LAST DIWALI, Giriraj Sharma, the resident editor of Patrika in Raipur, received two awkwardly big gift boxes from Chhattisgarh Chief Minister Raman Singh’s office. Upon opening the boxes, Sharma told TEHELKA, he found one packed with dry fruits, while the other had three compartments — one had a high-resolution video camera, the second had 51 crisp notes of Rs 1,000 denomination and the third had a miniature throne made of gold.
Raman Singh has been occupying the chief minister’s throne since 2003. The extravagant gift was meant not just to indulge the journalist but also to convey an offer that if he wished, he could have a share of the spoils of power. Sharma returned the gift with a note of thanks. More importantly, Patrika continued to hold a mirror to the state BJP government, highlighting the abuse of power and the nexus between the government and big money.
Raman Singh retaliated by withdrawing all government advertisements to the newspaper. Patrika was barred from covering Assembly proceedings, its office was attacked by a mob of BJP workers, its reporters are almost never entertained by the ministers and bureaucracy for any information and the editor is never extended an invitation to an event presided over by the CM.
The witch-hunt didn’t end at that. The CM personally wrote a two-page note, terminating the services of the wife of Patrika’s state bureau chief — she was a Class III employee — on bogus charges. The file shows that the termination proceedings were initiated at the CM’s behest. It is unheard of that a CM takes personal interest in the service matters of a clerical employee and personally sees to it that the person is terminated. The Patrika Group has filed a writ petition against the state government in the Supreme Court, claiming a violation of its fundamental rights like freedom of speech and equality before the law.
Incredibly, in a state with 23 daily newspapers and more than a dozen news channels, the two-year-old Patrika’s Raipur edition happens to be among a handful of media organisations that have maintained objectivity in their reportage. Government ads constitute the single biggest source of revenue for the newspapers and news channels operating in the state. The Department of Public Relations’ annual budget is roughly Rs 40 crore. It is not surprising then that the CM has kept the charge of public relations with him since 2003.
Friends With Benefits
1. PRAKASH INDUSTRIES is promoted by Ved Prakash Agarwal, the brother of Jai Prakash Agarwal. JP Agarwal runs the Surya Foundation, a BJP-backed NGO that conducts poll surveys on behalf of the party. For instance, one of the surveys it carried out for the BJP was before the 2012 Uttar Pradesh Assembly election and the inputs helped the BJP formulate its poll plan. On the recommendation of the Chhattisgarh government, the coal ministry allocated as many as four coal blocks with more than 100 million tonnes of highgrade reserves to the company. It was raided by the CBI in 2010 on charges of mining excess coal and selling it in the black market. It is also facing charges of forgery and bribing officials. The company was in the process of getting two more coal blocks when the CBI raids took place. Though the coal ministry didn’t allocate the two blocks as recommended by the Raman Singh government, the four blocks that have already been allotted are yet to be cancelled.
2. A JOINT-VENTURE company in which BJP Rajya Sabha MP Ajay Sancheti holds 24.99 percent stake has been awarded two coal blocks — Bhatgaon II and Bhatgaon Extension — with 80 million tonnes of coal reserve. The JV stands to make an undue gain of more than Rs 25,000 crore over the next 32 years, which is the lease period. Sancheti is considered to be close to BJP President Nitin Gadkari. The JV partner Solar Explosives has termed these coal blocks as “treasures” on its company website.
3. THE NAVBHARAT GROUP of Industries is promoted by VK Singh, whose wife Neena Singh contested the 1998 Assembly election on a BJP ticket from Rajim in Chhattisgarh. In 2008, the state government recommended an iron ore block of 220 hectares for one of the group companies named Navbharat Fuse. The company had an existing sponge iron plant, and the recommendation for an iron ore block was made on the promise that it would expand its production capacity. In 2009, the government recommended a coal block worth 36 million tonnes of reserve to another group company named Navbharat Coal Fields Ltd. It is alleged that the company misrepresented facts and its production capacity to justify the recommendation. After getting the block, the company sold 74 percent of its stake for an estimated Rs 300 crore to Solar Explosives, which is at the centre of the Bhatgaon Coal Block scam.
