Nagpur | Jan 08, 2015: The union ministry of coal has directed the state government to cancel the lease granted to Topworth Group for mines in the Marki-Mangli area of Chandrapur district. The action comes four years after two city-based businessmen hit a jackpot by transferring the coal blocks for a hefty premium to Topworth Group, which is now facing the heat.

Businessmen from Nagpur were perhaps the biggest beneficiaries of the coal mine allotment system during the UPA regime. The grounds on which the cancellation order has been issued too has its roots in the profiteering episode.

There have been three instances here in which mines were sold to other parties by the original allottees, with huge funds changing hands. In this case, local businessmen Shiv Agarwal and Anand Daga got the mines allotted in the name of Sri Virangana company, but later offloaded their entire holding to Topworth Group. Since the mines were allotted in the company's name, the mines were also transferred to Topworth with the shares. Even as these mines stand cancelled after the Supreme Court judgment, all the allottees have been allowed to exploit resources till March 31. Now, Topworth Group will not get this benefit too.

The coal ministry's letter issued on Wednesday says the mining lease was signed for the four mines in Marki-Mangli in March and June 2011. The lease was executed in the name of Sri Virangana Steel Limited but the company had ceased to exist at that time.

By the time the lease deed was executed, the company had changed to Topworth Urja. The name was changed in 2010 while the lease deed was executed in 2011 in the name of Sri Virangana.

The name change was a fallout of the deal that took place between the promoters Sri Virangana and Topworth. Sources say close to Rs 30 crore changed hands in the deal. Since the former got the mines under allocation system, they incurred hardly any cost on it.

The name was changed since the company was taken over by new promoters. When Topworth Group went to get a lease deed done, the ministry of coal raised an objection over the change of name. On this, a lease deed was signed in Sri Virangana's name to avoid troubles. But this company had ceased to exist at that time. CBI, which is already probing this angle, has booked directors of Topworth Group Surendra Lodha and Prakash Nevatia for misrepresenting facts.

However, there has been no action against promoters of Sri Virangana Steel, who profiteered by selling the mines to Topworth, say sources. They added that the promoters of Topworth are planning approach the coal ministry to explain their side of the story. The company has started a steel plant and a captive power plant on the basis of these mines.

(Source: http://timesofindia.indiatimes.com/)