Coalgate: Former CAG Vinod Rai says block to Hindalco 'justified'

In what the UPA may consider some welcome relief, former CAG Vinod Rai has said that the allotment of a coal block in Odisha to Hindalco was ‘justified’. Former CAG Rai, whose report had found irregularities in the allotment of coal blocks, told The Indian Express that the block allocated to Hindalco was not mentioned in CAG’s final report because the agency found nothing amiss in its allocation. “The CAG also had all the information and correspondence on the Hindalco case, but it did not figure in our final report. We did not put it in because we found all the justifications,” he is quoted as saying. The loss to the exchequer assessed by the CAG  in the coal allotment scam was around Rs 1.8 lakh crore**.**  Last week, the CBI registered an FIR against Hindalco, Birla group chairman Kumar Mangalam Birla and former coal secretary PC Parakh accusing them of criminal conspiracy in the case where the coal ministry had first rejected Hindalco’s application for the Talabira II coal block and had subsequently changed its mind and approved the allotment. The CAG report had in fact described Parakh as a whistleblower who had sought to bring in more transparency into the way the blocks were allocated. [caption id=“attachment_749883” align=“alignright” width=“380”] Former CAG Vinod Rai has said that the allotment of a coal block in Orissa to Hindalco was ‘justified’. PTI[/caption] Rai’s comment comes as the CBI submitted its latest status report on the coal blocks allotment probe to the Supreme Court. The CBI on Tuesday told the Supreme Court that it registered an FIR against Kumar Mangalam Birla and former coal secretary P C Parakh because the reversal of an earlier decision not to allocate the Talabira II coal block to Hindalco indicated commission of a cognizable offence warranting registration of an FIR. A Times of India report notes that the CBI statement reads like an explanation in the light of Prime Minister Manmohan Singh endorsing the decision to allocate the coal block to Birla’s company Hindalco as “appropriate” and “based on merits”. However, the former CAG believed that Parakh was not in any trouble as the PMO has issued a detailed clarification. “I do not want to comment on the actions of the CBI, but I think that the prime minister’s office has now issued a detailed clarification. Parakh is not in any trouble,” he told IE. On being asked if the FIR against Birla will hurt investors’ sentiment, Rai said that people are already aware of what is happening and they don’t have to wait for the CAG or the CBI to point it out. Therefore, he believes that the CBI action will not change the minds of investors. There have been reports that the statement issued by the Prime Minister’s Office on Friday strongly defending the decision to allocate the Talabira-II coal block to Hindalco is likely to force the investigative agency to close its case against Kumar Mangalam Birla. Now, with the former CAG also being on the same page as the PM, there may be more speculation. Read Vinod Rai’s complete interview to Indian Express here.