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Jindal’s Business Matrix
For the last two-and-a-half months, Naveen Jindal has been hitting the road on the dot at 8 am everyday in his Toyota Land Cruiser. The two-time Congress MP from Haryana’s Kurukshetra and owner of the Rs 21,000-crore Jindal Steel and Power Ltd (jspl) slips into khadi to meet voters (20 villages on an average every day) in his quest for a third term from the seat he’s held for a decade for the Congress. An old Haryana watcher says Jindal should easily win this battle—apparently wedding gifts of Rs 50,000 are the norm in his constituency—and adds a bit tartly that even if he were to lose, friends in other parties will ensure the 44-year-old businessman-politician’s “well-being”.
At a time when attacks on crony capitalism and big business—from Ambani to Adani—have become de rigueur in this election, it is intriguing that Jindal’s name has not been invoked. After all, the card-carrying member of the ‘Young Turk’ club has been in the heart of the Coalgate scandal, where private companies leveraged political and bureaucratic connections to corner lucrative coal blocks for captive use. Four of jspl’s blocks are under scrutiny and the firm has been named in one of cbi’s chargesheets as a beneficiary of the scam. While the CBI case is in “suspended animation” currently, eyebrows have been raised as to why aap and the BJP are not making a song-and-dance of this. Particularly as Jindal is such a juicy target.
“Rules and policies seem to have no relevance for Jindal, he pushes ahead whether clearances have been obtained or not.”
The steel and power magnate has not been a minister in the UPA government. But clearly for a man with declared personal assets of Rs 216 crore, Jindal’s company has gained enormously under the UPA regimes. Between ’04 and ’13, JSPL’s revenues grew 16 times and net profit climbed 10 times. “JSPL has grown faster than its peers, led by expansion in both steel and power,” says Tarang Bhanushali, avp research, Indiainfoline.
Part of this, of course, has to do with JSPL’s smart use of capital and how it is structured. Says Sanjay Jain, senior V-P with Motilal Oswal Securities: “JSPL has strong cash flows from integrated steel operations with captive iron ore and coal mines. Similarly, power generation with captive coal mines has helped JSPL’s growth.” But make no mistake, the clinching factor is Jindal himself: in a regulated industry, he is known to be a smart operator who can achieve objectives at any cost; he remains assertive with bureaucrats and politicians to ensure things go his way. Corporate sources say Jindal controls his business empire with an iron hand, taking all key decisions and directly dealing with the powers that be.
And Jindal is used to having things his own way, be it in politics or business. He uses money power and political clout even if it means flouting the rules, say activists and even some among the bureaucracy. “Jindal’s record is that whatever the law is, whatever the policy is, he will do things his own way, to achieve his own goals,” says lawyer Sudiep Shrivastava, who’s based in Bilaspur, Chhattisgarh, and has been crusading against the allocation of coal mines to companies like JSPL in Raigarh. There have been allegations of Jindal pushing ahead with his projects even without obtaining full clearances, especially environmental clearances. Of course, thanks to his handling of the bureaucracy and politicians, those clearances always followed through later.
“Rules and policies seem to have no relevance for him as he is known to push ahead irrespective of whether necessary clearances have been obtained,” says E.A.S. Sarma, former bureaucrat-turned- activist, who wrote to the PM when forest guidelines were violated by JSPL in Orissa. JSPL’s lease to mine bauxite within the Araku valley in Visakhapatnam district of Andhra Pradesh was also questioned by Sarma as it fell in the protected tribal area (like the Niyamgiri case Vedanta lost). Union tribal welfare minister K.C. Deo subsequently cancelled the lease. An alumina refinery project in water-scarce Vizianagaram district of Andhra Pradesh is also in a limbo due to a court case and local protests.
The fact that Jindal has bagged as many as 14 coal mining leases with capacity far in excess of captive use speaks volumes about the political clout he seems to enjoy across states and political divides. His ways have invited legal suits by activists as well as protests and complaints across his projects. In an e-mailed response to Outlook, a company spokesperson refuted all allegations and wrote that it was fully cooperating with the continuing CBI inquiry on the Coalgate matter.
“Jindal’s record is that whatever the law is, whatever the policy is, he’ll do things his own way to achieve his goals.”
