Coalgate: 'Law abiding' Jindal Steel promises to cooperate with CBI

Jindal Steel and Power Ltd said today it was committed to fully cooperating with the Central Bureau of investigation (CBI), after the government agency registered a case against the company over coal block allocations.

"JSPL, as a law abiding company, is governed by a strong ethical code of conduct," said Manu Kapoor, Jindal Steel's head of external affairs. "This is an ongoing CBI investigation into coal block allocation. At this stage of investigation, JSPL is committed to fully cooperate with CBI."

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The CBI is investigating alleged irregularities in the awarding of coal mining rights potentially worth billions of dollars to private companies.

According to a CNN-IBN report, the twelfth FIR has been filed by the CBI in connection with the coal block allocation case and names the Jindal Group's Iron and Sponge Limited, Gagan Sponge and two other companies.

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The FIR also reportedly named former minister of state for coal Dasari Narayan Rao and other members of the screening committee that decided on coal block allocations.

Jindal Steel and Power Limited stocks fell by 18 percent on the news of the CBI action. Jindal Saw was down 15 percent leading to a 200 point fall in the Sensex. At 11:09 pm, the Sensex was down 201 points at 19238.29, while the NSE Nifty was down 61 points at 5836.

On 7 June, the coal ministry had issued show cause notices to 11 coal firms, including Jindal Steel and Power, Monnet Ispat, NTPC and GVK Power for not developing the mines allotted to them and sought an explanation for delays in production, failing which mines would be de-allocated.

The maximum number of notices were issued to the Jindal group led by Congress MP Naveen Jindal, which was allocated a total of 11 blocks.

The notices were issued for 10 coal blocks which includes Utkal-B1, Pakri Barwadih, Urtan North and Mandla North coal block.

The crackdown is part of the government's exercise to ensure that the allocated blocks do not remain unproductive for long. The Government has already de-allocated coal blocks in 22 cases and bank guarantees have been forfeited in case of another 36 entities.

With inputs from Reuters