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Madhu Koda's conviction and the multi-crore 'coal-gate' scam, explained

By Priyale Chandra

Former Jharkhand Chief Minister Madhu Koda was found guilty of corruption charges on Wednesday, December 13, by a special court. Koda, along with former Coal Secretary HC Gupta, will be sentenced on Saturday in the multi-crore coal block allocation scam known as 'coal-gate'. This brings the scandal back to the foreground and threatens to cause further damage to the reputation of the Congress party.

What is the case against Madhu Koda?

Madhu Koda stands accused of irregularities in allocating coal and mining blocks in Jharkhand during his tenure as Chief Minister. The Central Bureau of Investigations (CBI) and Enforcement Directorate (ED) allege that he took bribes for the allocation of coal blocks to companies. Investigative agencies say that in total Koda and his associates collected about 4,000 crores through such illegal allocations.

The company accused in the mining case is Kolkata-based firm Vini Iron and Steel Udyog Ltd. Koda is believed to have used his influence as Chief Minister to have the Rajhara North coal block allocated to the company despite it not being favoured by the Jharkhand government and Union steel ministry. Along with him, the court also found former coal secretary HC Gupta, former chief secretary of Jharkhand AK Basu and private firm Vini guilty. Koda's conviction marks another milestone in the coal allocation scam.

How did the coal scam happen?

In 2012, the Comptroller and Auditor General (CAG) of India reported that the Indian government had inefficiently allocated coal blocks between 2004-2009. The improper allocation was reported to have caused a loss to the exchequer of 1.86 lakh crores. The report caused a stand-off between the ruling United Progressive Alliance (UPA) and the opposition led by the Bharatiya Janata Party (BJP).

The BJP alleged that the ruling party was guilty of corruption and demanded the resignation of the then Prime Minister, Manmohan Singh. In 2013, a Parliamentary Standing Committee tabled a report which said that all the coal blocks that were allocated between 1993-2008 were improper. In 2014, the Supreme Court set up a special CBI court to try cases relating to the coal scam. Following the CAG report, the coal block allocations were cancelled. In the same year, the Lok Sabha passed a bill re-allocating the blocks.

The ruling UPA party suffered a loss of credibility due to the scam and the corruption allegations became an important issue for the BJP in the 2014 general elections. The BJP projected the Congress party as one riddled with scams, a reputation that still tarnishes the party's reputation.

Why does the scam still matter?

Madhu Koda is the highest politician to be convicted in connection to the scam. His sentencing by the court will add to the veracity of the charges of corruption that were levelled against the Congress by its opponents. Moreover, Koda is also accused of allegedly favouring the Jindal group of firms in the allocation of the Amarkonda Murgadangal coal block. Union Railway minister Piyush Goyal stated that the verdict proves the UPA's culpability in the scam.

Madhu Koda's case marks another milestone in the coal scam case. The cases have dragged in the names of many high ranking UPA members, including the former Prime Minister himself. As the trials proceed, the chance of top Congress leaders being summoned continue to mount, as do the party's efforts to reestablish its credibility.

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Disclaimer: This story is auto-aggregated by a computer program and has not been created or edited by Dailyhunt. Publisher: The Indian Economist