Coalgate: CBI files FIR against JSPL group firms, stock plunges

The CBI has filed an FIR against two firms that are part of the Jindal Group and began searches at around 19 locations as part of its probe into allegations of corruption in the allocation of coal blocks. CNN-IBN reported meanwhile that raids were underway  in about 19 places locations like Delhi, Hyderabad and Kolkata which includes Jindal group firms as well as Jindal's home in Delhi.

In a statement, JSPL group said that this is an ongoing probe into the coal scam, and that they will fully co-operate with the CBI.

According to a CNN-IBN report, the twelfth FIR has been filed by the CBI in connection with the coal block allocation case and names the Jindal Group's Iron and Sponge Limited, Gagan Sponge and two other companies.

The FIR also reportedly named former minister of state for coal Dasari Narayan Rao and other members of the screening committee that decided on coal block allocations.

Jindal Steel and Power Limited stocks fell by 18 percent on the news of the CBI action.  Jindal Saw was down 15 percent leading to a 200 point fall in the Sensex. At 11:09 pm, the Sensex was down 201 points at 19238.29, while the NSE Nifty was down 61 points at 5836.

Jindal group firms got 11 coal mines allocated to them. AFP

Jindal group firms got 11 coal mines allocated to them. AFP

On 7 June, the coal ministry had issued show cause notices to 11 coal firms, including Jindal Steel and Power, Monnet Ispat, NTPC and GVK Power for not developing the mines allotted to them and sought an explanation for delays in production, failing which mines would be de-allocated.

The maximum number of notices were issued to the Jindal group led by Congress MP Naveen Jindal, which was allocated a total of 11 blocks.

The notices were issued for 10 coal blocks which includes Utkal-B1, Pakri Barwadih, Urtan North and Mandla North coal block.

The crackdown is part of the government’s exercise to ensure that the allocated blocks do not remain unproductive for long. The Government has already de-allocated coal blocks in 22 cases and bank guarantees have been forfeited in case of another 36 entities.

Last year government auditor CAG, in a report, had estimated likely financial gains to the tune of Rs 1.86 lakh crore to accrue to private coal block allocattees without auction.

Updated Date: Jun 11, 2013 15:03 PM

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