CBI got its facts all wrong in coal FIR against Birla

Aman Sharma
The Economic Times
01 September 2014

Agency's closure report says 'info from a source' was basis for a preliminary enquiry

New Delhi: The Central Bureau of Investigation (CBI) got its facts all wrong in the controversial FIR lodged by it last year against Aditya Birla Group chairman Kumar Mangalam Birla and former coal secretary PC Parakh.

A close reading of CBI's closure report in the high-profile case, which was exclusively accessed by ET, shows all the major allegations in the FIR turned out to be based on incorrect premises or a misreading of the facts.

These errors are despite the fact that CBI conducted a preliminary enquiry (PE) before lodging the FIR. "Information received from a source" was basis for the PE, the closure report says.

CBI ignored Odisha CM's letter
The main allegation in the FIR was Parakh overturned the recommendation of the 25th Standing Committee and accommodated Hindalco in allocation of Talibara II and III coal blocks without any valid basis or change in circumstances.

A government undertaking, Neyveli Lignite Corporation (NCL) was earlier allotted these blocks. The closure report stresses that this happened because of the intervention of Odisha chief minister Naveen Patnaik who wrote to the Prime Minister pitching for Hindalco's case.

Odisha had taken the same stand before the 25th Standing Committee. Patnaik told the PM that he supported the aluminium project of Hindalco over NLC's power project.

CBI misread Birla-Parakh meeting
The FIR said Birla met Parakh after the 25th Standing Committee denied Hindalco the coal mine and pursuant to this "personal" meeting, Parakh "abused" his official position to accommodate Hindalco.

The closure report says Birla pursued the matter with Parakh without taking any recourse to secrecy. The report mentions that Birla had even met the then Prime Minister Manmohan Singh for the same cause after writing two letters to him.

CBI assumed Hindalco didn't need linkages
The CBI FIR cited proceedings of the 25th Standing Committee meeting to say that a 650-MW Aditya Aluminium power project of Hindalco had been provided long-term coal linkage of 3.06 MTPA (million tonnes per annum) from Mahanadi Coalfields (MCL) and therefore no separate coal block needed to be given to Hindalco.

The closure report says though a coal linkage was granted to Hindalco in 2002, no fuel supply agreement was signed between Hindalco and MCL to operationalise these coal linkages. The coal linkages were cancelled in 2009. Hindalco commissioned its 650-MW project in 2013.

CBI wrongly termed NLC a loser in allocation
The FIR said after Hindalco got access to these coal blocks along with NLC and MCL, the satisfaction level of Hindalco turned out to be 81% against 29% for NLC. And hence, a 2000-MW power project of NLC, which was approved by ministry of power and was to be set up in IB Valley in Odisha, could not take off as planned. The closure report says the NLC's power project did not collapse due to Hindalco, but because no MoU had been signed between NLC and the Odisha government for the project. In 2011, NLC decided to d;rop the project on account of delay in getting the MoU signed and non-allotment of land.

Coal still in mother earth
The closure report makes another point which UPA had also made to cite no losses in the so-called coal scam. "The mining activity at Talibara II and III blocks is yet to commence since the Stage-1 Forest and Environment Clearance is still slated to be awaited from the ministry of environment and forests," the CBI has now said.