Charges Levied in India Coalgate Scandal

Charges Levied in India 'Coalgate' Scandal

"We have filed a preliminary case under the Prevention of Corruption Act against Mr. Jindal, and we have raided 19 locations, including the premises of Mr. Jindal," a spokesman for the Central Bureau of Investigation said.

NEW DELHI—Indian police today filed preliminary corruption charges against a leading steel company and its chairman, a prominent ruling Congress party lawmaker, over allocation of coal mining rights.

The federal Central Bureau of Investigation (CBI) said in a statement it had also filed preliminary graft charges against a former junior government coal minister, Dasari Narayan Rao.

The CBI added in the statement it had raided 19 locations across New Delhi and in the southern city of Hyderabad.

The CBI's announcement was a fresh blow for Prime Minister Manmohan Singh's Congress government, which has been shaken by a string of corruption scandals and must face voters in 2014 elections.

The CBI said it had filed preliminary graft charges against Jindal Steel and Power, whose shares slid more than 15% on the news, and against the company's chairman, Congress MP Naveen Jindal.

Jindal Steel is among a slew of companies under investigation in connection with the allocation of coal mining rights in what has been dubbed "Coalgate" by India's media.

"We have filed a preliminary case under the Prevention of Corruption Act against Mr. Jindal, and we have raided 19 locations, including the premises of Mr. Jindal," a CBI spokesman said.

The CBI has been probing allegations by the national auditor last year that the government, when granting coal mining rights, may have given away tens of billions of dollars in windfall gains to 100 private and some state-run firms in exchange for kickbacks.

Opposition Middlingly Pleased

The opposition Bharatiya Janata Party said it welcomed the cases filed against Jindal and Rao but called it "too little too late."

The cases "show how Congress loots the country," BJP spokesman Prakash Javadekar told a news conference.

The CBI alleged in its statement that Jindal's company "misrepresented facts to get coal blocks."

Jindal could not be immediately reached for comment but has in the past strongly denied any allegations of wrongdoing.

Jindal Steel spokesman Manu Kapoor said in a statement that the company was "law-abiding" and "committed to fully cooperate" with the CBI. The company's shares shed 15.2% to 226.35 rupees.

The Supreme Court in April rebuked the nominally independent CBI for showing the government a report on its investigation into alleged corruption in the mine allotments.

Last month, law minister Ashwani Kumar resigned after the Supreme Court was told the government had changed the CBI's preliminary report on the awarding of the mines.

The scandal has brought opposition calls for Prime Minister Manmohan Singh to resign. Singh, in addition to being prime minister, was coal minister for some of the period under police scrutiny.

Other companies named in Tuesday's charges include Jindal Realty and former minister Rao's firm, Saubhagya Media, the Press Trust of India reported. There was no immediate comment from Rao.

Copyright Agence France-Presse, 2013

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