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Shares in aluminium maker Hindalco fell 8 per cent on Wednesday after a Delhi court summoned the company’s chairman Kumar Mangalam Birla as an accused in a case linked to the coal scam that saw mining rights being assigned without any transparency to private firms.

The case pertains to allocation of Talabira-II coal block in Odisha in 2005. Hindalco, which is part of the $45 billion Aditya Birla Group, had first been refused the coal field it sought, but the decision was later reversed. The company has denied any wrongdoing.

The special court has also summoned former Prime Minister Manmohan Singh, former coal secretary PC Parakh, M/s Hindalco, its officials Shubhendu Amitabh and D Bhattacharya as accused in the case. They have been asked to appear before the court on April 8.

Hindalco Chairman Kumar Mangalam Birla was on Wednesday summoned as an accused in a case linked to the coal scam that saw mining rights being assigned without any transparency to private firms. Mr Birla has been asked to be present in the court on April 8 along with five other accused.

Here’s Hindalco’s statement on the development:

In the context of the Trial Court’s order with regard to the allocation of Talabira-II and III coal block, passed today, Hindalco reiterates that none of its officials, including its Chairman Kumar Mangalam Birla, have pursued any unlawful or inappropriate means for securing the allocation of the coal block. The Company had represented its case to the concerned authorities in a transparent and lawful manner, following which it was allocated a 15% share in the combined Talabira-II and III coal block in November 2005, in a JV with Mahanadi Coalfields Limited and Neyveli Lignite Corporation, both public sector undertakings with an 85% stake. The coal block has since been deallocated in 2014.

Aditya Aluminium Project, for which this allocation was made, has been implemented by the Company at an investment of over Rs 13,000 crore in Odisha. The plant is already operational even though Talabira-II & III coal block could not become operational for want of clearances. Consequently, Hindalco is having to suffer irrecoverable financial stress.

Hindalco will study the order of the Trial Court in detail and would defend its case through the legal process. It has cooperated with the investigating authorities completely during the course of investigation since October 2013. The company’s management is confident that it will stand vindicated at the end of the ongoing legal process.

The charges include criminal conspiracy, corruption and breach of trust. Dr Singh was reportedly questioned by the CBI in January; he was asked about the Talabira coal block that was allotted to Hindalco in 2005. At the time, Dr Singh held direct charge of the Coal Ministry.

Hindalco was the top Nifty loser as of 2.10 p.m., down 7.5 per cent at Rs. 127.75. The stock underperformed the broader Sensex, which traded with a positive bias.

The special court directed all the six accused to appear before it on April 8.

A Delhi court on Wednesday summoned former Prime Minister Manmohan Singh, former Coal Secretary P.C. Parakh and industrialist Kumar Mangalam Birla and others as accused in a coal block allocation scam case.

Rejecting the CBI’s plea for closing the case, Special Judge Bharat Prasahar asked all the accused persons to appear on April 8, the next date of hearing.

The CBI had earlier sought closure of the case. However, when the Special Judge pulled it up for filing a patchy probe report, it filed a revised one and took a U-turn, stating that “there is prima facie enough material on record” to prosecute Mr. Parakh and Mr. Birla.

The case pertains to the allocation of coal blocks to Hindalco, owned by the Aditya Birla Group, allegedly in violation of rules.

The CBI last year lodged an FIR against Mr. Parakh, Mr. Birla and others, alleging that Mr. Parakh had reversed his earlier decision not to allocate coal blocks to Hindalco and shown undue favour to it.

The former Prime Minister Manmohan Singh told reporters at Parliament house “I am sure that the truth will prevail and I will get a chance to put forward my case with all the facts. I have always said I am open for legal scrutiny. Of course I am upset, but this is part of life.”

CBI records statement of Manmohan

Earlier, on January 20, 2015, the CBI has recorded the statement of former Prime Minister Manmohan Singh in connection with alleged irregularities in the allocation of an Odisha coal block to industrialist Kumar Mangalam Birla’s company Hindalco.

