The Central Bureau of Investigation (CBI) has registered a case against Electrosteel Castings Limited and associate company Electrosteel Steel for alleged criminal conspiracy and cheating in acquiring a coal block mine in Jharkhand.
The case pertains to the Parbatpur block in Bokaro, Jharkhand, which was allocated to Kolkata-based Electrosteel Castings for its pig iron facilities in Kolkata and Andhra Pradesh. Electrosteel Steel has an integrated steel plant at Siyaljori village in Bokaro district. Electrosteel Castings is the owner and also the largest shareholder, with about 50 per cent equity holding, in Electrosteel Steel.
CBI has registered a case against these two companies under Section 120-B r/w 406 and 420 of the indian penal code and under Sections 13 (2) and 13 (1) (d) of the Prevention of Corruption Act, a spokesperson said. The agency has conducted searches at five locations including Bokaro, Ranchi and Kolkata.
At the time of going to press, there was no response from Electrosteel Castings to an e-mail query from Business Standard.
According to sources, it is alleged that Electrosteel Castings acquired 48.5 per cent shares of another Andhra Pradesh-based private company and “allocation was made for a plant of the Andhra Pradesh-based company whereas the Andhra Pradesh-based private company never independently applied for a coal block”.
According to CBI, Electrosteel Castings resorted to sell 50,162 tonnes of middlings (by-product of coal washing) “dishonestly” to Electrosteel Steel and the “company disposed 42,500 tonnes of inferior ungraded coal, jhama and slurry to the non-approved end users”.
This was among the 42 coal mines that had begun production when the Supreme Court had cancelled all but four coal block allocations made to private companies over the past two decades.