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CBI to investigate JSW Steel amidst allegations of bribery, corruption and illegal mining

The Central Empowered Committee report has mentioned JSW Steel as one of the beneficiaries of the illegal mining scam in Karnataka, which was headed by former chief minister BS Yeddyurappa. It also reported poor quarterly results

JSW Steel, which is part of the JSW Group promoted by the Jindals and led by Sajjan Jindal, has been named in the Central Empowered Committee (CEC) report for obtaining "undue favours" from the scam-tainted BS Yeddyurappa government. The Supreme Court accepted the recommendations of the CEC vide the latter's report dated 20 April 2012, and has ordered the Central Bureau of Investigation (CBI) to probe the irregularities into the illegal mining of iron ore in Karnataka.

A Press Trust of India (PTI) release said, "In its report, the CEC had recommended CBI probe considering the 'massive illegalities and illegal mining' found in Karnataka and allegations against the Jindal Group as being 'recipient of large quantities' of illegally mined material and undue favour being shown to them."

The company issued a strong denial. According to the filing with the Bombay Stock Exchange (BSE), it said, "it has not done any illegal mining nor is it connected with any wrong doing. It has full faith in the judicial process and its books are open and it will fully cooperate with the investigating agencies." However, despite the denial, its reputation hangs on a thin thread as the CEC's observations seem to be very serious.

The CEC report further said, "the Prerana Education Society set up by the close relatives of the then chief minister, Karnataka had, during March 2010 received donations of Rs10 crore from South West Mining, a Jindal Group company, despite its own profit for 2009-10 being only Rs5.73 crore."

In the meantime, the company has posted lower net profit of Rs752.18 crore, for the quarter ended 31 March 2012, which is 9.67% lower than Rs832.66 crore for the corresponding period last year. Total Income has increased from Rs7,164.24 crore to Rs9,593 crore, an increase of 33% y-o-y, for the three-month period ended 31 March 2012.

For the fiscal 2011-12, the company posted a net profit of Rs1,625.86 crore compared to Rs2,010.67 crore for the year ended 31 March 2011. Total Income has increased from Rs23,601.62 crore for the year ended 31 March 2011 to Rs32,301.96 crore for the year ended 31 March 2012.

The market hasn't taken kindly to the news. Its stock price has tanked over 14% since 8 May 2012.

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COMMENTS

Aban

5 years ago

What is new in this? Which co. is not resorting to this?

Natabar Dey

5 years ago

I am afraid, this will remain a non starter for obvious political compulsions!

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