New Delhi: “I am upset, but this is a part of life,” Manmohan Singh, 82, India’s former prime minister, told reporters in Parliament after a special court on Wednesday summoned him and billionaire Kumar Mangalam Birla over accusations of criminal conspiracy and corruption in relation to the allotment of a coal mine in Odisha.
The summons could add to the political woes of the Indian National Congress, which lost power to the National Democratic Alliance (NDA) in general elections last year after 10 years in office at the head of the United Progressive Alliance (UPA).
Although no charges have been framed, the summons could culminate in the trial of the former prime minister in one of the two major corruption scandals that roiled his government, which ruled India between 2004 and 2014. While this case concerns irregularities in the allotment of coal mines, the other concerns those in the allocation of radio waves.
Partly as a result of those scandals, and also because of its mismanagement of the economy, the Congress was voted out of power in 2014, when it won just 44 seats in the general election. In subsequent elections, it was defeated in Maharashtra, Haryana, Jharkhand and Jammu and Kashmir.
The big question is whether the latest development will force the Congress to back-pedal on its course of confrontation with the government, wherein it has aligned with other opposition parties to block the passage of laws in the Rajya Sabha.
The special court hearing the coal mines scam said that on the face of it, there was enough evidence to summon Birla, the head of the Aditya Birla Group of which Hindalco Industries Ltd is a part, former coal secretary P.C. Parakh and two Hindalco executives—Shubhendu Amitabh and D. Bhattacharya—and Singh. The maximum sentence for criminal breach of trust is life imprisonment.
The order requires the accused to be present in court on 8 April.
“Hindalco reiterates that none of its officials, including its chairman Mr Kumar Mangalam Birla, have pursued any unlawful or inappropriate means for securing the allocation of the coal block,” the firm said in a statement. “The company’s management is confident that it will stand vindicated at the end of the ongoing legal process.”
The case pertains to the allotment of Talabira II and Talabira III coalfields in Odisha to a joint venture between Hindalco, Neyveli Lignite Corp. Ltd (NLC) and Mahanadi Coalfields Ltd in 2005. The Central Bureau of Investigation, in its first information report (FIR), had named Parakh, Birla, Hindalco and other unknown individuals for offences under section 120-B (criminal conspiracy) of the Indian Penal Code and under provisions of the prevention of corruption law.
Hindalco had applied for the Talabira II block, but this was allotted to NLC in August 2005. After Birla pointed out that Hindalco had applied for the mine first, in 1996, and that a coal linkage it was given earlier was not used—the grant of this was presented as a reason by the screening committee for not granting Talabira II to the company—and after it received a letter from Odisha chief minister Naveen Patnaik supporting Birla’s suit, the Prime Minister’s office (PMO) asked the screening committee to reconsider its decision.
The committee—headed by Parakh—did, and clubbed the Talabira II and Talabira III mines and granted it to NLC, Hindalco, and Mahanadi Coalfields.
Most coal block awards made by Singh’s government were overturned late last year by the Supreme Court, which ruled the process illegal.
The case, known as “Coalgate”, came to light in 2012 after the government auditor said the exchequer had lost up to Rs.1.86 trillion due to collusion between officials and private firms to depress the cost of coal-field awards.
In an ongoing auction of coal mines, the first 32 blocks have brought in a projected $32 billion, coal secretary Anil Swarup told Reuters.
The auctions were ordered by the court but made possible by an executive order by the ruling NDA which has been trying to pass related legislation.
In a 75-page order on Wednesday, special judge Bharat Parashar issued summons to the accused. He found evidence of criminal conspiracy and criminal misconduct against all. However, Singh and Parakh, owing to the public office they held, were also accused under the substantive offence under Section 409 (criminal breach of trust by a public official). The order specified that Singh’s role during the allocation of a coal block to Hindalco was in his power as the then coal minister.
Putting it on record that parliamentary privileges do not apply to Singh and Parakh, judge Parashar said that despite Singh’s present Rajya Sabha membership, his tenure as the coal minister had expired and thus there would be no need for a prior sanction by the government to take cognizance of the offence.
Parashar limited his order to the allocation of Talabira II block to Hindalco. However, he noted that actions of the accused had also caused Talabira III, set aside for a state-owned company, to go to a private company.
“A concerted and joint effort was made by the representatives of M/s HINDALCO and the public servants as mentioned above both in MOC (ministry of coal) and PMO to scuttle the initial allotment of Talabira-II, coal block made in favour of NLC. In other words, it is prima facie clear that a well planned conspiracy was hatched to accommodate M/s HINDALCO in Talabira-II coal block so as to extend undue benefit/wrongful gain to M/s HINDALCO while at the same time causing wrongful loss not only to the Government of India who was the custodian of the nationalized natural resources of the country but also to NLC,” the judge said in his order.
Regarding Birla, the court was no less scathing. “Sh. Kumar Mangalam Birla played an active role by tapping his bureaucratic and political channels in order to secure allocation of Talabira-II, coal block in favour of M/s HINDALCO,” it said. Parakh has been criticized as he overturned the decision he took as the chairman of the 25th screening committee handling the allocations.
The Congress asked the Bharatiya Janata Party (BJP), the dominant constituent of the NDA, to not politicize the issue.
“Manmohan Singh has always stood for a transparent scrutiny process on all such issues. We are confident that on an examination of full facts, it will unequivocally establish the fairness, transparency and integrity with which 15% share in Talabira II and Talabira III coal block was offered to Hindalco,” Randeep Surjewala, spokesperson of the Congress, told reporters on Wednesday. “We condemn the BJP for its poor attempt to politicize the ongoing judicial process,” he added.
Singh said he was evaluating his legal options, which include seeking a stay on the summons from a higher court.
“The BJP welcomes CBI’s questioning of former prime minister Manmohan Singh. The then prime minister was also coal minister in the UPA-1 tenure and most of the illegal allotments happened during his tenure as coal minister. The then PMO was being run under directions of the Congress leadership. During the UPA tenure, every effort was made to stall investigations, shield prime minister Manmohan Singh and its political leadership who were the prime movers of the coal scam,” said BJP spokesperson G.V.L. Narasimha Rao.
“Singh may be upset personally but politically it will not make much of a difference to the Congress party because it is already at its rock bottom. The only thing it could do is give a handle to the BJP to rebrand the Congress as a corrupt party,” N. Bhaskara Rao, a New Delhi based political analyst said.
Shares of Hindalco closed down 5.5% on the BSE on Wednesday. The stock has now fallen for five consecutive trading sessions. Since the beginning of this year, the stock has lost 15.7%. The Sensex has gained 4.5% in the same period.
Ashwin Ramarathinam in Mumbai and Reuters contributed to this story.