, along with other two companies without any valid basis or change in circumstances and with the sole intention to show undue favours to Hindalco Industries Limited," the agency alleged in its FIR.

The agency has alleged that Parakh recommended formation of a joint venture between Mahanadi Coalfields, Neyveli Lignite and Hindalco with equity share holding of 70 per cent, 15 per cent and 15 per cent respectively. The FIR alleged that inclusion of Hindalco reduced the share of Neyveli Lignite in the coal field.

"Due to this arrangement, the proposed power project of the NLC could not take off as planned," it alleged.

Defending his decision, Parakh had said "there is absolutely nothing wrong with the decision. It was a very fair and correct decision that we took. I don't know why CBI thought that there is a conspiracy."