Accusing him of abusing his official position, CBI has said the then Coal Secretary PC Parakh reversed his decision to reject coal block allocation to Hindalco within months "without any valid basis or change in circumstances" and to show "undue favours".
In the FIR relating to allocation of Talabira II and III coal blocks in 2005, the CBI has named Parakh, Aditya Birla Group Chairman Kumar Mangalam Birla and Hindalco on various charges including criminal conspiracy and criminal misconduct on part of government officials.
The agency has said that during the 25th Screening Committee meeting, chaired by Parakh, applications of Hindalco and Indal Industries were rejected for mining in Talabira II and III "citing valid reasons".
On the recommendations of the Screening Committee, the coal blocks were allocated to Mahanadi Coalfields and Neyveli Lignite Corporation, both public sector undertakings.
These recommendations were placed before the "Competent Authority" which agreed with Parakh, who later issued letter of allocation to the PSUs on June 16 and July 15 of 2005.
Within days, a "personal meeting" took place between Parakh and Birla in which the industrialist requested for the allocation of Talabira II coal block, CBI said.
"Pursuant to these letters and personal meeting between Parakh and Birla, Parakh, by abusing his official position as a public servant recommended the allocation of Talabira II along with Talabira III coal block to Hindalco Industries Limited, along with other two companies without any valid basis or change in circumstances and with the sole intention to show undue favours to Hindalco Industries Limited," the agency alleged in its FIR.
It claimed Parakh ignored the considered deliberations and recommendations of Screening Committee of which he was the Chairman.
Defending his decision, Parakh said "There is absolutely nothing wrong with the decision. It was a very fair and correct decision that we took. I don't know why CBI thought that there is a conspiracy." He wanted Prime Minister also to be included as a conspirator.
Denying any wrong doing, Hindalco spokesperson said,""To imply that Our Chairman Kumar Mangalam Birla managed to overturn the decision of Screening Committee is preposterous."
The agency has alleged Parakh recommended formation of a joint venture between Mahanadi Coalfields, Neyveli Lignite and Hindalco with equity share holding of 70 per cent, 15 per cent and 15 per cent respectively.
CBI sources said they are looking into circumstances which led to sudden change in the position taken by Parakh.
The FIR alleged that inclusion of Hindalco reduced the share of Neyveli Lignite in the coal field.
"Due to this arrangement, the proposed power project of the NLC could not take off as planned," it alleged.
The agency after registering FIR had carried out searches at six locations in Delhi, Mumbai, Hyderabad and Bhubaneshwar in connection with its 14th FIR.