Coal Scam: Hindalco Drops Over 7% as Court Rejects Closure Report

Hindalco shares dropped over 7 per cent on Tuesday after a Delhi court ordered the CBI to further investigate a 2005 coal block allocation involving the company.

The court rejected the CBI's closure report in the allotment of a coal block to Hindalco, which is controlled by billionaire Kumar Mangalam Birla. The investigating agency has been asked to file a status report on January 27. (Read the full story here)

Earlier, the agency had closed a case against Mr Birla that was part of the scandal dubbed "Coal-Gate" which exploded in 2012 after the state auditor alleged Rs 1.86 lakh crore had been lost because mining licenses had not been allotted through a transparent bidding process.

The CBI had filed the case against Mr Birla and former Coal Secretary PC Parakh in relation to a block allocated in 2005 to Hindalco Industries, part of the $40 billion Aditya Birla Group led by Mr Birla.

The agency said that Mr Parakh had overruled a government committee to assign the block to Mr Birla after he met with the entrepreneur. Mr Parakh has denied any wrongdoing and said Mr Birla presented a strong case for the coal blocks to be given to his firm, which had been the first applicant for them.

In August, the Supreme Court ruled that all coal blocks allocated by successive governments since 1993 are illegal.

Hindalco traded 6.30 per cent lower at Rs 143.55 as of 2.40 p.m. The stock underperformed the broader Nifty, which traded 2 per cent lower.