Industrial Metals

Last week, India’s Supreme Court reprimanded the country’s coal ministry for slowing down the Coalgate investigation by losing files crucial to the case.

Coal Investing News last reported on India’s protracted Coalgate scandal back in May, but four months later the issue is still far from resolved. 

In a new development, India’s Supreme Court, which is supervising the Central Bureau of Investigation’s (CBI) examination into the case, has “severely criticized” the CBI’s slow progress, also chastizing the country’s coal ministry for purportedly losing files that are “crucial” to the probe, The Times of India reported.

What is Coalgate?

In brief, Coalgate concerns the fact that between 1993 and 2011, the Indian government gave private and government companies 206 coal blocks for free, according to dna, a Mumbai-based English daily. Indian Prime Minister Manmohan Singh is central to the issue as he was the country’s coal minister between 2006 and 2009, the years during which the bulk of the coal blocks were given away, reportedly in hopes that doing so would spur coal production.

Problems arose last year when India’s comptroller auditor general released a report stating that if the coal blocks had been auctioned off, the country could have earned Rs 1.86 lakh crore ($37 billion).

Supreme Court reprimand

As mentioned, the case is progressing slowly, and the Supreme Court is beginning to get fed up.

Responding last Thursday to a recent status report from the CBI, a bench made up of Justices R.M. Lodha, Madan B. Lokur and Kurian Joseph laid into the organization, commenting, “[y]ou (the CBI) are still driving in the first gear. You have to pick up speed. We understand it is a huge task. But things have to be taken to logical end,” according to The Times of India. They instructed the CBI to try to finish its probe by the end of the year.

One factor hindering the CBI’s speed is that only two Indian states out of 20 have agreed to let it carry out its investigation within their borders, despite the fact that permission requests were sent as far back as February.

Another is the coal ministry’s loss of files important to the case. However, the justices had little patience for that excuse. Lodha expressed annoyance with the coal ministry, commenting, “[y]our explanation is that files are being searched, traced. This will not help. Wherever prima facie there are financial irregularities, files are missing. These are official records, they can’t be not available. Have you filed an FIR on the missing files? Is it an attempt to destroy records? Ultimately the truth has to come out,” as per The Economic Times.

The Supreme Court justices are not the only ones who are skeptical about the files’ supposed disappearance. The Wall Street Journal quotes Prakash Javadekar, a spokesman for the opposition Bharatiya Janata Party, as saying, the “[f]iles are not missing. The CBI is being misled … to save the prime minister, it is a massive cover up.”

Some of the missing files reportedly include letters in which Vijay Darda, a member of parliament, recommends what companies were to be awarded coal blocks.

The coal ministry has now been given two weeks to provide the CBI with all of the documents it requires to move the case forward, The Times of India states. If it fails to do so, it will face a CBI investigation into how the files went missing — and who is to blame for their disappearance.


Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article. 

Related reading: 

India’s Energy Shortage Draws Attention in Wake of Coalgate



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