CBI on coal scam: probe still on, PM's Office under the scanner

New Delhi: The Prime Minister's Office was drawn into fresh controversy after the CBI on Tuesday filed an FIR accusing top industrialist Kumar Mangalam Birla, chairman of the 40-billion-dollar (Rs. 2,50,000 crore) Aditya Birla Group, and the government's former coal secretary PC Parakh of conspiracy in the coal allotments.

The CBI's first information report, accessed by NDTV, refers to a "competent authority" who cleared all decisions. This seems to be a reference to Prime Minister Manmohan Singh who held the coal portfolio at that time.

The first reference is to "the competent authority" approving a screening committee's recommendation to reject Aditya Birla Group company Hindalco's application for a coal block in favour of a Public Sector Unit. The second reference is when the "competent authority" approved the coal secretary's decision to  ignore the deliberations of the screening committee and allot Hindalco a coal block in Odisha in 2005. (Read: What the CBI says in its FIR)

The CBI has declined to comment or elaborate on this any further, but sources did say that the PM's Office did not have a clean chit yet. Sources in the PM's Office, however, said the Prime Minister has nothing to hide and that the matter is sub-judice.

CBI sources today said they are also investigating whether a letter Odisha Chief Minister Naveen Patnaik wrote to the Prime Minister in August 2005 influenced the decision to allot aluminium-maker Hindalco a coal block.

Mr Patnaik has clarified, "The letter written to the central government was to examine the request of Hindalco. I want to clarify that the powers of allocating coal blocks lie with the central government. No information has been received from the CBI for questioning or otherwise." (Read: Statement from Naveen Patnaik's office on letter to PM for coal blocks)

The CBI has alleged that "undue favour" was shown to Hindalco. In its FIR, the agency has said Hindalco's application was first rejected, but after Mr Birla met Mr Parakh in July 2005, the coal secretary allotted Hindalco the coal block.The investigating agency claims it has "enough documentary evidence against Mr Parakh" and says it will prove its case in court.

A statement from Hindalco on Tuesday said, "We wish to state unambiguously that we have followed every process required for allocation of coal completely, as stipulated by the Government policy."

Mr Parakh, while denying any wrongdoing, has said it was "the Prime Minister, who as the coal minister, took the final decision" on allotments and has demanded to know why Dr Manmohan Singh had not been named in the FIR. (Read: Name the PM too, says former coal secretary) The charge against Mr Parakh has created a storm since he was the official who fought for transparency and a bidding process in coal block allocations.