The involvement of many media conglomerates in purely commercial activities, particularly mining and allied business that require political patronage, has further eroded the journalistic independence and objectivity. The promoters of Dainik Bhaskar,the state’s largest circulated daily, have a mining lease for 91.6 million tonnes of coal reserves in Raigarh district. The company was allocated the block by the coal ministry on the Chhattisgarh government’s recommendation. The company has been brazenly using the newspaper to promote its mining business. The group even launched a Raigarh edition around the same time it set up a power plant in the region. On most days, it carries stories of how the power plant and coal extraction would herald prosperity and economic growth for its hitherto backward people. On the other hand, while the paper is almost never critical of the state government or its policies, it has been carrying on a vilification campaign against the villagers who have been agitating against the Dainik Bhaskar (DB) Group’s proposed land acquisition for the purpose of coal mining.
On its part, the government has assisted the DB Group by persecuting the agitators. The university affiliation of Dr BSP Tribal College in Dharamjaigarh, which was at the epicentre of the protest movement, was revoked in April. As a result, dozens of poor tribal students were deprived admission into graduate courses at the college this year. It is the only tribal college in Raigarh district and provides completely free education to tribal students. Dainik Bhaskar simultaneously ran a series of patently false stories against the college and its principal, Dheerendra Maliya, who has been spearheading the agitation.
More than 500 families would lose their houses and another 600 farmers would lose 393 hectares if DB Power goes ahead with the land acquisition. Besides, the area is a part of the elephant corridor. The police have booked me along with other journalists in a bogus case’
NARAYAN BAIN, 36
Edits a small newspaper named Johar Chhattisgarh from Raigarh district
Photos: Vijay Pandey
The police have registered a false FIR against as many as 14 local journalists — all belonging to newspapers other than Dainik Bhaskar — at the behest of DB Group, accusing them of vandalism and trespassing. All these journalists were locals and were reporting about the largescale displacement and the loss of livelihoods that the proposed land acquisition would lead to.
Aryan Coal Beneficiation, which operates a coal washery, a transport company (which is engaged in the business of moving coal) and a 30 MW power plant in the state, ownsHari Bhoomi, the second-largest circulating newspaper. While other newspapers sell for between Rs 2-3, Aryan Group sells Hari Bhoomi for just Rs 1. (On weekends, the daily is sold along with a glossy magazine for Rs 1.50). The newspaper brings out two editions: one from capital Raipur and from Bilaspur, the second largest city in the state.
At one point, the company was accused of pilfering millions of tonnes of high-grade coal from South Eastern Coalfields Ltd, Bilaspur — one of the seven subsidiaries of Coal India Ltd — and then selling it in the market under the guise of coal rejects. It was alleged that the company had made hundreds of crores of rupees from such pilferage. Many inquiries were conducted but they all failed to find any prosecutable evidence. Many believe that the intent behind bringing out the newspaper is to safeguard the company’s multiplying commercial interests in the mining sector and its allied industries.
‘The Dainik Bhaskar Group has been using its newspaper to target me and others associated with the movement. When that failed, the Registrar of Bilaspur University suspended my college’s affiliation. As a result, more than 90 tribal students could not be admitted to graduation courses this academic year’
DHEERENDRA MALIYA, 37
Lecturer on forestry and geography and principal-in-charge of Dr BSP tribal college, Dharamjaigarh, Raigarh
The company’s promoters are close relatives of the late Sahib Singh Verma, who was a Union minister in the NDA regime. The company was formed in 1999 when the NDA was in power and saw an exponential growth while the BJP remained in power at the Centre. In Chhattisgarh, Hari Bhoomi and Dainik Bhaskar, together with a daily circulation of roughly over 4 lakh copies, are derided as Raman Singh’s mouthpieces. As a quid pro quo — one can argue — that the state government had recommended the allotment of a captive coal block to Aryan Coal vide its letter dated 11 September 2007.
