Captains of the industry on Thursday hit back at the government for dragging in Hindcalco, the world’s largest aluminium rolling company, into the coalgate scam, terming it as a “ridiculous” decision which would have a negative impact on the already floundering economy.
The industry’s reaction came in the backdrop of the CBI naming the company’s chairman Kumar Mangalam Birla in a first information report (FIR) over the allocation of two coal blocks in Odisha way back in 2005.
“Just because some coal block which was reserved for the public sector is partially allocated to the private sector, it cannot be termed wrong. So I think it’s (the FIR) a bit ridiculous; it’ll spoil sentiment, perception and several things…,” TV channels quoted the chairman of Godrej Group Adi Godej as saying.
Former Infosys chairman Mohandas Pai too spoke out against the FIR. “If there is strong evidence against the individual of wrongdoing…, then they are right because rule of law must prevail in this country. But if the evidence is just a meeting and a conspiracy is attached to that then I think it raises doubts,” he said.
Others who had come out in defence of Hindalco include HDFC Bank chairman Deepak Parekh and country head of HSBC India Naina Lal Kidwai, besides industry bodies like Assocham and PHD Chamber of Commerce.
Significantly, Union corporate affairs minister Sachin Pilot too had expressed doubts over the FIR saying, “We must ensure that such actions are based on hard facts and do not create an atmosphere of fear and uncertainty.”
Former coal secretary PC Parakh gave a new twist to the scam by claiming that Prime Minister Manmohan Singh, who held the coal portfolio at that time, knew of the coal blocks being allocated to companies like Hindalco and he too should be named as a “conspirator” and made an “accused” in the case. The Opposition BJP has demanded the Prime Minister’s resignation following allegation by Parakh.
Coal minister Sri Prakash Jaiswal, however, defended Singh on Thursday saying that that the Prime Minister does not need a certificate of honesty from anyone.
Jaiswal cautioned that everyone should refrain from issuing such statements which could weaken the economy of the country or prevent bureaucracy from working.
“Everyone should take precaution that no such statements are issued which could impact market sentiments, weaken the economy or could prevent bureaucrats from working,” he said, without referring to any specific person or party.
Jaiswal refused to comment further on coal block allocation controversy saying that “any comment on it by me would not be proper as CBI is probing the matter and the Supreme Court is also reviewing it”.
He reiterated that the auction process for allocating coal blocks in a transparent manner was likely to begin in two months span.
Minister of state in the prime minister’s office V Narayanasamy also said that the government had nothing to hide, and decisions on coal block allocations were taken on the basis of recommendations of state governments.
Narayanasamy told reporters that it has been the stand of the government that allocations have been made to public sector undertakings and some private companies “on the recommendations of state governments where coal blocks were available”.
“We have nothing to hide,” he said.
The scam broke after the national auditor Comptroller and Auditor General (CAG) in a report last year suggested that the arbitrary allocation of coalfields may have robbed the exchequer of potential revenues of Rs. 1.86 lakh crore between 2004 and 2009.
Manmohan Singh had even delivered a televised defence after the CAG report was tabled. Such has been the storm over the issue that in August this year, the Prime Minister lost his cool in Parliament after opposition MPs – who had continuously disrupted Parliament over missing coal ministry files – questioned his integrity.
The CBI is probing allegations of irregularities in coal block allocations to power and steel companies since 1993 in a Supreme Court-monitored investigation.