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Potential coal mining scam in MP, Chhattisgarh?

Mar 22, 2012 11:35 AM IST India India

New Delhi: A CAG report in national daily 'The Times of India' says the government lost Rs 10.67 lakh crore by not auctioning coal blocks between 2004 and 2009. CNN-IBN had reported on a potential coal scam about six months ago. CNN-IBN had traveled to Chhattisgarh and Madhya Pradesh.

Despite a CBI inquiry, there was no action by either the central or state government on a politically-connected company who allegedly used forged documents to get the mines.

For the Reddy brother's in Karnataka, the modus operandi was extracting more than stipulated iron ore from the mines in Bellary and selling them off in the black market.

A similar scam has been unfolding in the coal mines in Chhattisgarh and Madhya Pradesh.

The company in question Prakash Industries is owned by Ved Prakash Agarwal. He is the brother of Jai Prakash Agarwal, who runs a BJP-backed NGO Surya Foundation.

An investigation by the CBI shows that Prakash Industries, a heavyweight in the mining and steel sector, was allotted coal blocks in Chhattisgarh and Madhya Pradesh in connivance with officials from Coal and Steel ministries after submitting forged and fabricated documents.

In north Chhattisgarh's Korba district Prakash Industries limited emptied out the entire Chotia coal block ostensibly for expanding their sponge iron plant. The CBI investigation shows that the expansion never happened and that the company diverted nearly 50 per cent of the entire coal mined to the black market making thousands of crores.

The allegation is that Raman Singh's government in Chhattisgarh had been helping Prakash Industries to bid for more coal blocks. However, Raman Singh brushed aside such allegations.

The excise department inquiry shows that the company suppressed their production figures and clandestinely removed coal into the black market. They pointed at connivance between officials of coal and steel ministry and Joint Plant Committee. They levied a fine of more than Rs 90 crore. The central excise and customs department had even recommended criminal action against the company and their political connection ensured that no action was taken either by the UPA at the centre or state governments in Chattisgarh and Madhya Pradesh.

Yet the Rs 1,526-crore company, which in 2010 was earmarked by ArcellorMittal for buyout, has been blatantly siphoning off a scarce natural resource and making millions from it.