Ruling party MP named as India 'coalgate' scandal widens

Published: September 5, 2012

It is the latest in a series of corruption scandals to have plagued Singh's second term in office, . PHOTO: AFP/FILE

NEW DEHLI:  Federal law enforcement officials have named an MP from India’s ruling Congress party Inan investigation into irregularities in the award of coalfield concessions, piling more pressure on the government firefighting the latest in a series of scandals.

The news emerged on the same day as officials raided the offices and homes of five companies, also in connection with the scandal that has sparked a political crisis at a time when the government is struggling to revive India’s slowing economy.

The Central Bureau of Investigation (CBI) has filed a case against Vijay Darda, a lawmaker in India’s upper house, a CBI official told Reuters on Tuesday.

The official declined to comment on media reports that Darda was linked to companies being investigated. Darda has denied any wrongdoing.

The agency has filed cases against five companies and charged a number of officials with criminal conspiracy, cheating and intention to commit a crime, CBI officials said.

No arrests have yet been made, although documents have been seized in raid sin 11 cities across the country.

“During the course of the investigation, if we will find any kind of irregular activities or illegal activities from any person, we will arrest him or her,” a CBI official said.

The five companies, which are not listed on stock exchanges, are small-time players in the main coal-producing states of eastern India.

They are Vini Iron & Steel, JLD Yavatmal Energy ,Jas Infrastructure and AMR Iron & Steel and Navabharat Power Ltd., the CBI officials said.

The cases have been registered in connection with allegations that the companies connived with government officials to submit false claims while applying for coalfield concessions, the CBI said.

Jas Infrastructure confirmed there had been a raid on its corporate office. An employee at the office of Vini Iron & Steel, in the eastern state of Jharkhand, said the office had been closed.

“The management didn’t allow employees to enter inside. The office is shut,” the employee said by phone.

There was no confirmation from other companies. The raids come at a critical time for Prime Minister Manmohan Singh’s government, which has been on the defensive since the state auditor last month questioned the lack of transparency in the allocation of scores of coalfields.

The main opposition Bharatiya Janata Party (BJP) seized on the report to paint the government as corrupt and has all but paralyzed   parliament with its demands for Singh to quit over the affair, which the Indian media has dubbed “Coalgate”.

It is the latest in a series of corruption scandals to have plagued Singh’s second term in office, weakening his government at a time when it has struggled to pass landmark economic reforms such as liberalizing India’s retail sector.

Tensions between the country’s two biggest political parties over “Coalgate” spilled onto the streets on Tuesday as hundreds of Congress party workers clashed with baton-wielding police in the BJP-ruled state of Chhattisgarh state.

The CBI launched an inquiry into allegations of irregularities in the allocation process before the auditor released his report on August 17, but the raids helped widen the furore  beyond  parliament, where it has been playing out for weeks.

The report questioned the lack of competitive bidding for coalfields potentially worth billions of dollars but did not accuse Singh or other officials of corruption.

Singh has denied any wrongdoing in the allocation of 142 coalfields by a government panel between 2004 and 2009.

Indian media have reported that some of the companies that won concessions misrepresented their ability to mine the coal or were linked to political parties.

Reader Comments (1)

  • Indian
    Sep 5, 2012 - 6:52PM

    This Coalgate contrary to the other Coalgate is going to leave all of Congress’s teeth jet black…….

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