A former secretary of the environment ministry points out that at the time when Naveen Jindal ran afoul of the ministry over the Raigarh power plant, Anil Agarwal of Vedanta was also facing problems over clearance for bauxite mining in the Niyamgiri forests. While Agarwal opted for the legal route (he lost the case), Jindal managed to get the matters sorted within months using his political access to work his way through the system. “Naveen Jindal would turn up personally with a bevy of people after every violation. He is able to sweet-talk his way as he does his homework,” says the ex-bureaucrat, adding, “because of his public persona, he likes to err on the side of the angels.”
Jindal’s main project in Chhattisgarh’s Raigarh, where his JSPL’s sponge iron and power plants are located, has been at the centre of many allegations where, many activists allege, he received blind favours from the ruling party in the allotment of coal mines. These coal blocks, they say, had deposits way beyond the company’s stated needs and enabled the group to sell surplus coal on commercial terms. Says Sudiep, “The group’s meteoric rise in the last 10-15 years is because natural resources were given free to them... the law was misused and overlooked for their benefit.”
JSPL, he says, was initially offered coalfields in Hasdeo Arand, a dense forest area around 200 km away from their plant in Raigarh. This was changed and the company was given coal blocks in the Gare Palma area which is in the vicinity, is less forested and has rich deposits. Above all, Shrivastava says, most of the coal mines here were open pits where up to 90 per cent of the deposit could be mined unlike underground mines where the yield is often lower. Thus, he argues, as against a stated volume of 27 million tonnes of coal for its own needs over 30 years, JSPL was allotted 123 million tonnes in Gare Palma coalfields. The company, of course, denies the allegation.
Similarly, in 2009, JSPL had also run afoul of the environment ministry, which had asked the Chhattisgarh government to revoke the clearance given to its power plant in Raigarh after the company was found to have doubled the capacity of the project without approval and over issues regarding land use optimisation. The company was later given environmental clearances for a 2,400 MW thermal power plant. In 2010, there was also an official inquiry in Chhattisgarh on whether corporates were buying farmland for industrial purposes. Some of the plots identified had JSPL’s name as owner.
“When you have a system that is discretionary, then it gets misused, which is why I had sought a system of auction.”
Of late, though, towards the end of the UPA regime, more hurdles have started coming up. For instance, in Orissa, where Jindal is setting up a 6 million tonne per annum integrated steel plant and a captive power plant at Angul (it’s yet to get mining and other clearances from the state government), the state of discontent has been rising. Activists say the displaced people (over 1 lakh) are getting restless in the absence of permanent jobs, skill development training and compensatory allowance. The company maintains that it has all the statutory clearances.
There are also allegations about Jindal’s attempts to acquire the Northeast-based TV company, Positiv Television Limited, which ran six channels including NE TV, Focus TV, Hamaar TV and HyTV for Hyderabad. Positiv Television promoter Manoranjana Sinh alleges that Jindal has gained control over her company even though she holds 50 per cent equity. Says Sinh, “I had informed Naveen Jindal that there was a Company Law Board status quo on the company and it could not be sold nor could finance be raised for it. But he went ahead.” Sinh alleges that Focus TV, a women’s channel in the Northeast, has been renamed Focus Haryana and many other channels, which she says were profit-making, have been closed down. JSPL denies that Positiv TV is controlled by it or Jindal.
While most Haryana-based politicians chose not to speak out directly about Jindal in “election season”, Krishan Bir Chaudhary, president, Bharatiya Krishak Samaj, has no such qualms: “He (Jindal) has only a one-point programme—money. He is in politics due to money and buys everything with money, whether coal mines, Focus TV or the political and bureaucratic system.”
But then, Jindal is no stranger to controversies. In early 2013, he was in the news for launching a wristband with healing powers—the ‘Tiranga Band’—through his Flag Foundation. Jindal’s move to associate the national flag with a magic cure product had stirred up many people at that time. Then, in 2012, Jindal got into a spat with Zee TV over demands for bribes. Two editors from the TV channel were arrested. Last month, Jindal sent a strongly worded letter to the chief election commissioner complaining against the channel’s coverage.
Last week, the Delhi HC got back. They rejected Jindal’s plea on issuing a restraint order against the channel from telecasting programmes on him and his company and asked him to “ignore inaccurate reporting”. It’s just a bump in the road really, Jindal has converted the business of politics into a fine art form.