Indian police make raids over coal scandal

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Indian police on Tuesday opened a probe into five coal companies after raiding premises across the country over the alleged misallocation of lucrative mining rights.
Central Bureau of Investigation (CBI) spokeswoman Dharini Mishra said that 30 premises had been visited as detectives examined whether coal companies were guilty of cheating in a scandal that has rocked Prime Minister Manmohan Singh.
“We have registered an FIR (First Information Report) after conducting raids in 10 cities,” Mishra told AFP, adding that coal company offices in New Delhi, Mumbai and Kolkata had been targeted.
The FIR, which is a written report representing the first stage of a police enquiry, says the companies are being investigated for cheating and criminal conspiracy.
Mishra declined to name the companies involved but local TV channel NDTV said two of the firms named in the report had links with a Congress parliamentarian from the western state of Maharashtra.
The CBI is set to probe whether some of the firms were set up only to win the coal blocks allocated by the government before selling them on to a third-party at massive profit.
An official auditor’s report last month criticised the gifting away of coal blocks, instead of auctioning them to the highest bidder, and said the process of selecting companies “lacked transparency and objectivity”.
Private operators who won coal blocks without competition enjoyed “financial gains to the tune of 1.86 trillion rupees ($33.4 billion)” since 2004, some of which should have gone to the government, the auditor claimed.
Singh’s coalition government, led by the left-leaning Congress party, has been beset by a string of corruption cases since re-election in 2009 and the latest allegations of mismanagement have led to renewed pressure on him.
The coal scandal implicates the 79-year-old directly because he served as coal minister as well as prime minister from 2004-2009.