CBI initiates probe into OMC- Sainik coal mining deal

Last Updated: Mon, Nov 19, 2012 19:30 hrs

The Central Bureau of Investigation (CBI) has initiated probe into the contentious joint venture pact between the state-owned Odisha Mining Corporation (OMC) and Delhi-based Sainik Mining & Allied Services Ltd (SMASL) for coal mining in the state.

Both companies had formed a JV named Kalinga Coal Mining (Private) Ltd for raising coal from Utkal D block in Angul district, allotted to OMC, with an estimated coal reserve of 138 million.

Conceding of controlling 74 per cent stake by OMC to SMASL allegedly violated Coal Mines (Nationalisation) Act-1973. A public interest litigation (PIL) was filed in the Supreme Court seeking cancellation of the JV agreement and probe into the deal by Central Bureau of Investigation (CBI). The apex court, while admitting the PIL on October 15 this year, had issued notices to the Centre, state government and the CBI to reply within four weeks.

As the matter came up for hearing on Monday, the additional solicitor general Siddarth Luthra appearing on behalf of CBI apprised the court that the matter has already been taken up by the investigation agency, said Suresh Tripathy, counsel for the petitioner.

The division bench comprising of Justice RN Lodha and Justice Anil R Dave was hearing the PIL.

The Attorney General of India, GE Vahanvati appearing for the Union government apprised the apex court that the Centre has already written to the state government terming the pact as illegal.

Interestingly, no one on behalf of the state government and OMC present in the court to plead their case during the hearing, Tripathy said.

The apex court has granted eight weeks time to the Centre to file a detailed response and the matter has been listed for next hearing in the second week of January.

It may be noted, OMC has recently scrapped the JV agreement following the controversy.

Earlier, the Ministry of Coal had pulled up OMC for violating the Coal Act by conceding controlling stake to a private player for developing a coal block allotted to a state PSU.

The ministry had issued showcause notice to OMC in July 2010, urging the PSU to raise its stake in the JV to at least 51 per cent. In addition to this, the ministry had also advised OMC to suitably modify the Memorandum and Articles of Association of the JV company.

In response, the state Chief Secretary, B K Patnaik in a letter to Coal secretary Alok Perti in February this year had informed that OMC has decided to raise its equity in the JV company to 51 percent from the existing 26 per cent.

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