Coal scam: India Inc backs Birla

The CII said industry would like to see that the investor and the business community do not get the wrong signal on such matters

A shocked corporate India on Wednesday backed Kumar Mangalam Birla (pictured below), chairman of the Aditya Birla Group, who was summoned by the trial court as an accused in the coal block allocation case, with former Prime Minister Manmohan Singh.

Corporate leaders said Birla only made representations to the PM for allocation of coal blocks.

“Almost all promoters and CEOs make representations to the government to further their business case.

"Just by meeting the PM and by writing a letter to allot a mine, Birla has not done anything wrong.

"All of us meet ministers to further our legitimate business interests,” said Maruti Chairman R C Bhargava.

“As long as there is no corruption or quid pro quo involved, it’s unfair to target Birla.”

Harsh Mariwala, chairman of Marico, said he held both Birla and Singh in high esteem but at a general level, a court of law should decide matters such as these.

“Of course, if cases are filed for the sake of harassment, that is a separate chapter.

"But at a general level, the rule of law must abide. I don’t think cases like these will have any impact on the image of the country,” he said.

“With utmost respect to the judicial process, I do believe the signalling effect of this development is quite negative for business sentiment, as well as bureaucratic courage in taking normal decisions.

"At this time, when India is reviving business confidence, this goes in the opposite direction,” said Cyril Shroff, managing partner, Amarchand & Mangaldas & Suresh A Shroff & Co.

The Confederation of Indian Industry said the court was absolutely within its rights to proceed on a legal course but industry would like to see that the investor and the business community at large do not get the wrong signal on such matters and the way these are handled.

“Such judicial orders create uncertainty and anxiety in the minds of investors and dissuade businesses from investing in the country and take forward the 'Make in India' initiative.

"Companies such as Hindalco have already made significant investments in the project and are now facing an uncertain future.

"This raises the transaction cost of business and would dissuade companies from contemplating investments.

"CII looks forward to a transparent and conducive environment for doing business, which would reduce the scope for discretionary action,” it stated.

“It is our belief that Birla represents the progressive face of Indian industry, which does not indulge in crony capitalism and carries out his businesses by the book.

"Reputations of institutions and individuals take years to build and can be easily destroyed by actions if they are not well thought through,” added CII.

On the underlying issue of allocation of natural resources, the chamber said no single method could apply to all natural resources in pricing and allocation.

However, every effort must be made to ensure the process followed ensures against human discretion, even while ensuring national interests are given supremacy.