Court acquits AES Chhattisgarh, its director in coal block allocation case
The court found that the prosecution failed to prove its case as the evidence presented highlighted stark differences in corporate practices between the USA and India.
In a significant judgment on December 19, Special Judge Arun Bhardwaj acquitted AES Chhattisgarh Energy Private Limited (AES Chhattisgarh) and its director, Sanjeev Aggarwal, in the coal block allocation case. The charges centered around alleged intentional misrepresentation and concealment of facts during the allocation process. The court found that the prosecution failed to prove its case as evidence presented highlighted stark differences in corporate practices between the USA and India.
Prof Jonathan Macey, a key witness, emphasized the legal anonymity of beneficial owners in the USA, contrary to Indian requirements under Section 187 C of the Companies Act, 1956. Crucially, the court acknowledged that the relationship between AES, USA, and AES Chhattisgarh, though compliant with US laws, faced misinterpretation in India. The court held that under Section 4 (6) of the Companies Act, 1956, AES Chhattisgarh should be treated as the subsidiary of AES, USA.
This verdict sheds light on the need for a nuanced understanding of international corporate practices, emphasizing that practices deemed legal in one jurisdiction may lead to misinterpretation elsewhere. The implications of this judgment may extend to similar cases, urging a reassessment of alleged misrepresentation in the context of coal block allocations.