ibnlive » India

Aug 30, 2011 at 09:30pm IST

Now, a coal scam unearthed in Chhattisgarh, MP

New Delhi: CNN-IBN unravels a Bellary-like coal scam in Chattisgarh and Madhya Pradesh, where Prakash Industries, a heavyweight in the mining and steel sector, forged documents to get coal mines allocated in both the states and diverted nearly 50 per cent of coal to the black market.

For the Reddy brother's in Karnataka, the modus operandi was simple - extract more than stipulated iron ore from the mines in Bellary and sell them off in the black market. Now, Prakash Industries has indulged into a similar scam in Chattisgarh and Madhya Pradesh.

Prakash Industries Limited, the company under the scanner, is owned by Ved Prakash Agarwal, brother of jai Prakash Agarwal who runs a BJP-backed NGO Surya Foundation.

An ongoing investigation by CBI shows that Prakash Industries, a heavyweight in the mining and steel sector, was allotted coal blocks in Chattisgarh and Madhya Pradesh in connivance with officials from Coal and Steel ministries after submitting forged and fabricated documents.

In north Chhattisgarh's Korba district, Prakash Industries emptied out the entire Chotia coal block, ostensibly for expanding their sponge iron plant. But CBI investigation shows that the expansion never happened, and the company diverted nearly 50 per cent of the entire coal mined to the black market, making thousands of crores.

The allegation is that Raman Singh's government has been helping Prakash Industries to bid for more coal blocks..Raman Singh brushes aside such allegations

"The CBI has been investigating. But these mines are with Prakash Industries for long time," said Chhattisgarh Chief Minister Raman Singh.

The excise department enquiry clearly showed that the company has suppressed their production figures and clandestinely removed coal into the black market. It pointed at connivance between officials of coal and steel ministry and Joint Plant Committee and a fine of more than Rs 90 crore was levied. The central excise and customs department had even recommended criminal action against the company and their political connection ensures that no action is taken, either by UPA at the Centre or state governments in Chattisgarh and Madhya Pradesh

Yet, the Rs 1,526-crore company, which in 2010 was earmarked by Arcellor-Mittal for buyout, is blatantly siphoning off a scarce natural resource and making millions from it.