By Dr. Olav Albuquerque
Former Indian Prime Minister Manmohan Singh is a worried man. For if the Supreme Court of India does not quash the summons issued to him by the CBI Special Court for allegedly favouring coal block allocation to 11 companies of Hindalco, owned by the private sector Aditya Birla group, Singh will have the dubious distinction of being second to his former boss, the late PM P.V. Narasimha Rao, to face a criminal trial for corruption.
Singh has got a boost with the Congress president Sonia Gandhi publicly displaying her support to him by leading a march to his house on March 12 in New Delhi which was telecast live throughout India. Singh was widely seen as a weak and ineffective Prime Minister who could not act without Gandhi’s go ahead and even tolerated corrupt ministers. The million dollar question is whether the Indian Supreme Court will give a reprieve to him by quashing the summons issued to him as Accused No: 6, charging him with criminal conspiracy and fraud in coal block allocation?
Prime Minister NarendraModi publicly derided Singh during election campaigning for his weakness and catering to power brokers.In sharp contrast, Modi is seen as a strongman who has given the Border Security Force permission to defend Indian borders without seeking his permission to fire across the line of control. As a RSS swayamsevak, for Modi, India’s interests are foremost.
Singh was earlier the finance minister under late P.V. Narasimha Rao and introduced economic liberalization in 1991 simultaneously with the disintegration of the Soviet Union which was the largest supplier of munitions to Indian armed forces. Narasimha Rao had the dubious distinction of being the only Indian Prime Minister to be convicted for bribing Jharkhand MuktiMorchaMPs not to support the no confidence motion against his government in July 1993.
Rao got a reprieve whenthis conviction was later overturned by the Delhi high court. When he died on 23rd December 2004, few Congressmen attended his funeral. He was suspected of joining hands with the VHP and Bajrang Dal to remain a mute spectator when theBabri Masjid was demolished sparking riots throughout India in 1991.
Manmohan Singh is now charged with causing losses to the Indian exchequer of Rs186,000 crore by coal block allocation to the Hindalco group during 2004-09 despite an expert screening committee of bureaucrats recommending against it. The scam broke out when a Comptroller and Auditor General (CAG) report stated that 194 coal blocks were arbitrarily allocated to favoured business enterprises between 2004-09 in a flawed manner which resulted in private companies such as Essar Power, Tata Steel, Tata Power and Jindal Steel and Power making windfall profits with corresponding losses to the Indian exchequer. At least 25 companies were pinpointed in the CAG report.
The CAG report further alleged that despite having the opportunity to bring in transparency, the Indian government did not introduce the process of competitive bidding. It said many politicians lobbied for allotment to certain private companies raising questions about crony capitalism. The CAG also said some private players got more coal blocks than needed for their captive power plaint operations and several companies sold coal in the open market which was actually meant for internal use. Many firms were also found to be squatting on coal blocks for years on end.
Significantly, apart from being the Indian Prime Minister, Singh held the vital coal portfolio and wrote to the coal ministry to expeditiously re-examine why Hindalco should not be allotted the coal block Talabira-III in Jarasandha district of the eastern state of Odisha after the industrialist, Kumar Mangalam Birla, who owned Hindalco, wrote to him and met him personally. Hence, Singh held two vital portfolios of being the head of the council of ministers and also the coal portfolio when he allegedly used his clout to favour the Hindalco group.
To return to the present, Judge Bharat Parashar, who summoned Singh as Accused No 6, said he had to act with a “heavy conscience” and with “full realization” of the effect this would have on the “morale of the country as a whole”, Singh faces charges of criminal conspiracy, criminal breach of trust by a public servant under the IPC and under provisions of the Prevention of Corruption Act after “there was a conscious effort on his part to somehow accommodate the K.M.Birla flagship company Hindalco.”.
Parashar said Kumar Mangalam Birla “played an active role” by “tapping his bureaucratic and political channels” to secure the coal block allocation. “Prima facie it is clear that the impugned criminal conspiracy, which was initially conceived by Hindalco group chief executive Shubhendu Amitabh and its Managing Director D Bhattacharya and the overall group head Kumar Mangalam Birla and Hindalco, was carried out by roping in the coal secretary and IAS officer P C Parakh and, thereafter, the then Minister of Coal, DrManmohan Singh.”
In his first remarks after the court order, Singh said “I am upset” and hope to “prove my innocence”. When reporters sought his comment, he said: “…….. this is part of life. I have always said I am open for legal scrutiny… I am sure truth will prevail and I will get a chance to put forward my case with all facts.” He said he respected the judicial process and “I hope in a fair trial I will prove my innocence”.
Hindalco said it would defend itself through “the legal process. None of its officials, including its chairman Kumar Mangalam Birla, pursued any unlawful or inappropriate means for securing the allocation of the coal block,” the company said in a statement.
Earlier, the Supreme Court of India had cancelled 214 out of 218 coal block allocations made between by the Indian Government between 1993 and 2011. The apex court had also levied a penalty of Rs 295 per ton of coal produced on private companies managing the now de-allocated blocks.
This would translate into estimated total penalties of around Rs 10,500 crore based on a figure of around 350 million tons of coal to be produced by April 2015. Most expertswere wary that de-allocation would severely impact investor sentiment in view of the fact that a total of Rs 3 lakh crore were invested by power and steel companies for development of coal blocks.
Ironically, power, steel and mining companies stand bore the greatest brunt of this de-allocation process as industrial mass consumers of coal. The power sector was the most severely affected as coal-based power represents nearly 60 percent of India’s total power production capacity. After the earlier ruling of the Supreme Court, 23 major power and steel companies lost nearly Rs26,000 crore in terms of their market capitalization.
Coal block allocation also impacts all other areas of the Indian economy including the defence and armed forces because most captive power plants in India work on coal.
(The author is former journalist associated with The Time of India)
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— The Daily Mail - People's Daily