Coalgate: Is bruised investor sentiment the main casualty of CBI enquiry?

Even after ex-Coal Secretary PC Parakh said that absolute fairness was maintained in allocating coal blocks to private companies like Hindalco, questions remain over why the CBI did not name Manmohan Singh, the Coal Minister at the time, and presumably the ‘competent authority’ mentioned in the 14th FIR filed by CBI.

RK Raghavan, ex-CBI chief, however felt that it was too premature to name the PM in this FIR and naming Birla and Parakh was only a technical requirement.

In a panel discussion ‘The Buck Stops Here’ aired on NDTV, he said, “This is the situation after preliminary enquiry when the FIR is being drawn. Absence of the PM’s name at this stage does not seem strange. At a later stage, they will go through papers in the Prime Minister’s office.”

According to him, Manmohan Singh was not named as the principal conspirator as he was not directly in touch with the beneficiaries of coal block allocations. “FIR is a technical requirement since the principle beneficiary was Kumar Mangalam Birla. And PC Parakh was named because as the coal secretary he was directly in touch with the beneficiaries,” he said.

Why did Naveen Patnaik write to PM favouring Hindalco?

The CBI is reportedly about to question Naveen Patnaik regarding a letter that he had written to the PM where he had specifically named Hindalco as a favoured group for coal block allocation.

However, BJD leader Jay Panda said that Naveen Patnaik’s letter was part of the official policy of encouraging investors who would invest not just in mining, but also in downstream industries.

He said, “Odisha govt has an official policy of favouring industries who would value add - and that is where Hindalco would fit in.” However, Naveen Patnaik had also written in the same letter to the PM that they should also examine Hindalco’s application for coal blocks carefully before allocation, he added.

Is Indian industry getting hurt?

Meera Sanyal, ex-CEO of Royal Scotland Bank, said, “Foreign investors are not touching India. Forget foreign investors, why would Indian investors touch India?” Already the government has done things like retrospective amendments for Vodafone that has badly affected investor sentiment, she added.

Pointing to Naveen Patnaik’s proactive stance on Hindalco, she said, “I wish more politicians would go out and canvas for industry. People are being trashed for encouraging industry. This finger-pointing must stop.”

She also said, “The real problem is that we don’t have a transparent mechanism for allocating natural resources. Coal is a national tragedy. We have coal reserves for two hundred years and yet we are importing coal.”