But the malevolent nexus between the Chhattisgarh government and leading media houses is just one aspect of this story. The evidence that is going to follow would show that the BJP and Raman Singh are presiding over a deeply corrupt and unconstitutional regime in Chhattisgarh. At least three companies that are directly promoted by BJP leaders have been allocated iron ore or coal blocks in a blatant violation of constitutional provisions and established rules and procedures.
More than 70,000 acres rich in mineral resources, most of which is covered with dense forests, has been given to private companies for the purpose of prospecting minerals. Most of these companies don’t have any proven track record, financial capability or technical expertise in the mining industry.
Under the existing Mines and Minerals Development and Regulation Act, a prospecting licence creates preferential rights over mineral concessions. In a way, the licensee is guaranteed a mining licence if he strikes the minerals in the prospecting area. The Raman Singh government has perverted the rationale behind the prospecting licence policy, which is to attract private investment and state-of-the-art technology in mineral exploration. It has instead granted prospecting licences in areas where the existence of mineral reserves is more or less known. Sham companies were incorporated only to corner prospecting licences or mining leases. That’s why one finds that many companies, after being granted the prospecting licence, sold themselves off to the highest bidder. One such company was promoted by Raman Singh’s old school pal.
In 2004, a year after Raman Singh became chief minister, his schoolmate Suresh Kochhar (records with TEHELKA show that Kochhar and Singh studied in the same class of the same school for six years) floated a company named Maa Bambleshwari Mines and Ispat Ltd. Two days after the company was incorporated, it applied for a prospecting licence for iron ore in over 661.08 hectares in Rajnandgaon, the CM’s constituency. The company had nothing to show in terms of financial or technical expertise. Yet on 11 July 2005, the state government wrote to the Centre recommending the licence. Records with TEHELKA show that the company was chosen over half-a-dozen applicants. A few applicants also had a manufacturing facility while Kocchar’s company existed only on paper. Still others were ignored. For the next five years, the company did nothing. In 2008, the company was sold to Monnet Ispat and Energy for an undisclosed amount.
“Known mineral fields like Bailadila and Aridongri, which were held under mining licence by state PSUs, have been extended by the prospecting licence route to private parties. Similarly, known deposits like Boria Tibbu and Hahaladi in Rajnandgaon and Kanker districts were also extended to private players via the same route. All this has been done on the basis of mere MoUs,” says Sudiep Shrivastava, a Bilaspur-based lawyer, who has filed a PIL in the Supreme Court challenging the rationale behind the dozens of MoUs.
Between January 2004 and 2010, the government signed 108 MoUs for setting up sponge iron, steel, power and other industries that need minerals. A majority of the MoUs have not translated into industries. For instance, the state government awarded a prospecting licence for iron ore over 63 hectares to a dubious company named Akshay Investments Pvt Ltd. The government also recommended a captive coal block for the company, which was granted by the coal ministry’s Screening Committee. More than six years after the allocation, the company has not set up the proposed power and sponge iron plants.
Senior Congress leader and former chief minister Ajit Jogi says the MoUs were signed without any fore-sight, planning or vision. “Janjgir district is one of our smallest districts, but in terms of production of paddy and other crops, it has about 90 percent irrigation. So, it is one of the best areas for agriculture. In that district, the government has signed more than 30-35 MoUs. His civil servants have told me that if all the proposed power plants come up in the district, there would be no water left for irrigation,” says Jogi.
Only 15 MoUs have been cancelled by the government till date for lack of progress. But even in many cases, where the MoUs were cancelled, the government didn’t revoke the prospecting licence.
In 2000, Chhattisgarh was created with the single biggest objective of using its vast reserves of precious minerals for the development of its neglected and backward populace. Today, corruption, nepotism and graft in mining leases are holding the hopes and aspirations of the people, and democracy itself, to ransom. Systematic assaults on the freedom of the press, registration of false cases against people’s movements and persecution of anti-corruption activists all emanate from and run coterminous with the deep-set rot in the mining sector.