DR. SINGH AND THE COAL TRAIL

    • › March 2012 CAG’s draft report accuses govt of ‘inefficient’ allocation of coal blocks in 2004-2009; estimates windfall gains to allottees at Rs 10.7 lakh crore.
    • › May 29, 2012 Prime Minister Manmohan Singh offers to give up his public life if found guilty in the scam. Two days later, CVC directs a CBI enquiry
    • › November 25, 2014 CBI informs a special court that it was not permitted to question former Prime Minister Manmohan Singh. The investigating agency also said it wasn’t necessary.
    • › December 17, 2014 Special court ordered the CBI to examine former Prime Minister Manmohan Singh.
    • › January 20, 2015 CBI records the statement of former Prime Minister Manmohan Singh.
    • › March 11, 2015 Special court summons former Prime Minister Manmohan Singh, Kumar Mangalam Birla and P.C. Parakh as accused.

Although CBI officials confirmed that Mr. Singh’s statement had been recorded, they remained tight-lipped over when exactly the agency approached him.The former Prime Minister’s statement has been recorded following a direction by the Special CBI Court last month. Observing that a concerted effort was being made to manipulate the entire government machinery so as to protect the interest of Hindalco, the Court had directed the agency to examine the then Coal Minister (Mr. Singh) on various aspects of the coal block allocation to the company.

The CBI had sought closure of the case, in which Mr. Birla, former Coal Secretary P.C. Parakh and others were named as accused. However, the court directed the agency to carry out further investigations in the case and submit a progress report on January 27, stating that before examining the matter further, it was appropriate that the then Coal Minister was first examined.

The CBI had in October 2013 registered the case alleging that Mr. Birla and Mr. Parakh, along with other accused persons, entered into a criminal conspiracy to facilitate partial allocation of the Talabira coal block to Hindalco in 2005.The move prompted the PMO to issue a detailed statement in Dr. Singh’s defence. The PMO said Dr. Singh was “satisfied” that the final decision was “entirely appropriate” and based “on the merits of the case placed before him”, and that he had formally endorsed the Coal Ministry’s decision to overturn the 25th screening committee’s recommendation to accommodate Kumar Mangalam Birla’s company for the allocation of the coal block in question.

The Hindu had last July reported that the CBI was then planning to seek clarifications from the former Prime Minister as a witness in the coal block allocations scam. Dr. Singh held the charge of the Coal Ministry for almost five years from the time the United Progressive Alliance came to power in 2004. Several coal block allocations made during the period are under CBI scrutiny.


The former Coal Secretary released his book “Crusader or Conspirator? Coalgate and other Truths” in New Delhi on Monday.

Former Coal Secretary P.C. Parakh on Monday said the coal scam could have been avoided had Prime Minister Manmohan Singh pushed for reforms, including e-marketing and open auction of coal blocks, as recommended by him.

“Had the Prime Minister used his authority behind the reforms proposal, it [coal scam] could have been avoided,” said Mr. Parakh after the release of his bookCrusader or Conspirator? Coalgate and other Truths.

He added that former Coal Ministers Shibu Soren and Dasari Narayana Rao, besides many parliamentarians and industrialists, had objected to the reforms.

Mr. Parakh, against whom the CBI has registered a case in connection with the allocation of an Odisha coal block to Hindalco, virtually gave a clean-chit to the PM saying whatever positive work he could do as Coal Secretary was when the Ministry was under Dr. Singh.

“The Prime Minister gave me full support. He also supported reforms in the Coal Ministry. We were able to get a lot of work done because of his proactive role,” he said.

Defending his role in the allocation of the Talabira-II coal block to Hindalco, Mr. Parakh questioned the CBI decision to register a case against him.

“I am not saying there was a conspiracy, but if the CBI thought there was a conspiracy, then a conspiracy has to be between people who take decisions. So you had the Prime Minister who had finally taken the decision. If I am part of the conspiracy, he [the PM] has to be a part of the conspiracy,” said the 68-year-old former IAS officer.

Asked about the timing of the book launch, which was released by retired Supreme Court Justice G.S. Singhvi and former Cabinet Secretary T.S.R. Subramanian, Mr. Parakh said he had been working on it for several years.

“My book is essentially about the degradation in our political system. I show in this book how we initiate our public servants into corruption. How we had Chief Ministers and Chief Secretaries in the past, who taught us to work with honesty and dedication. We have reached a situation where Chief Secretaries, instead of being honest advisers to the government, have become supine and totally flexible servants to their political masters,” he said.

The Prime Minister’s Office on Monday said the matter relating to exploitation of coal reserves was under judicial scrutiny and the UPA government had nothing to hide in the matter.

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