The Supreme Court's decision of terming all coal block allocations as illegal has cast a shadow on Jindal Steel and Power Limited (JSPL) owned by former Congress MP Naveen Jindal, as the company is the biggest beneficiary of the allocations.
JSPL tops the list of allocations, getting coal blocks with geological reserves of 2,341 million tonnes between 1996-2009. The biggest gain for the company was the Ramchandi Promotion Block in Talcher coal field of Odisha, with reserves of 1,500 million tonnes, allocated to it in 2009.
A JSPL spokesperson stated that the company is evaluating the implications of the SC judgment. "We are not in a position to comment as we are currently evaluating the Supreme Court judgment and the implications to JSPL," the spokesperson said.
The Central Bureau of Investigation (CBI) has already registered a case against JSPL and former minister of state for coal Dasari Narayana Rao and his media firm Saubhagya Media for alleged irregularities in the 2008 allocation of Amarkonda Murgadangal coal block in Birbhum, Jharkhand. JSPL had allegedly misrepresented facts about land, water supply and previous allocation to establish their eligibility for the block and after the allocation, Jindal's companies had allegedly invested in Saubhagya Media. Another Jindal company, Jindal Power Limited, according to reports, was getting coal from the allocated blocks at cheap rates in Chhattisgarh, while it was selling power at high prices, which contributed greatly to the group's success.
JSPL and 19 other coal families have received nearly a quarter of the total geological coal reserves across the country. As per the coal ministry's records, of the total 43,346.35 million tonnes of coal reserves allocated, 20 companies have got the coal block with more than 10,000 million tonne reserves.
These coal families are now apprehending "cancellation" of their allocation, as the court has already termed them illegal and will further pronounce its decision on 1 September. In case of cancellation, the government and these companies are bound to lose thousands of crores of rupees.
Interestingly, former Attorney General during the UPA II government, Goolam Vahanvati had told the SC that the companies have invested around Rs 2 lakh crore in their blocks, hinting that any cancellation of licenses could result in huge losses.
Of the 195 allocated coal blocks, only 30 had started production, according to a 2013 Parliamentary committee report on coal and steel. Around 160 blocks allocated during the controversial period of 2004-2008, only a few had started production.
The other major companies that will be greatly impacted by the SC decision are Strategic Energy Technology Systems (coal block of 1,500 million tonnes), Electrosteel Castings (1,155 million tonnes), Bhushan Steel and Strips (1,042 million tonnes), Jayaswal NECO (448 million tonnes) and Tata Steel (250 million tonnes).
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