Coal scam: ED attaches Rs 32 cr worth assets of MP-based firm

The Enforcement Directorate (ED) has attached assets worth over Rs 32 crore of a Madhya Pradesh-based firm in connection with its probe in the coal blocks allocation scam.

The central probe agency issued a provisional order, under relevant sections of the Prevention of Money Laundering Act (PMLA), attaching bank balances and immovable assets like land, machinery and power plant of the company -- Ms Kamal Sponge and Steel Power Limited (KSSPL)- located in Sagma village of the Satna district of the state.

The firm, along with another company Ms Rewti Cements Private Limited, was allocated the Thesgora-B/Rudrapuri coal block in Madhya Pradesh in November 2008 by the coal ministry.

"The KSSPL while submitting application of allotment of coal block had mis-represented their net worth and production capacity in order to embellish its claim for the purpose of favorable recommendation for allocation of coal block," the ED said in a statement.

It said the Supreme Court in its judgement on August 25, 2014 had ordered cancellation of allotment of coal blocks including that to the KSSPL.

The ED said the company received very high premium on the sale of its shares "only because company had very high probability of getting coal block after misrepresenting the net worth and production capacity, which were relevant criteria for allocation of coal block".

"During the year 2007-08 to 2009-10 the company had issued shares at the premium of Rs 900 per share whereas the trend of earning per share was not only insignificant but also decreasing.

"Thus, the company has gained pecuniary undue benefit of Rs 32,17,50,000 as share application money and share premium which is the part of the proceeds of crime derived as a result of criminal activity relating to the schedule offence," it said.

The ED had registered a PMLA case against the firm and its Director Pawan Kumar Ahluwalia, based on a CBI FIR.

(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)