From Kumar Birla to SBI chairman: How India Inc reacted to SC verdict on coal blocks

The Supreme Court on Wednesday scrapped all but four of 218 coal blocks allocated by the government over the past two decades, in a tougher-than-expected ruling that sank shares of companies that have invested heavily in projects around the concessions.

Most power, steel and cement companies that won blocks will have until end-March to return them, and the government then plans to auction them off. The previous practice of selective allocation was ruled illegal and arbitrary by the court.

Here are some of the reactions to the SC verdict:

Aditya Birla Group chairman KumarMangalam Birla: The Union Government should ensurethat the massive investments made by the companies to acquirecoal blocks do not go down the drain following Supreme Court’sorder cancelling the mine permits.The government should have an alternative (plan) as a lothas been invested…. Hope to learn about the government’saction plan in the near future," Birla said on the sidelinesof the company’s 55th annual general meeting (AGM) held here.

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Assocham: Terming the Supreme Court’s ruling cancelling 214 coal blocks as “a bit harsh”, industrybody Assocham today said it will lead to higher imports. “Our main concern is on the kind of negative impact onthe economy which has just been showing signs of recoveryafter over two years of slowdown,” Assocham President RanaKapoor said reacting on the ruling of the apex court.

**State Bank of India chairman, Arundhati Bhattacharya:**The bank looks forward to a “swift and transparent” bidding process of the coal blocks cancelled by the Supreme Court earlier in the day.We believe that uncertainty is possibly the worst enemy of growth. We are glad that this is over with the SC verdict on coal blocks allocation.

Former Coal Minister SriprakashJaiswal: The Supreme Court has accepted the previousUPA government’s suggestion of cancellation of coal blockswhich were allocated since 1993.

Former Coal Secretary PC Parakh: The government should give the first right of refusal in the ensuing coal mine auction to thecompanies which lost the blocks in the mass cancellation by the Supreme Court today.

Parakh also said that the economy will be severely impacted if the government fails to re-allocate the cancelled blocks within six months.

He questioned as to why no investigation was carried out against those who prevented implementation of a transparent allocation system.

“The Supreme Court has cancelled all the blocks except four. I believe that the blocks cancelled will be re-allocatedand if present holders are given the first right of refusalthen there would not be much dislocation of work. If there isa wholesale change and new people come, it would have a verysevere impact,” the former Coal Secretary said.

Basant Lal Shaw, Chairman, Jayaswal Neco Industries: From 1993 onwards whoever have mined, they have to deposit Rs 295/tonne, the money within three months as if the money is deposited in RBI. We have produced material, sold it out to consumers and now from where will the money come? If the coal prices are increased, it will create major inflation in all industries that are consuming coal.

We will definitely go for review. It is a complete disaster. People should not believe on government. When another government will come they will again change it, like Vodafone 10 years back income tax you pay income tax.

GD Mundhra, director, Sarda Energy and Minerals: We have so far mined about 3.6 million tonne of coal. It will be roughly about Rs 100-105 crore. We are continuously using for captive use and we will have to go for bidding process. We are waiting for detailed guidelines, once it comes, we will have to respond to those situations.

Anil Singhvi, Managing Director, Ican Investment Advisors: The SC relies upon the preparedness of the government and allowed six months period. So it is the least disruptive. I don’t think ever a power plant or for that matter any steel plant would have any problem of availability of coal based on this judgement.

Rakesh Arora, HOR - India, Macquarie Capital Securities: The writing was on the wall after the Supreme Court (SC) termed them illegal. It was expected that this is going to happen. All eyes will be on government, how fast they can act and reauction these coal blocks because there are lot of issues which need to be tackled. If the government can really come out fast on this, then the confidence can be restored again. Otherwise it is a huge dent into the industry confidence.