This Article is From Aug 29, 2014

CBI Drops Coal Scam Case Against Industrialist Kumar Mangalam Birla

CBI Drops Coal Scam Case Against Industrialist Kumar Mangalam Birla

The case against Kumar Mangalam Birla, chairman of the Aditya Birla Group, was filed late last year. (File photo from PTI)

New Delhi: The CBI has said it would like to end its investigation into one of the most controversial episodes of the scandal known as "Coal-gate" - as it has found "no evidence of criminality" in the allegation that one of the country's most-respected industrialists, Kumar Mangalam Birla, colluded with a former top coal ministry bureaucrat, PC Parkah, to illicitly land a coal block for Hindalco, part of the $40 billion Aditya Birla Group. Kumar Mangalam Birla is the chairman of the group. (Coal case: Kumar Mangalam Birla says 'let CBI do its work')
 
The CBI has filed a closure report in a Delhi court for this case; the judge will decide on Monday whether to accept that the case can be dropped.

The case against Mr Birla and Mr Parakh, who retired as Coal Secretary, was filed late last year. It had sparked widespread condemnation from industry leaders and politicians alike given Mr Birla's stature as a leading Indian entrepreneur. (Coal case against Kumar Mangalam Birla: Business leaders can't be made scapegoats, says India Inc)

After a government committee had rejected Hindalco's application for the coal block in question, the decision had been reversed after Mr Birla reportedly met Mr Parakh and then Prime Minister Manmohan Singh. Mr Parakh had said that Mr Birla successfully argued his case that he was the first applicant and hence equally eligible and competent. (Coal scam: former Coal secretary Parakh reversed decision to favour Birla, says CBI)

Hindalco had denied any wrongdoing and PM Singh, who was in charge of the coal ministry when the allocation took place in 2005, defended the decision to award the block to Hindalco.

Mr Parakh had said that no "undue favour" had been shown as alleged by the CBI and said that, "Normally competent authority in respect to any government department is the minister in-charge and at that point of it was the Prime Minister." (Read: Coal scam probe: PM is the "competent authority" mentioned by CBI, says former Coal Secretary PC Parakh)

The Supreme Court ruled on Monday that the allocation of more than 200 coal blocks by different governments since 1993 was illegal. The top court will decide on Monday whether to cancel the coal licenses, or to impose some sort of penalty.

How coal blocks were awarded to steel, cement and power companies turned into a national scandal in 2012  with the Comptroller and Auditor General (CAG) report saying the underpriced sales had cost the exchequer up to $33 billion or 1.86 lakh crores.

Experts say any mass cancellation of the coal blocks will add to a shortage of coal for power plants. More than two-thirds of India's electricity is generated by the fuel.
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