NEW DELHI: Indian federal police yesterday staged new raids over alleged corruption in government coal mine allocations and filed preliminary charges against a ruling Congress party lawmaker who is also a powerful businessman.
The developments in what media has dubbed “Coalgate” are a fresh blow to the Congress government, which has been hit by repeated graft scandals and must face voters in elections next year.
Preliminary criminal cases have been filed against Congress MP Naveen Jindal and former junior coal minister Dasari Narayan Rao along with various companies, a Central Bureau of Investigation (CBI) spokeswoman said. She said details of the cases would be made available later.
Shares of Jindal Steel chaired by the MP slid by more than 24 percent after the news broke, then retraced slightly to trade down more than 17 percent at 220.75 rupees in the early afternoon.
The CBI has been probing allegations by the national auditor last year that the government, when granting coal mining rights, may have given away billions of dollars in windfall gains to 100 private and some state-run firms in exchange for kickbacks.
Leading Indian news channel NDTV quoted police sources as saying Jindal, who is chairman of Jindal Steel and Power, is accused of criminal misconduct, conspiracy and cheating.
Jindal’s company, which was allotted five coal blocks, faces separate charges of cheating and conspiracy, the channel said.
The Times of India website, also quoting police sources, said the case against Jindal alleges his company misrepresented key information to obtain valuable coalfields and that kickbacks were paid to government figures.
Jindal could not be immediately reached for comment but has in the past denied any allegations of wrongdoing.
Jindal Steel and Power spokesman Manu Kapoor said the company was law-abiding and “committed to fully cooperate” with the CBI.
The CBI, which has already filed some dozen cases in connection with the scandal, was carrying out searches in New Delhi and the southern city of Hyderabad in connection with the coal allocations, the spokeswoman added.
The Supreme Court in April rebuked the nominally independent agency for showing the government a report on its investigation into alleged corruption in the coal mine allotments.
Last month, law minister Ashwani Kumar quit after the court was told the government had altered the preliminary report on the CBI inquiry into the allotments.
The case has brought opposition calls for Prime Minister Manmohan Singh to resign and is one of a string of political embarrassments for his government.
There was no immediate comment from Rao.
Singh, in addition to being prime minister, was coal minister for some of the period under police scrutiny.
Other companies named in Tuesday’s charges include Jindal Realty and former minister Rao’s firm Saubhagya Media, the Press Trust of India reported.
There was no immediate comment from Rao.
