Police lay first formal charges in India's 'Coalgate'

NEW DELHI (AFP) - India's federal police agency filed its first formal charges Monday over alleged wrongdoing in the awarding of coal blocks that the national government auditor says cost the treasury billions of dollars.

The laying of charges in what the Indian media has dubbed "Coalgate" comes less than a week after the ruling Congress party - buffeted by a string of graft accusations - announced national elections.

A spokesman for the Central Bureau of Investigation (CBI) told AFP the police agency had filed charges against a Navabharat Power Private Ltd, based in south India, and two of its directors. "A case was registered against Navabharat Power Private Ltd," the CBI official said.

A CBI statement on the police agency's website said the charges involved conspiracy and cheating.

The CBI launched its investigations after the government auditor in 2012 accused the coal ministry of underpricing coalfields in allocating them to companies and giving away billions of dollars of public money in the process.

An "investigation is continuing" into the role of public servants "if any" in the case amid allegations they failed to properly scrutinise the coal allocations, the CBI added in the statement.

The CBI has initiated close to 20 preliminary investigations against companies and leading industrialists in connection with the coal allocations but Monday's charges were the first formal ones to be laid.

Other companies named in the CBI's preliminary investigations include Indian industrial heavyweights such as Jindal Steel and Power and Hindalco.

All those named by the CBI in its First Information Reports or FIRs - a prelude to a police investigation - have strongly denied any wrongdoing.

Some of the coal mine recipients are alleged to have swiftly sold the allotments for massive profit while others held on them as a resource to be developed.

The opposition has alleged kickbacks for the allotments - made without any transparent, competitive bidding process - went to the ruling Congress party.

The opposition has repeatedly demanded the resignation of Prime Minister Manmohan Singh, who besides being premier, headed the coal ministry when many coal allocations were made. Dr Singh has strongly denied opposition accusations of misdeeds.

More charges in connection with the probe are expected to be filed before the end of the month.

Opposition parties have charged that a flawed and murky government allotment process allowed well-connected businessmen and companies to win rights to undeveloped coalfields for a fraction of their value.

"Coalgate" is just one of various corruption scandals to engulf Singh's government over the past few years.

The scandals have cast a dark shadow over the government's popularity in the elections that the Hindu nationalist opposition Bharatiya Janata Party is tipped to win. The poll results are due in mid-May.

Energy-hungry India depends on coal for nearly 60 per cent of its fuel. The scandal has slowed allocation of mines to fuel its coal-fired power plants.

India has vast coal reserves but difficulties in getting environmental clearances and obtaining land for mining have made the country one of the world's biggest coal importers.

Comments