Coal news and updates

Coal scam: CBI to get coal ministry’s reply on sale of equity

Central Bureau of Investigation (CBI), which is probing alleged irregularities in coal block allocations during 1993-2009, is set to get coal ministry’s final reply on whether or not a key purported violation by a few private firms---sale or transfer of equity shares by any private firm pursuant to allocation of a coal block---was illegal.

In a setback for the agency’s scam probe, the coal ministry has communicated to it that its terms for allocation did not prohibit the sale or transfer of equity shares by any private firm pursuant to allocation of a coal block, said a CBI source. The source said, “The ministry cited a copy of the Rampia and Dip Side of Rampia coal blocks which had no stipulation prohibiting sale or transfer of shares by a coal block allocatee.”

The ministry’s stand weakens the CBI’s case against a few firms — at least three identified so far — during 2006-09 who allegedly sold or transferred equity shares after having a coal block allocated, according to the source. For instance, the CBI 2012 First Information Report (FIR) registered against the Hyderabad-based Navabharat Power Private Limited had accused its promoters and shareholders of allegedly earning illegal profits of over R200 crore by selling their entire holding in July 2010 after allocation of two captive coal blocks (Rampia and Dipside of Rampia blocks) in January 2008.

When asked lawyer Vijay Aggarwal, who represents several accused coal firms in the coal scam, he said, “For a man to be prosecuted, he must contravene a law. If there is no prohibition and a violation has not been codified as an offence, the accused cannot be prosecuted.”

“The coal ministry sought the opinion of the corporate ministry, which in turn advised it to consult the law ministry that is still awaited,” said the CBI source. He said, “The coal ministry will make its stand clear on receiving the legal opinion.”


Source: The Hindustan Times