Since 2003, besides being the chief minister, Raman Singh is also holding the portfolios of mining, energy, general administration and public relations. Like Prime Minister Manmohan Singh in the case of coal allocation scam, it’s Raman Singh who is directly responsible for blatantly dishonest and corrupt iron ore and coal block allocations. When TEHELKA contacted Raman Singh’s office, it was told that the CM would not respond to the allegations.
NITIN GADKARI’S AIDE AJAY SANCHETI GETS AN UNDUE GAIN OF Rs 25,000 CRORE
Much has been said and reported about how BJP Rajya Sabha MP Ajay Sancheti’s company SMS was awarded a coal block for a pittance by the Chhattisgarh Mineral Development Corporation (CMDC), which comes under the State Mining Department. The Accountant General of Chhattisgarh, who functions under the Comptroller and Auditor General of India, published a report in April, estimating a loss of Rs 1,052 crore to the state exchequer on the basis of a comparative analysis of two adjacent coal blocks in Surguja district — one awarded on the condition that the winning company would pay Rs 552 per metric tonne of the coal extracted, while another block was given for Rs 129.6 per metric tonne.
Both the coal blocks were contiguous and the quality of the coal in the block awarded at low rate was actually superior — Grade A to C, which is highly priced and scarce — to the adjacent block. Still this block was given away at an abnormally low price. The BJP has been screaming from the rooftops that the coal block was given on the basis of competitive bidding. The national media thus far has been under the impression that the loss to the exchequer was just Rs 1,052 crore.
For the first time, TEHELKA has accessed the complete file of the competitive bidding process. The revelations are shocking. The total coal reserve of the two blocks is 80 million tonnes, a substantial portion of which is high-grade coal. Sancheti’s company SMS and Nagpur-based Solar Explosives Ltd (the company is owned by Satyanarayan Nuwal and is under the CBI scanner for buying another coal block in 2005) entered into a joint venture and won the right to mine and sell the coal in the open market from both the blocks for a period of 32 years.
The licence to pillage
CHHATTISGARH CM Raman Singh’s brothers-in-law allegedly got mining leases for 920 hectares rich in iron ore, manganese ore, vanadium and nickel in Sidhi district of Madhya Pradesh. MP is a BJP-ruled state and it’s alleged that Singh used his influence to secure the leases
THE Rs 7,200 crore scam in the Energy Department allegedly happened on Raman Singh’s watch. A PIL alleging massive financial irregularities in the procurement of transformers, cement and iron poles has been admitted by the Chhattisgarh High Court. The government tried to browbeat the petitioner into withdrawing the PIL. When it failed, he alleges, the district officials set his house and workshop on fire
A PROSPECTING LICENCE was granted to Essar Steel for 2,200 hectares of iron ore in Bastar region. The licence was granted without the company having set up a steel plant. It is alleged that rules were twisted to grant Essar the licence
108 MoUs were signed between January 2004 and December 2010 by the government for setting up sponge iron, steel, power and other minerals-based industries. A majority of the MoUs have not translated into industries. Some of the signatories have even sold off their companies
70,000 HECTARES rich in mineral resources, most of which is covered with dense forests, have been given to private companies for the purpose of prospecting minerals. Many of the companies don’t have any proven track record or technical expertise in the mining industry
OVERRULING HIS OWN officials and acting against the express advice of the Advocate General, Raman Singh took the decision to grant 1,136 acres of forestland to Anil Agarwal’s Balco at a throwaway price of Rs 200 per acre. The order was passed in April 2010. A criminal complaint seeking the framing of charges of cheating, forgery and misuse of power against the chief minister has been admitted by the Raipur Sessions Court. It is alleged that the exchequer suffered a loss of more than Rs 100 crore
RAODONGARI IRON ORE block, which was reserved for SAIL’s Bhilai Steel Plant, was allocated to Jayaswal Neco Ltd, the same company against which the CBI has now registered an FIR in the coal allocation scam. In 2008, the allocation was finally cancelled after the then Deputy Leader of House of the Congress Legislative Party, Bhupesh Baghel, led a political agitation for more than three years
IN SEPTEMBER 2012, the Chhattisgarh High Court quashed the land acquisition done by the state government for four power companies. The court called the acquisition a “colourable exercise of power”
1,20,000 metric tonnes of iron ore was illegally extracted from reserved forest land by Chhattisgarh-based businessman Anil Luniya
UNDUE FAVOUR has been shown in the illegal grant of mining lease and its irregular and illegal operations by Luniya, for which the state of Chhattisgarh has to be directly and collectively held responsible,” said the Central Empowered Committee set up by the Supreme Court in its report dated 25 September 2008
A FINE of Rs 6.7 crore was imposed on Luniya’s company by the CEC, which has not been realised by the state government till date
The bidding process was completed in 2008. If Sancheti and his associates extract and sell all the coal today, they would make an undue gain of more than Rs 8,000 crore. But the fact that the coal from these blocks would be extracted and sold over a period of 32 years, the actual profit would be in the range of Rs 20,000-25,000 crore (with coal reserves on the decline, the price is going to rise exponentially in the foreseeable future).
