Agencies/New Delhi

Investigators yesterday filed corruption charges linked to a multi-billion rupee coal scandal against the Aditya Birla Group, one of India’s leading conglomerates, and its chairman Kumar Mangalam Birla.
The Central Bureau of Investigation conducted raids at company premises in Mumbai, New Delhi, Hyderabad and Bhubaneswar.
It filed charges against more than a dozen individuals and firms in connection with the ‘Coalgate’- alleged irregularities in the allocation of coal blocks during 2004-06.
A national auditor’s report in 2012 questioned the method of coal-block allocations at bargain prices to private companies, rather than selling them at auction.
The Comptroller and Auditor General said the government lost $33bn in allocating 155 coal licences.
Hindalco Industries Ltd, an Aditya Birla group company, had been allegedly favoured with an allocation in the eastern state of Odisha in 2005, CBI sources said.
Group chairman Birla and other unnamed officials were accused of criminal conspiracy that involved government officials.
The Aditya Birla group has interests ranging from metals to cement and telecommunications.
The CBI also filed charges against former coal secretary P C Parekh and other officials yesterday.
As the news broke, shares of key Birla companies fell, including Hindalco, which lost 5% before recovering. The group denies any allegation of wrongdoing.
Birla is the second big gun to be reeled into this scandal.
Naveen Jindal, member of the billionaire Jindal clan and a Congress Party politician, was charged by the CBI last year for alleged kickbacks paid by him to a former coal minister in exchange for being granted mining rights for coal.
Jindal, who was questioned by the CBI last month as part of the ongoing investigation, has seen shares of his Jindal Steel & Power plunge since the scandal broke.
In August, the government had admitted that certain files relating to the coal scandal had gone missing.
The Supreme Court had also criticised the CBI for the slow pace of the investigation.
Birla who belongs to one of the first families in Indian business is a much respected name and considered a flag bearer of corporate governance. His recommendations on corporate governance became the standard adopted by the stock market regulator some years ago.
He recently stepped down from the board to the Reserve Bank of India after his company applied for a new banking licence to avoid any potential conflict of interest.
Several big names in Indian business have got embroiled in the series of corruption scandals that have come to light in the second term of the present Congress Party-led government.
Said a Mumbai banker: “This is more damaging to the image of corporate India than any flip-flop in government rules. ”
The coal issue is particularly sensitive for the government as Prime Minister Manmohan Singh had direct control over the coal ministry during the period of the alleged irregularities.