Vedanta facing triple whammy over fraud
Published by MAC on 2009-03-03Once again, a spokesperson for Vedanta Resources plc, the much-reviled UK mining company, has boasted that the company is on track to become the world's biggest aluminium producer..
This is not a new claim and seems designed, both to reassure flagging investors, and pressure the Indian government to quell opposition to Vedanta's vital Nyamgiri bauxite mine project in Orissa, currently stalled by a peoples' blockade.
The company claims that it is losing half a crore rupees (just under 100 million US dollars) "every day" due to the delays.
But this is perhaps of less concernt than the distinct air of corruption that has recently descended on Vedanta and its board.
Vedanta's executive chairman, Anil Agarwal, and other officers of the company, are facing indictment for allegedly cashing a 12 billion dollar bank guarentee, provided for construction of an aluminium township.
The company is having problems over the proposed amalgamation of its 51%-owned Sesa Goa Ltd - India's biggest iron ore exporter - with a subsidiary company of Sesa Goa, now also being accused of fraud.
Then, at the end of last week, SK Tamotia , who's been a non-executive director of Vedanta since 2004, was sentenced to three years in jail for illegal possession of funds.
Police slap case against Vedanta
Times of India
28th Feburary 2009
HYDERABAD: The police have registered a case against the chairman of the Vedanta Aluminium Limited for allegedly duping Maytas Infra Limited to the tune of Rs 64 crores.
Responding to a private complaint by Y Tagore, deputy general manager of Maytas Infra Limited, the XIV additional chief metropolitan magistrate, here,had directed the Punjagutta police on Tuesday to register a case against Vedanta Aluminium Limited.
According to Punjagutta SI [Superintendent of Police] , Ravinder Reddy, in the year 2007, Vedanta Aluminium Limited, Mumbai, entered into a Memorandum of Understanding (MoU) with the Maytas Infra Limited over a Rs 232 crore township construction work in Jharsuguda of Orissa.
"As a part of the deal, Maytas Infra management furnished Rs 64 crore worth bank guarantees issued by ICICI Bank to Vedanta Aluminium Limited. Now they allege that, Vedanta has illegally encashed the Rs 64 crore bank guarantee," Ravinder Reddy said.
Acting on the direction from the court, Punjagutta police registered a case under sections 403, 406 and 420 of the IPC against - Anil Agarwal, chairman, Navin Agarwal, vice-chairman, and seven others of Vedanta Aluminium Limited. The police have launched an investigation into the case.
Vedanta lines up Rs 60,000cr investment by 2013
Dillip Satapathy / Kolkata/ Bhubaneswar
Business Standard (India)
26th February 2009
The Anil Agarwal promoted Vedanta Aluminium (VAL) plans to invest a whopping Rs 60,000 crore in aluminium, alumina and power sector in Orissa by 2013.
The company has recently completed the construction of a one million tonne alumina refinery at Lanjigarh in Kalahandi district and is currently engaged in establishing a 0.5 million tonne aluminium smelter and 1215 Mw captive power plant (CPP) at Jharsuguda.
It has already invested about Rs 25,000 crore in these two projects and intends to make additional Rs 35,000 crore investment to scale up the operation of both the units over next four years.
The investment plan of the company is in tune with its aim to have 2.6 million tonne aluminium capacity under its belt by 2013. Of this envisaged capacity, the Jharsuguda unit is expected to contribute 1.6 million tonne while the rest one million tonne will come from Korba plant of the company.
Similarly, the CPP capacity at Jharsuguda is projected to be ramped up to 3,600 Mw while the capacity of the alumina smelter at Lanjigarh will be expanded from one million tonne to 5 million tonne by this time.
The new investments also include setting up of a 2400 Mw independent power plant also at Jharsuguda.
"Once this is done, the Jharsuguda plant will be the world's largest single location smelter with a capacity to produce 1.6 million tonne of aluminium", says P.K. Panda, vice-president, Mines, Vedanta Aluminium. Dubal in United Arab Emirates is currently the world's single largest site aluminium smelter with installed capacity of 0.9 million tonnes.
At Jharsuguda, the company is nearing completion of the first phase of the smelter project comprising 2,50,000 tonnes of aluminium capacity. Of 288 pots to be installed in the first phase 216 pots have been commissioned and the balance will go on stream by June this year. Similarly, out of 675 Mw of captive power required in the first phase, 540 Mw (4X135 Mw) capacity has been commissioned.
Though the construction of the company's one million tonne alumina refinery at Lanjigarh is complete since October, 2007, the company is currently operating only one stream of refining process, out of two streams installed there, due to problems in sourcing bauxite. "We are operating at 50 per cent of capacity at Lanjigarh, producing 60,000 tonne of alumina per month, pending operation of captive bauxite mines in Niyamgiri Hills nearby", Panda added.
To keep the unit running, the company is procuring bauxite from all over the country and in the process, incurs a loss of half a crore of rupees every day on present scale of operation. The mining in Niyamgiri had run into rough weather with litigation over forest, environment and tribal issues. However, with the Supreme Court recently clearing the mining project, the company expects to start bauxite mining in joint venture with Orissa Mining Corporation.
HC sets aside Sesa Goa merger
Times of India
27th February 2009
PANAJI: A division Bench of the Bombay high court at Goa set aside a single Bench judgment that sanctioned the scheme of amalgamation of Sesa Industries Limited (SIL) with Sesa Goa Limited (SGL).
The order comes in wake of an appeal filed by Krishna Bajaj, a shareholder of the company (SIL), against the single Bench order passed on December 18, 2008.
The appellant pointed out that SIL had suppressed the fact that an investigation was being carried out against it. It also suppressed the fact that there was an adverse report against it while obtaining the sanction. It was also submitted that after amalgamation the company (SIL) would be dissolved and no action against it would be maintainable.
SIL's counsel J J Bhat on the other hand said that when most of the shareholders had approved the scheme, it cannot be said that the company had defrauded and suppressed facts from the shareholders. A division Bench comprising Justice P B Majmudar and Justice C L Pangarkar held, "We are of the opinion that the scheme in question cannot be sanctioned by this court as it is in violation of mandatory provision of Section 394 of the Companies Act."
Former NALCO chief jailed for three years in graft case
Times of India
27th February 2009
BHUBANESWAR - A court in Orissa Thursday sentenced a former chief of state-owned National Aluminium Company Ltd (NALCO) to three years in jail in a graft case, his lawyer said.
The court of special Central Bureau of Investigation (CBI) judge at Bhubaneswar sentenced S.K. Tamotia on the charge of possessing disproportionate assets worth Rs.900,000), his lawyer Nirmal Patnaik told IANS.
Tamotia held numerous positions at NALCO from 1984 until 1996, including as its chairman and managing director.
After resigning from NALCO, Tamotia also held key positions in many premier organisations and companies in the country including Hindustan Aluminium Company Ltd (Hindalco) and Vedanta.
The CBI had raided his house soon after he left NALCO in 1996 and filed a charge sheet against him three years later in the CBI court, the lawyer said.
‘The judge Srikanta Nayak held Tamotia guilty and sentenced him to three years imprisonment. He also fined him Rs.50,000,' Patnaik said, adding that they will appeal the judgement in the high court.