Coal India Hiding the Truth about Reserves from Investors

Greenpeace files complaint with SEBI

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Press release - September 23, 2013
Mumbai, September 23, 2013: Research by Greenpeace has found that the world’s largest coal producer, Coal India Limited, is misleading potential shareholders by concealing the true level of its extractable reserves, as it prepares to sell additional shares to international investors.

According to the analysis “Coal India: Running on Empty?”(1) the company has failed to disclose to stock exchanges an internal assessment that shows its extractable coal reserves are 16% less than stated at the time of its 2010 listing - a violation of Indian stock exchange rules. Coal India continues to claim via its website that it has 21.7 billion tonnes of extractable coal reserves, yet a review of its own internal documents undertaken by Greenpeace and the Institute for Energy Economics and Financial Analysis (IEEFA) has shown that the company has only 18.2 billion tonnes of extractable coal, as per the United Nations reserve classification system (2). At targeted production rates, these reserves could be exhausted in 17 years.

Greenpeace India has filed an official complaint with the Indian Stock Exchange regulator against Coal India for concealing material evidence on the scale of their coal reserves, in contravention of the terms of the Listing Agreement under the Indian Securities Contracts Regulations Act, 1956.

Commenting on the findings, Ashish Fernandes of Greenpeace said: “Coal India is trying to deceive its present and future shareholders by hiding the fact that its extractable reserves are almost a fifth less than it claims. Coal India has a legal duty to tell the truth and they are failing to do that.”  

Supreme Court Advocate Shaunak Kashyap said, “Coal India is in violation of statutory provisions particularly the SEBI Act, the Listing Agreement under the Securities Contracts Regulations Act, 1956, and SEBI’s April 3, 2006 circular relating to disclosure of material events. It is a matter of grave concern that a government controlled company has failed to notify the exchanges of this reduction in their reserves, something that has serious implications for both investors and the country at large.”

The company has contracted four of the world’s largest banks, Bank of America, Deutsche Bank, Goldman Sachs and Credit Suisse, to push its new share offer on the international stage, despite unions threatening to strike if the sale goes ahead, and with the company share price dropping in recent weeks.

In light of this evidence, these banks have a moral and legal responsibility to ensure that material facts relating to the company’s reserves are disclosed to investors.

The new data about Coal India’s reserves also casts doubt on the government’s ability to sustain its planned investment in coal-fired power plants. Coal India currently supplies 80% of the country’s coal and India has plans to add over 100,000 MW of new coal by 2017, even though the company is struggling to supply existing power plants. As a result, spiraling coal imports have played a role in India’s ballooning Current Account Deficit and led to higher power tariffs.

Notes to Editors:

1. Report available at

2. The 21.7 billion tonnes is under the archaic Indian Standard Procedure system, while the 18.2 billion tonnes is under the internationally recognized UNFC system. The government of India had taken a decision in 2001 to switch to the UNFC system – a decision that has yet to be fully complied with by Coal India.

For more information contact:

Ashish Fernandes, Campaigner, Greenpeace +91 89710 11229 (till October 14) +1 857 288 9357 (after October 15)

Arundhati Muthu, Campaigner, Greenpeace +91 98806 39937

Jagori Dhar, Senior Media Officer, Greenpeace +919811200481

Nitya Kaushik, Senior Media Officer,Greenpeace,, +91 9819902763

About the Authors:

Ashish Fernandes: Ashish joined Greenpeace in 2006. Since then he has worked on a number of issues at the intersection of corporate accountability and the environment. Since 2010, he has been focusing on the financial, social and environmental risks that the coal sector poses to investors, financial institutions, communities and ecosystems.

Tom Sanzillo: Tom joined the Institute for Energy Economics and Financial Analysis (IEEFA) as Director of Finance in 2012. Tom’s reports on the U.S. coal industry have resulted in multiple investigations by federal oversight bodies including the Securities and Exchange Commission, Congress and the Government Accountability Office (GAO) ( From 1990 to 2007, Tom served in senior management positions to the publicly elected Chief Financial Officers of New York City and New York State. From 2003 to 2007, he served as the First Deputy Comptroller for the State of New York.