'Rao helped Jindal firms twice to get coal blocks'

Former union minister of state for coal Dasari Narayan Rao helped Congress MP Naveen Jindal's two firms twice to bag Jharkhand's Amarkonda Murgadangal coal block, CBI investigators said. Rajesh Ahuja reports.

Former union minister of state for coal Dasari Narayan Rao helped Congress MP Naveen Jindal's two firms twice to bag Jharkhand's Amarkonda Murgadangal coal block, CBI investigators said.

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In July 2007, Rao wrote a note to the then coal secretary HC Gupta to ignore the appraisal of applicant companies done by the Central Electricity Authority that comes under the power ministry.

The power ministry had not recommended applications of Jindal's two firms - Jindal Steel and Power Limited and Gagan Sponge Iron Limited – as they didn't fulfill the criteria laid by the CEA. HT had written about Rao's note on June 14.

Investigators say that was not the only instance when Rao came to the rescue of the Jindal firms. When another company Bhushan Steel gave a representation seeking 50% of the Amarkonda Murgadangal coal block, Rao justified the decision of 35th screening committee that recommended the allocation of the coal block to two Jindal firms. Finally, the two firms were allocated the coal block in January 2008.

Rao was the minister of state for coal between May 23, 2004 and April 6, 2008.

The CBI has alleged in its FIR that after allocation of the coal block, Rao's company Sowbhagya Media got investment of R2.25 crore from Jindal's other firms. The CBI is yet to question Rao and Jindal in the case.

Meanwhile, the agency had asked all the accused companies to provide relevant documents and all the companies have complied with the agency's notice in this regard, said sources.