x Abu Dhabi, UAEMonday 24 July 2017

'Coalgate' scandal in India turns up the heat on Singh

India Dispatch: India's Central Bureau of Investigation raided the premises of a number of companies as part of a widening investigation into allegations of corruption in the coal mining industry.

Amid fresh calls for the resignation of the Indian prime minister Manmohan Singh, India's Central Bureau of Investigation (CBI) yesterday raided the premises of a number of companies as part of a widening investigation into allegations of corruption in the coal mining industry.

The raids in cities including Delhi, Mumbai, Hyderabad and Kolkata came as the CBI filed five cases against the companies as part of the examination into alleged corruption over the allocation of coalfields.

The scandal, which has been dubbed "Coalgate" by India's media, has led to a deadlock in the country's parliament at a time when India is grappling with an array of economic issues, including slowing growth in its economy and high inflation.

Government auditors have compiled a report that alleges India lost out on more than US$33 billion (Dh121.2bn) during its sales of coalfields between 2004 and 2009.

The companies named by the CBI in connection with the investigation are Vini Iron and Steel, Nav Bharat Steel, JAS Infrastructure, JLD Yavatmal and AMR Iron and Steel. Vaibhav Tulsyan, who was a former director at Vini Iron and Steel, said the company had been sold off six months before the coal block allocation, which was made in November 2008.

Still, he said his offices were being raided yesterday by the CBI, with about 50 investigators seizing computers and files at three of his company's premises in Jharkhand. "Once upon a time it was our company," Mr Tulsyan said. "Right now the CBI is here in our premises. We were not the beneficiary of the coal block allotment. They are looking for some links to some people. They are taking the files that they think are of some use to them. Currently we don't have any links with the company."

The companies named could not be reached for comment.

The opposition Bharatiya Janata Party has alleged the government received bribes in return for the allocation of coal blocks. Opposition leaders have been calling for Mr Singh to quit because of the scandal. He was the coal minister during some of the years when the sales were made but has adamantly denied any wrongdoing. They also demanded the cancellation of 142 coal block allocations. These demands have been rejected by the government.

The consensus is Coalgate is only further delaying major reforms that need to be put into place to help boost India's economy.

India's economy grew 5.5 per cent in the first quarter of the financial year, data released last week showed. This compared with growth of 8 per cent in the same quarter a year earlier. Observers have drawn comparisons between "Coalgate" and the 2G scandal, which resulted in the resignation of the former telecommunications minister, A Raja.

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