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Manmohan to be quizzed in Hindalco case

The alleged irregularity in the coal block allocation to Hindalco took a new turn on Tuesday with a special court rejecting a closure report filed by the Central Bureau of Investigation (CBI) in the case two months ago. The court directed the agency to examine former prime minister Manmohan Singh, who held the additional portfolio of coal minister at the time of the controversial allotment. Earlier this month, CBI got a new chief, Anil Sinha, who replaced Ranjit Sinha after the latter’s term ended. CBI, under the new dispensation, has confirmed it would probe Singh as well as top officials of the Prime Minister’s Office (PMO) in the UPA regime.

“I am of the considered opinion that before the matter is examined further as to what offence, if any, stands committed or by whom the same has been committed, it will be appropriate that the then Minister of Coal (Manmohan Singh) be first examined qua various aspects of the matter and also in light of the observations made by this court in the present order,” said special judge Bharat Parashar in a 50-page order, which has questioned the role of the government machinery in allegedly protecting the interest of certain business groups, including the Birlas. The entire process “raises grave shadows of suspicion”, the order noted.

Reacting to the court direction, Congress spokesperson and Deputy Leader of Opposition the Rajya Sabha, Anand Sharma, said, “It is unfortunate. Manmohan Singh was prime minister for ten years. He is a man of great intellect and integrity. We are sure there is nothing to come out of it but we do not want to interfere with the functioning of the courts.”

CBI sources said the agency had received some pointers to further investigate the matter and would comply with the court’s directive and examine Singh, BVR Subrahmanyam, then private secretary to the PM, and TKA Nair, then principal secretary in the PMO, to find out if the framed guidelines were duly followed in the process of allocation of a coal block to Hindalco in 2005. The CBI has been asked to file a status report on January 27.

The court noted that Subrahmanyam has not been examined till now and Nair “has though been examined by way of a questionnaire but towards the end he refused to answer some of the questions expressing his inability that he was not in a frame of mind of answering further questions”. The court ordered the investigating officer to examine both these officials. While Nair has retired, Subrahmanyam is still holding the office as a joint secretary in the PMO.

Aditya Birla Group did not comment as the matter is sub-judice.

The case relates to the allocation of Talabira-II and -III coal blocks jointly to Hindalco Industries (an Aditya Birla Group company) and two other firms in Odisha’s Jharsuguda district in 2005. CBI had booked Aditya Birla group chairman Kumar Mangalam Birla (then non-executive chairman of Hindalco), P C Parakh (then coal secretary) and other Hindalco officials under various sections, including criminal conspiracy and criminal misconduct on the part of government officials. Parakh was also heading the 25th screening committee which had earlier not recommended the allocation of the coal block to Hindalco.

When the coal block was allocated to Hindalco, Singh was holding additional charge of the Union coal ministry.

Based on various documents recovered during investigation by CBI, Parashar said, “It is found that a concerted effort was being made to manipulate the entire government machinery so as to protect the interest of Hindalco.”

The court said it had no objection in any industrial house of the country meeting the Prime Minister or the secretary of a ministry “but when such meetings are seen in the over all facts and circumstances as mentioned above coupled with the follow up action which resulted at the administrative level in the government, then it certainly raises eye brows”. The judge was referring to the letters Birla had written to Singh regarding the coal block allocation to Hindalco to which Singh had reverted asking a report from the coal ministry. The court observed that the PMO had issued four letters in June-July 2005 reminding the coal ministry about Birla’s letters and various PMO officials had “pursued the matter with the coal ministry telephonically at least 6 times asking the Ministry to expedite the reply”.

After this, Parakh prepared a note in August 2005 stating two new options which could be pursued to allocate coal block to Hindalco along with stating the reasons submitted to him by Birla after both met in July 2005.

“If the overall facts and circumstances as discussed above the number of reminders which were sent by the PMO as well as repeated telephonic requests seeking an early response from the coal ministry are seen, then the entire process raises grave shadows of suspicion,” the order said.

The court produced a note written by Subrahmanyam to the coal ministry while forwarding the second letter written by Birla which stated that, “the Prime Minister desires that this matter be perused on priority so that a decision is arrived at on this long pending matter at the earliest so that the employment and revenue potential of the project is fully achieved”.

Following the two letters written by Birla to Singh, when the matter was sought to be reopened, then sections officer Premraj Kuar had shown reluctance to allocate the coal block to Hindalco, “however the said note was conveniently overlooked or not approved at the higher levels”.

In fact, minister of state for coal Dasari Narayan Rao had also “cautioned” through a note in August 2005 that “any deviation from the screening committee recommendations which were already in public domain will not be appropriate”.

Another document recovered by the sleuths stated that the government had given undue favour to Hindalco in allocating the coal block.

“It should be appreciated that the government had gone out of the way to accommodate Hindalco in Talabira II. Considering the special circumstances under which Hindalco was made a partner in the JV, the company should take a lead in ironing differences and conclude the JV,” then joint secretary in the union coal ministry K S Kropha had said in a comment after a meeting between K S Kropha, joint secretary in the coal ministry, with representatives of Hindalco related to the joint venture between Hindalco, Mahanadi Coalfields and Neyveli Lignite Corporation (NLC).

The investigators also found a series of documents from the premises of the Aditya Birla Management Corporation which chalked out the company’s strategy in getting successful in allocation of the coal block.

“The situation has now undergone a change where the officials are asserting their authority and are not willing to budge from the stated positions… A need has thus arisen to knock at each of the connected desks where the files get stuck. A situation has thus emerged where the processing of the cases is being done selectively,” stated the extracts of a recovered document titled “genesis of the problem”.

Another document stated the need to create a network with the politicians and bureaucrats to build “long lasting relationships”, “targeting young bureaucrats from future perspective” and “ensure that government policy and political efforts are aligned with overall business goals”.

The court noted that there were “certain loose ends” which needed to be “tied up” in the case. “There are certain circumstances which need to be elaborated or explained especially as regard the manner and the circumstances under which the matter was taken up in the PMO or under what circumstances the recommendations of the 25th Screening Committee were set aside even though it already stood approved,” Parashar observed.

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