2014 Supreme Court order stopped Choksi from running a coal mine: Enforcement Directorate
Choksi’s Gitanjali Group held a majority stake of 51% shares in the company , while EMTA held 49%. “It was basically a third party contract to GEMTA and not direct allocation of a block to Choksi’s company,” said an ED official.Updated: Jul 21, 2020 05:20 IST
If the Supreme Court hadn’t scrapped the allocation of 214 coal blocks en masse in September 2014 on the ground of “illegality”, fugitive diamond merchant Mehul Choksi may well have been running a coal mine.
According to the latest charge sheet filed by the Enforcement Directorate (ED), a joint venture between Choksi’s Gitanjali Group of Companies and Kolkata based EMTA Coal Ltd , named as M/s GEMTA Coalmines Ltd, managed to get a contract for “development and operation” of Urma Paharitola coal block in Dumka, Jharkhand. The agency has relied on the statement of Upender Kumar, a director in GEMTA, for this information.
The coal mine was originally allotted by the UPA government in 2010-11 to two state run companies , M/s Bihar State Mineral Development Corporation and M/s Jharkhand State Electricity Board from Bihar and Jharkhand respectively. The two state-run companies formed a joint venture, M/s JHARBIHAR Colliery Ltd for the development and operation of the block but then they issued a tender in March 2012 seeking bids from experienced mining organizations including consortia for the same, the ED charge sheet, which has been reviewed by HT, states.
The charge sheet adds that the same year (2012), three companies belonging to Mehul Choksi’s Gitanjali Group (M/s Gitanjali Gems Ltd, Mozart Trading Pvt Ltd and Partha Gems LLP) formed a consortium with EMTA Coal Ltd and submitted their bid along with a bank guarantee of ~ 2 crore against the tender. The bid was successful, and a letter of intent (LoI) was issued to them in March 2014. GEMTA, Upender Kumar has revealed, was formed with an authorized capital investment of ~5 crore, and its registered office was in Kolkata.
Choksi’s Gitanjali Group held a majority stake of 51% shares in the company , while EMTA held 49%. “It was basically a third party contract to GEMTA and not direct allocation of a block to Choksi’s company,” said an ED official.
“After the decision of SC [in 2014], formation of joint venture– GEMTA Coalmines became ‘infructuous’, and bank guarantee of ~12 crore, which was submitted to JHARBIHAR expired on October 31, 2014,” the ED charge sheet says.
The SC had termed the allocation arbitrary; the allocation was estimated to have cost the state ~1.86 lakh crore. It was one of the scandals responsible for the loss of the United Progressive Alliance government in 2014.
When contacted, Mehul Choksi’s lawyer Vijay Aggarwal said : “ED’s whole case is based on statements recorded under Section 50 of Prevention of Money Laundering Act (PMLA). Admissibility of the same is under consideration by larger bench in Supreme Court as referred in Tofan Singh‘s case. So ultimately their cases are bound to fall flat. All this is a cock and bull story.”
Aggarwal was referring to the Tofan Singh Vs State of Tamil Nadu case, in which SC, while dealing with the issue of evidentiary value of confessions, referred the matter to a larger bench.
HT could not trace representatives of EMTA Coal Ltd .