Congress MP and director of Jindal Steel and Power Limited (JSPL) Naveen Jindal, along with former Minister of State for Coal Dasari Narayana Rao, has been accused by the CBI of having entered into a conspiracy to obtain a Jharkhand coal block for his companies on false representations. Unknown public servants and members of a screening committee that recommended the allocation are also mentioned in the case.
The 12th case registered by the CBI on Monday in connection with the coal blocks allocation during 2006-09 pertains to alleged irregularities in the joint allocation of the Amarkonda Murgadangal coal block at Birbhum in Jharkhand to JSPL and Gagan Sponge Iron Private Limited. Mr. Jindal is a stakeholder in the sponge firm. In January 2007, the companies applied for coal blocks, and a year later, the allocation was made following a recommendation by the screening committee.
Mr. Rao was the then Minister of State for Coal and, according to CBI officials, was allegedly in a position to influence the screening committee’s decisions.
Allegations of irregularities in the allocation process prompted the CBI to take up investigation as part of a preliminary enquiry registered in the matter a year ago. The probe revealed that JSPL and Gagan Sponge purportedly made false representations regarding their preparedness and eligibility. At least six coal blocks were earlier allotted to the accused companies.
The CBI got a whiff of the alleged conspiracy involving Mr. Rao while probing the financial transactions made between JSPL and his Hyderabad-based company Saubhagya Media.
“It is alleged that they falsely showed less allocations to meet the set criteria,” said a CBI official. “Investigators found out that the listed price of Saubhagya Media was Rs.28 a share, but a Jindal group company bought its shares worth Rs.2.25 crore at the rate of Rs.100 a share. The amount paid was way above the listed price, which raised suspicions about a possible quid pro quo. The shares were bought in December 2008, after the said coal block was allocated.”
The money trail unearthed by the CBI revealed that the amount “invested” in Saubhagya Media originated from Gagan Sponge and was passed on to ND Exim via Jindal Realty in the form of loans before being paid off to Mr. Rao’s company for share purchase. The Congress MP is a shareholder in Gagan Sponge, Jindal Realty and ND Exim, the official said .
The CBI on Tuesday carried out searches at 19 places in Delhi and Hyderabad. “Searches were carried out at the Delhi premises of the four companies with which Mr. Jindal is associated. Mr. Rao’s premises were searched in Hyderabad,” said the official.