This is the first time CBI has named a government functionary who had been involved in the allocation. CBI investigations revealed Jindal Steel and Power Ltd (JSPL) and Gagan Sponge Iron misrepresented facts and gave wrong information about the company's land, water supply and previous allocations to get the coal block in January 2008. Naveen Jindal was the signatory in all the documents given to the coal ministry.
The agency found the Jindal group companies bought shares of Saubhagya Media, a company owned by Rao, at an inflated rate of Rs 100 apiece - at a time when the quoted price was just Rs 28 apiece. This raised CBI's suspicion. Further probe helped the agency establish a money trail that showed kickbacks of Rs 2.25 crore had been received by Saubhagya Media from Jindal group firms - JSPL, Gagan Sponge, Jindal Realty and New Delhi Exim. All the five companies have been named in the FIR. These transactions took place within the same year of coal block allocation to JSPL and Gagan Sponge Iron.
JSPL's head of external affairs, Manu Kapoor, said: "JSPL, as a law-abiding company, is governed by a strong ethical code of conduct. This is an ongoing CBI investigation into coal block allocation. At this stage, JSPL is committed to fully cooperating with CBI."
CBI, which recently got an earful from the Supreme Court for sharing its status report with government officials, is also likely to seek the government's permission to name other members of the screening committee for coal block allocation in its FIR. A senior CBI official said such a permission was required since most officials were of the joint secretary rank and above. CBI has also written to the corporate affairs ministry to reconsider its decision and allow prosecution of H C Gupta, the then coal secretary, and currently a member of the Competition Commission of India.
This the twelfth case registered by CBI in its probe into coal block allocations between 2006 and 2009. It has named unknown officials of the screening committee and unknown directors of the private companies named in the FIR.
CBI also conducted raids at 19 locations in Delhi and Hyderabad, including residences of Jindal and Rao. CBI officials also sealed some cupboards at Jindal's house until he returned to Delhi, after which those would be opened in his presence.
The current case has been registered under Section 120-B, read with 420 of India Penal Code and 13 (1) (d) of the Prevention of Corruption Act.
Meanwhile, the Bharatiya Janata Party lashed out at the Congress for yet another instance of "its corruption-tainted regime". BJP spokesperson Prakash Javadekar said, "BJP welcomes the raids on former coal minister and Congress MP Naveen Jindal." He said the CBI inquiry into the case was launched on the complaints of BJP leaders and wanted CBI to trace the money trail in this case of "monumental corruption".
The Congress responded, saying: "The law will take its course." Party spokesperson Raj Babbar clarified: "We will not shield any person, however big he might be."
1996-2009: JSPL allocated 5 coal blocks in Chhattisgarh, Jharkhand, Odisha and Madhya Pradesh
Aug 17 '12: CAG alleges govt extended undue benefits to firms by not auctioning 57 blocks between 2006 and 2011
Aug 27 '12: CAG report tabled in Parliament, pegs loss of Rs 1.86 lakh crore to the exchequer
Sep '12: CBI begins probe in the alleged scam after CVC forwards complaints
Jun 2013: CBI files FIR, names Naveen Jindal & Dasari Narayana Rao