Firm under probe for MP coal blocks also got Chhattisgarh ore reserves

Jul 29 2013, 11:37 IST
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SummaryCompany denies wrongdoing; CM Raman Singh says did not favour it

In April this year, the CBI raided the premises of Pushp Steel and Mines Ltd in Chhattisgarh, Delhi and other states in connection with alleged irregularities in the allotment of coal blocks.

The firm, like some others being investigated in the case, is accused of giving false information to obtain a coal block in Chhindwara, Madhya Pradesh, and two of its directors, Atul Jain and Sanjay Jain, are named in the FIR.

Investigation by The Indian Express has found that much before it got embroiled in the coal blocks allotment controversy, the company had obtained iron ore reserves in Chhattisgarh allegedly in a similar dubious manner and with the active support of the state government.

In fact, the allotment of iron ore reserves to PSML in Chhattisgarh became the basis for the company getting coal blocks in Madhya Pradesh.

However, PSML eventually lost the Rs 12,000 crore iron ore reserves after the Delhi High Court quashed the Chhattisgarh governments recommendation for prospecting lease (PL) to a firm which had an authorised share capital of just Rs 1 lakh.

The court said the decision of the Chhattisgarh government whose Chief Minister Raman Singh also holds the mining portfolio to recommend a prospecting lease to PSML was unsustainable in law and slammed it for unreasonableness of the action. A prospecting lease allows a company to survey the mining site, collect samples and gauge the potential of the area before getting a mining lease.

The state government has now asked PSML for an explanation in the light of the high court ruling after apparently flouting norms to recommend the mining lease to the company. PSML, meanwhile, has challenged the high court ruling in the Supreme Court.

Raman Singh said he had not favoured PSML in any way and it was chosen in a transparent manner. We withheld their leases after realising that they were not taking any step to begin production, he told The Indian Express.

The state governments records, however, contradict that claim. They show that the government recommended the PL and mining leases, actively pursued its case with the Centre and even defended the company in court. The government is also yet to cancel the leases and trees have been cut in the region to start mining work.

Atul Jain too denied any irregularity in his applications seeking the iron ore mining lease.

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