While Congress leader and MP Naveen Jindal had so far maintained distance from the coalgate scam, the CBI seems to think otherwise. The investigation agency had filed an FIR against Jindal and is conducting searches at 19 locations of JSPL in Delhi and Hyderabad. Does this signal changed equations in the Congress?

Jindal Steel & Power (JSPL) shares on Tuesday tumbled as much as by 24% in morning trade following a first information report (FIR) and subsequent searches at the 19 places related with the company by the Central Bureau of Investigation (CBI).

At 12.35pm, JSPL shares were trading 18% down at Rs219 on the BSE, while the 30-share benchmark index was 1.2% down at 19,212. Earlier, it touched an intra-day low of Rs202, which was 24% down than its closing price on Monday.

The CBI, which is investigation the coalgate scam, registered an FIR against JSPL and its chairman Naveen Jindal, who is also a member of Parliament (MP) from Congress party. In the FIR, the CBI has alleged that both the company and the MP misrepresented crucial information for receiving valuable coalfields from the government.

The filing of FIR and investigations against the MP from Kurukshetra and his company signal changed equations in the Congress party as Naveen Jindal was supposed to be close with party president Sonia Gandhi and its general secretary Rahul Gandhi. The two-time MP from Haryana is part of the “youth brigade” in the Lok Sabha.

The FIR against JSPL, part of the $17 billion diversified OP Jindal group, also mentions cheating and conspiracy as charges. The investigation agency had also named Dasari Narayan Rao, the former minister of state for coal, as an accused in the coalgate scam.

Besides, the MP and former minister, the CBI has named JSPL, Gagan Sponge and two other companies in the Coalgate scam case.

The CBI is carrying out searches at 19 places in Delhi and Hyderabad in connection with coalgate scam.

Revelations in September 2012 showed the involvement of Naveen Jindal and his company in the Coalgate scam. His company gained by making and selling power at high prices. The coal blocks allotted to Jindal Power (JPL) in 1998, during the NDA regime, were followed by a slew of allocations under the UPA, which have culminated in making the Jindal Group the largest beneficiary of coal block allocations. It has reserves of 2,580 million tonnes of coal, while the second largest beneficiary in the private sector has just 1,500 million tonnes. But despite having the cheapest coal, Jindal sold power at the highest prices—Rs3.85 per unit in 2011-2012, compared to Lanco’s Rs3.67 and NTPC's Rs2.20. The previous year, JPL had sold power at an even higher rate of Rs4.30 per unit. The combination of cheap coal and high power prices explains why Jindal posted Rs1,765 crore as profit, or 60% of its revenues, while Lanco made a profit of just Rs155 crore, just 12% of its revenues.

Last month, taking a strong stand against CBI for allowing interference in the coalgate scam report, the Supreme Court had called the investigating agency as “a caged parrot speaking in its master’s voice”.

The apex court also slammed Attorney General GE Vahanvati, former Additional Solicitor General Harin Raval and officials from the Prime Minister’s Office (PMO) and the coal ministry. “How on earth could the joint secretaries of the PMO and the coal ministry attend the meeting, see the report and suggest changes to it,” the court asked.

Earlier, in a nine-page affidavit submitted before the apex court, CBI director Ranjit Sinha admitted making changes in the ‘coalgate’ draft report on suggestions from Ashwani Kumar and the AG, but stated that it has neither altered the report nor shifted the focus of inquiries in any manner. “...heart of the CBI report was changed on the suggestions of government officials,” the court said.

In its nine-page affidavit, the CBI chief had given details of the meetings between the officials of the agency, the law minister, AG, then additional solicitor general Harin Raval and officials of the PMO and the coal ministry.

Last year in October, Jindal, the MP, had filed an FIR against Subhash Chandra, chairman of the Zee group, Punit Goenka, managing director of Zee, Sameer Ahluwalia and Sudhir Chaudhary, both editors and business heads of Zee Business channel. In the FIR, Jindal had said that Ahluwalia and Chaudhary demanded “certain advertisement commitments” worth several crores of rupees (Rs100 crore, according to media reports) for not broadcasting a story about the Jindal group's alleged involvement in the coal block allocations.

The Zee group, however, denied the allegations made by Jindal. According to news reports, Punit Goenka, managing director and chief executive, Zee Entertainment Enterprises had said, “This kind of allegation has happened in the past and may happen in the future. It doesn’t make any difference to us and we will stick to the truth. These are all pressure tactics.”  Read: Zee News-Naveen Jindal episode: Real face of media exposed?

Earlier, Jindal instigated an initiative that led to a revision of the Flag Code of India which now grants every Indian citizen the right to fly the Flag of India (also known as the ‘Tiranga’) publicly with dignity and honour on all days of the year.