Coalgate update

A day after it lodged an FIR against Hindalco and its boss Kumar Mangalam Birla, the CBI said it had recovered Rs 25 crore in cash from the corporate office of the aluminum major in New Delhi.
The cash was found by the CBI team which searched the Hindalco office in connection with the FIR on Tuesday into the illegal allocation of a coal mine to the company.
The money was handed over to the income tax department for a probe.The I-T department is expected to issue a notice to the company shortly. When contacted, Hindalco’s spokesperson reacted to the CBI’s claim by saying: “We have to find out”.
CBI sources said the money was seized and handed over to the I-T department after company officials failed to account for the big amount. Sources also claimed that documents relevant for their investigation into the mining rights for a coal block in Odisha, Talbaria II, to Hindalco were recovered during the searches carried out in the offices of the company in Delhi and Mumbai. Sources said officials belonging to CBI’s Economic Offence Wing also found gold coins in the offices.
The FIR against Birla and Hindalco, along with former coal secretary P C Parakh, has sent jitters among industry and bureaucracy. Many consider Birla to be a respecter of rules, while Parakh has a reputation for probity. However, CBI sources justified the action by pointing to the details of their FIR against the top-notch businessman and the bureaucrat widely perceived to be a stickler for rules. The FIR alleges that the award of 15% mining rights for Talabira II forced Neyveli Lignite Corporation (NLC), the PSU which was allotted the coal block earmarked exclusively for government entities, to scrap its plan to set up a power plant.Reacting to Parakh’s allegation that “CBI did not understand the case”, sources in the agency said the FIR was registered after a painstaking process of due diligence and was based on facts.
They also said the agency would inform the Supreme Court about the FIR during the next hearing on Coalgate.In its FIR, the CBI alleged that Parakh upturned his own decision in giving Hindalco mining rights for 15% of Talabira II’s coal deposit.
Significantly, it has not accused the former bureaucrat of a quid pro quo: in short, that he changed his decision for gains, only charging him with misuse of official position.The agency also refuted Parakh’s claim that “CBI did not understand the case”. A senior officer said, “The case has been registered after thorough enquiry and is based on documents. In fact, we are going to inform Supreme Court about it in the next hearing.”
According to the FIR, the Parakh-led screening committee under the coal ministry —the body which allocated coal blocks — had in its 25th meeting in June 2005 turned down Hindalco’s application for the allocation of Talabira II block. The coal block was allocated to NLC to be mined along with Talabira III with another PSU, Mahanadi Coalfields Ltd (MCL).Accordingly, the allocation letter was issued to NLC and MCL on July 15, 2005.The CBI has alleged that Parakh changed his stand after a meeting with Birla in the same month, stressing that the businessman had written two letters, on May 7, 2005 and, again on June 17 that year, to stake Hindalco’s claim for the Talabira II coal block.

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