Coal news and updates

Mukesh Gupta, promoter of city-based Grace Industries, who allegedly profiteered from the controversial coal block allocation policy, is now under the Enforcement Directorate's (ED) scanner. This company, which was allotted the Lohara East Block in 2008 for setting up a sponge iron plant, was eventually sold by Gupta, reportedly at a huge profit.

 

As a case has been registered by Central Bureau of Investigation (CBI) against his company for alleged misrepresentation of facts while securing the mine, the ED probe is looking into the aspect of illegal proceeds in the hands of Gupta, who sold his stake in it.

 

Some Nagpur-based businessmen had made a killing out of the allocation policy. Their modus operandi was to get a coal block allotted in their company's name, and then sell the entire stake to a third party for a hefty premium. The premium was actually consideration for the coal block allotted to the company.

 

In the case of Grace Industries, the sleuths have pegged the entire deal to be worth over Rs160 crore. Gupta sold his company to San Vijay Group, another city-based company, along with the assets and liabilities.

 

The proceeds of the deal fall under the larger definition of money laundering, which covers any wealth earned through illegitimate means. Here, it was through the sale of coal block, which is a national asset.

 

It is learnt the sleuths are in an advanced stage of investigation, and had lately questioned banks about the loans taken by Grace Industries as well as Mukesh Gupta and his wife. Gupta is the brother of Padmesh Gupta, a prominent businessman from Nagpur, dealing in coal.

 

Similar deals were struck by original promoters of BS Ispat and Virangana Steels, both of Nagpur. BS Ispat was promoted by a trio of local businessmen and is reported to have been sold for almost Rs300 crore. Sources say the groundwork is being done to start an ED probe in these deals too.

 

Even as the buyers got the mines in the other two cases, the one allotted to Grace Industries was eventually de-allocated for want of environmental clearance. The mine was located close to the Taloba tiger reserve.

 

But by that time the promoters of the company had changed. So, even though Gupta may have profited by selling the stake in Grace Industries, San-Vijay Group did not get the coal block it was eyeing. Following the deal, there was a dispute between the two parties, and this matter is under arbitration.

 

So far, the ED has also registered cases and investigated Jayaswals Neco and Topworth Group in the Coalgate case, but that was mainly for mining beyond the permitted levels.

 

 

Source: ToI