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India's CBI begins searches over coalfields sale 'Coalgate controversy': India police raid coal firms
(about 1 hour later)
Police in India say they are carrying out searches at the premises of five companies which got coalfields by "misrepresenting facts". Police in India are carrying out raids across 10 cities as as part of an investigation into alleged corruption in the allocation of coalfields.
Government officials and individuals are also being raided in 10 cities including Calcutta, Mumbai and Delhi. Police say they are searching the premises of five companies, which allegedly misrepresented facts prior to being allocated the coalfields.
A recent report by government auditors said the country lost $33bn (£20bn) by selling coalfields cheaply. Government officials and company employees are also under investigation.
The raids come even as the government has rejected the opposition demand to cancel the sale of the coalfields. Government auditors recently said India lost $33bn (£20bn) selling coalfields cheaply between 2006 and 2009.
The parliament has been deadlocked over demands by the opposition Bharatiya Janata Party (BJP) that the government should cancel the sale and order an independent probe into the matter. The raids come as the government rejected opposition demands to cancel the sale of the coalfields.
Although the report by government auditors has exonerated Prime Minister Manmohan Singh, BJP leaders say he must step down as he was heading the coal ministry at the time of the sale. Parliament has been deadlocked over demands by the opposition Bharatiya Janata Party (BJP) that the government should cancel the sale and order an independent probe into the matter.
Although the report by government auditors does not mention Prime Minister Manmohan Singh, BJP leaders say he must step down as he was heading the coal ministry at the time of the sale.
Mr Singh denies any wrongdoing and has refused to quit.Mr Singh denies any wrongdoing and has refused to quit.
'Procedure is underway' Public anger
On Tuesday morning, the Central Bureau of Investigation (CBI) registered five cases for alleged cheating against five companies, various individuals and officials and begun conducting raids at 30 locations. On Tuesday morning, India's Central Bureau of Investigation (CBI) registered five cases for alleged cheating against five companies, various individuals and officials and began conducting raids at 30 locations.
Officials, however, say the CBI inquiry in the alleged corruption in allocation of coalfields began before the government auditors report came out last month. Raids were being carried out in Delhi, Mumbai, Calcutta, Patna, Hyderabad and several other cities, a CBI spokesperson said.
But correspondents say the timing of the raids suggests an attempt by the beleaguered government to be seen as doing something on the sale that has become increasingly controversial. Officials say the CBI inquiry began before the government auditors report came out last month.
The issue has resulted in a deadlock in the parliament the since 21 August, and the ongoing session is due to end on 8 September. At the heart of the CBI's investigation is the allegation that some of the companies were set up only to obtain the coalfields being allocated by the government and then sell them off at profit. Media reports allege that the companies involved misrepresented their ability to mine the coal.
Over the weekend, the BJP said it would allow the parliament to function if the government cancelled the sales of 142 coal blocks and ordered a probe. The auditors report said that of the 86 coal blocks, which were to produce coal by 2010-11, "only 28 blocks (including 15 allocated to the private sector) started production as of 31 March 2011".
However, the government has not relented to those demands and has said that it is looking into the matter. But correspondents say the timing of the raids suggests the beleaguered government is eager to be seen to be doing something about an increasingly controversial sale.
Over the weekend the BJP - which has dubbed the controversy "coalgate" - said it would only allow parliament to function if the government cancelled the sales of 142 coal blocks and ordered a probe.
But the government has not relented to those demands and has said that it is looking into the matter.
"The demand for cancellation of all 142 coal blocks... is not founded on sound logic... It [cancellation] cannot be done through diktat or arbitrary orders," Finance Minister P Chidambaram said on Monday."The demand for cancellation of all 142 coal blocks... is not founded on sound logic... It [cancellation] cannot be done through diktat or arbitrary orders," Finance Minister P Chidambaram said on Monday.
"There is a procedure for it and that procedure is underway," he said. "There is a procedure for it and that procedure is under way," he said.
The sale of coalfields has been dubbed "Coalgate" by the opposition.
India is one of the largest producers of coal in the world.India is one of the largest producers of coal in the world.
The auditors' report on the sale of coal is the latest in a series of financial scandals to hit the Congress-led government, and the revelations have caused public anger.The auditors' report on the sale of coal is the latest in a series of financial scandals to hit the Congress-led government, and the revelations have caused public anger.