Essar's Kirandul offices searched; senior officials summoned for questioning
Storm clouds have gathered around the mountain called Bailadila, or ‘hump of the ox', one of the country's richest iron ore mines and the place where B. K. ‘Lala' Aggarwal's family came in search of fortune. Old-timers say Mr. Lala's father sold halva from a pushcart to make ends meet. When Mr. Lala was apprehended at a weekly market in Chhattisgarh's Dantewada district last week, the police claim to have caught him with Rs. 15 lakh in a plastic bag.
The cash, police claim, was meant for the banned Communist Party of India (Maoist) as ‘protection money' to allow the Essar group to continue operating a plant that processed eight million tonnes of iron ore every year at the foot of Bailadila. Mr. Lala worked as a private contractor for the Essar plant and his interrogation, police say, has revealed a dense web of connections between the Maoists and the mining company, private contractors, and even local journalists.
In their first information report, the police have accused Mr. Lala of waging war against the State under sections 121 and 124 (A) of the Indian Penal Code. They have also alleged that money from the Essar mining corporation was being used to finance Maoist attacks, according to a policeman familiar with the investigations. An Essar spokesperson has denied these claims.
Dantewada Superintendent of Police Ankit Garg confirmed that the police have summoned senior Essar officials for questioning and have raided the office of Jai Johar, an NGO set up by the Essar Foundation in collaboration with local journalist Pawan Dubey. The police suspect Mr. Dubey of using Essar's corporate social responsibility programme (CSR) as a front for diverting money to the Maoists. He has been asked to appear for questioning, but is currently absconding.
Essar's operations in Dantewada consist of a processing plant that converts iron dust from the Bailadila mine into slurry, and a 265-km pipeline that carries this slurry to another plant in Visakhapatnam, Andhra Pradesh. Here the slurry is made into pellets and shipped around the Indian peninsula to a giant plant in Hazira, Gujarat, where the company produces 10 million tonnes of steel every year.
The pipeline was constructed in 2001 and cuts through Maoist controlled territory in Orissa and Chhattisgarh. In June 2009, the Maoists destroyed a section of the pipeline and a pumping station in Chitrakonda, Orissa. Officials at Essar said the attack disrupted the company's supply chain. “With the pipeline we were evacuating seven million tonnes of iron a year…without it we could only manage between 3.5 and 4 million tonnes,” said a senior official. The pipeline lay unrepaired for 18 months, at which point Mr. Lala made his appearance.
“Mr. Lala was a small time contractor with NMDC and the public works department,” said a senior police officer, “and his financial situation was very weak.” Since then, Mr. Lala has handled nearly Rs. 12 crore-worth of projects at Essar and has bought 12 trucks and two Tata Safari SUVs, said the officer, speaking on condition of anonymity because investigations and raids are still on.
“Essar deposited between Rs. 7 crore and Rs. 8 crore in his account in the last six to eight months. We suspect Mr. Lala is one of the people who struck a deal with the Maoists to allow the pipeline to be repaired,” said the police officer, adding that Mr. Lala had carried out most of the reconstruction work in Chitrakonda for Essar. “Parts of the pipeline were also repaired by Messrs Anil Construction,” he said.
In the eyes of the police, Mr. Lala's meteoric rise in Dantewada was mirrored by that of Mr. Dubey, employee and part owner of Jai Johar, a recently-established NGO that carries out Essar's CSR projects. While Essar officials said that Mr. Dubey received very little funding from Essar, police sources estimate that Mr. Dubey received between Rs. 5 crore and Rs. 8 crore. Soon after, the police say, he bought himself an appropriately named Toyota Fortuner, a luxury SUV worth about Rs .18 lakh. The Hindu was unable to independently verify these claims.
While the Jai Johar office was raided on Thursday, Mr. Dubey is yet to appear before the police. “We were very curious about the source of these funds,” said an investigating officer. “While Essar is fully cooperating with authorities…it is unfortunate that these baseless and malicious allegations are being circulated by vested interests without any basis,” said an Essar spokesperson in an e-mailed statement, “Essar strongly refutes these allegations. Essar is a law-abiding corporate.”