The loss estimated by the auditing body was merely based on a comparative analysis of the different rates quoted for the two adjacent blocks. The fact that everyone, including the auditing body, has missed so far is that both the blocks have been awarded to the JV of Sancheti and his associate Nuwal. And in both blocks, the JV had quoted rates that were a fraction of the real market rates. The fact that Sancheti’s JV quoted an abnormally low rate for the second block — perhaps excessive greed clouded the judgement —has actually given away the scam.
‘I filed a PIL based on the documents I acquired through the RTI Act. The high court heard me out and has issued a notice to the state government. Soon, senior district officials started threatening me and asked me to withdraw the petition. When I refused to be cowed down, my workshop and house were set on fire on 29 May’
SAHAS RAM NAGVANSHI, 38
Has filed a PIL alleging irregularities in the procurement of transformers and iron poles by the state government
The documents in TEHELKA’s possession show that the entire bidding process was manipulated to ensure that Sancheti’s JV got both the blocks.
The CMDC first hired a Nagpur-based consultancy firm called aXYKno Capital Services Ltd. The consultancy firm was hired without any bidding or due diligence. It was this consultancy firm that prepared the bid documents, set technical and financial criterion for the bids, opened and evaluated both the technical and financial bids, awarded the bids and structured the joint venture agreement. The fact that both the successful bidders, the consultancy firm and Sancheti’s political godfather, Nitin Gadkari, are from Nagpur is a curious coincidence.
The file in TEHELKA’s possession shows that SMS submitted dubious documents to qualify for the bid. The consultant conveniently overlooked glaring deficiencies of SMS like the lack of experience in the mining sector and helped it to win the bid. No reserve price was fixed for the bids.
The question that needs to be asked is why did the CMDC need private firms to extract coal from its own mines? Both the blocks are open cast mines and hence required very little cost or technical knowhow for extraction. Why did the CMDC agree to take just 51 percent of the net profit from the total coal mined and sold (or Rs 552 and Rs 129.6 per tonne from the two blocks respectively; if the net profit is higher than these figures, then 51 percent of the net profit), and allow the private companies to pocket 49 percent of the profit?
The CMDC is headed by a BJP leader named Gauri Shankar Agarwal. Speaking to TEHELKA, Agarwal denied charges of favouritism. He claimed the bids were awarded through an open and transparent procedure. TEHELKA sent a questionnaire to both SMS and Solar Explosives but the companies didn’t respond.
RAMAN SINGH GIVES IRON ORE RESERVES WORTH 3,000 CRORE AND COAL BLOCK WORTH 5,000 CRORE TO A FIRM WORTH JUST 2 LAKH
The following passages nail one of the most scandalous decisions made by Raman Singh. His government fudged records, overlooked legal violations and twisted the rules of his own department to grant a mining lease for an area measuring 215 hectares and a prospecting licence for over 705.33 hectares of Hahaladi iron ore deposit in Kanker district. Singh also got a coal block with reserves of 55 million tonnes for the same company in Madhya Pradesh.
