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Coalgate: What is the scam all about

By Vicky
Google Oneindia News

On Monday, a special court of the Central Bureau of Investigation sentenced former secretary H C Gupta, former joint secretary in Coal Ministry K.S. Kropha and former director of Coal Ministry K C Samaria to two years in prison for their involvement in the Coal Scam. They were however granted bail so that they could challenge the sentence in the High Court.

Coalgate: What is the scam all about

They were found guilty under the provisions of the Prevention of Corruption Act and the Indian Penal Code. The case on hand dealt with the irregular allocation of coal blocks in Madhya Pradesh to Kamal Sponge Steel and Power Ltd.

What is Coalgate:

The case is popularly known as Coalgate. There was a huge political row over this case with several bureaucrats and leaders under the UPA regime coming under the scanner.

A report by the Comptroller and Auditor General of India showed inefficient and possibly illegal allocation of coal blocks between 2004 and 2009. It estimated loss to the exchequer to the tune of Rs 10.7 lakh crore. The amount was however toned down to Rs 1.86 lakh crore in the final report.

The point made in the CAG report was that there was improper allocation. It was said that this was to be done through competitive bidding. The government however avoided the competitive bidding, the CAG report said. The revenue secured from the allottees for the allocation was lesser than what could have been if there was competitive bidding, the report further stated.

Report rebutted:

After the CAG report was submitted the then Prime Minister Manmohan Singh
read a statement that rebutted the report in the alleged/presumptive loss as well as the reading of the law. He had also said that the observations of the CAG were disputed.

The initial CAG report didn't talk about corruption, rather inefficient allocation. The BJP then filed a complaint with the Central Vigilance Commission. The CVC then directed a CBI probe into the matter.

Several companies were named in the FIR which mentioned malicious means for securing allocation, overstating net worth, non-disclosure of prior allocation and hoarding rather than the development of allocated resources.

Industrialists like Naveen Jindal and Kumar Mangalam Birla were also named in the FIR. The Parliamentary standing committee in its report said that the allocation of blocks between 1993 and 2008 had been unauthorised. It recommended deallocation of all blocks where construction had not started and forfeiture of bank guarantees in others.

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