On 2 June 2004, brothers Sanjay and Atul Jain, who owned a small shop on Kundewalan Street at Ajmeri Gate, New Delhi, incorporated a company named Pushp Steel and Mining Pvt Ltd. The paid-up capital of the company was just Rs 2.25 lakh. On the same day, Pushp Steel applied for a prospecting licence for iron ore in Chhattisgarh.
On 7 January 2005, the Raman Singh government signed a MoU wherein the company promised a total investment of Rs 380 crore. It beggars one’s imagination how the state could sign a MoU of Rs 380 crore with a firm worth just Rs 2 lakh run by two shopkeepers. The events that followed suggest that it was as per an elaborate conspiracy.
The break-up of the project cost was as following:
• Sponge Iron Plant – Rs 80 crore
• Captive Power Plant – Rs 75 crore
• Compliant parts made out of captive materials – Rs 225 crore
The break-up of the MoU establishes that the major investment component of Rs 225 crore was neither for the sponge iron plant nor for the power plant but for some abstract activity called the manufacturing of low-pollution compliant parts. It was clearly a stratagem to justify the extraordinary grants.
The MoU stated that the project implementation would commence within two years. Around 12 hectares was allotted in Borai Industrial Area, Durg district, for the project. Till date, there has been no work on the project.
By its order dated 5 May 2005, the state government recommended the grant of a mining lease for 215 hectares of Hahaladi iron ore deposit. While the MoU mentioned the proposed annual capacity of the sponge iron plant to be 3,15,000 TPA, the mining lease grant order unilaterally enhanced the annual production capacity to 4,00,000 TPA to justify the grant of a mining lease for a disproportionately large area.
The government also changed the final product from sponge iron (as mentioned in the MoU) to integrated steel as the consumption of iron ore is higher in steel-making and hence justified the recommendation of a huge mining lease. By the same order, the government also recommended the grant of a prospecting licence for a total area measuring 705.33 hectares. The order was issued under the business rules of the state government with the approval of the mining minister who happened to be CM himself.
A competitor, who had applied for a prospecting licence in the same area, later approached the Delhi High Court challenging the government’s arbitrary allocation. The high court cancelled 354 hectares out of 705.33 hectares of prospecting licence. Pushp Steel has filed an appeal before the Division Bench and the order is awaited. But it continues to hold the remaining area of rich iron ore reserves.
Till date, there has been no criminal investigation into the manner in which the grants were given. Congress leader Bhupesh Baghel even wrote to the Governor asking for a case to be registered under the penal provisions of the Prevention of Corruption Act read with relevant sections of the IPC dealing with criminal conspiracy and cheating. But nothing happened. A sham company formed with a capital of Rs 2 lakh continues to hold the precious mineral deposits worth of thousands of crores.
“We are a bona fide deserving company and have an operative end-use plant at Raipur and further expansion is also underway. Our group has been in the business of steel for more than 25 years. The allegations you raise are baseless and absolutely false,” claims Atul Jain, the company director.
The scale of corruption and misgovernance under Raman Singh is bewildering. This when we have not even begun to talk about the sordid saga of fake police encounters, custodial killings, the horror of Salwa Judum and the trampling of civil liberties by the state agencies. We have not even begun to narrate how Singh’s home minister ran a private squad, which went around extorting money from people. How during the nine years of Singh’s rule, the Naxal movement has spread to almost every part of the state. Environmental degradation, illegal felling of trees, pollution of water bodies — all rampant in the state — were not the scope of this story. The story shows the BJP’s double standards on the two biggest issues plaguing our democracy, which are crony capitalism and the loot of natural resources. If the Congress has Naveen Jindal, the BJP has Ajay Sancheti. If the Congress has the Lokmat, the BJP has the Hari Bhoomi. Barring coal, in which both the Centre and the states had their hands in the till, in the case of other mineral resources, the real corruption lies in the states. And from Karnataka to Madhya Pradesh to Chhattisgarh, it’s the BJP that needs to be held accountable for the plunder of precious natural resources.
Ashish Khetan is Editor, Investigations with Tehelka.