Report on Adani Group overpaying for coal imports shows ‘biggest scam of modern India’: Congress
Party leader Jairam Ramesh said that ‘Modi-made magic’ was visible even in a low-margin business like coal trading.
The Congress on Friday cited a report by the Financial Times alleging that the Adani Group imported billions of dollars of coal well above market prices and made consumers pay more for electricity, to claim that it was the “biggest scam of modern India”.
In a statement, Congress General Secretary Jairam Ramesh alleged that “Modi-made magic” was visible even in a low-margin business like coal trading. He was referring to claims that Prime Minister Narendra Modi favours Gautam Adani, the founder of the group, in business deals.
In 2019, Scroll had reported that the Adani power project in Gujarat was on the brink of bankruptcy but the Bharatiya Janata Party governments at the Centre and in the state saved the project.
On Friday, Ramesh said the fresh allegations against the conglomerate indicates that over Rs 12,000 crore may have been siphoned off in two years. “India will not be captured by Modani,” the Congress leader asserted. “The people of India will answer in 2024.”
The London-based newspaper said that it had examined 30 shipments of coal from Indonesia to India by an Adani company over 32 months between 2019 and 2021. “In all cases prices in import records were far higher than those in the corresponding export declarations,” the report said.
These 30 shipments had an export price totalling $139 million in addition to $3.1 million worth shipping and insurance costs when they left the Indonesian shores, the Financial Times claimed. But on arrival in India, they were allegedly registered as having an import price of $215 million – a 52% increase.
The Adani Group issued a preemptive statement on Monday, saying that the Financial Times report is an attempt to “rehash old and baseless allegations” to tarnish the name of the conglomerate.
The allegations about over-invoicing imported coal prices did not pass the scrutiny of a customs tribunal and the Directorate of Revenue Intelligence, the statement said.
The tax intelligence agency had in 2016 issued a circular saying that 40 entities, including five Adani Group companies, were being investigated for “artificially inflating” coal imports from Indonesia to siphon off money abroad and to avail higher power tariff compensation.
The notice alerted that the “cases under examination suggest huge over-valuation to the extent of about 50% to 100%”.
In its statement, the Adani Group said that the Directorate of Revenue Intelligence had earlier this year been forced to withdraw an appeal in a case before the Supreme Court against one of the 40 importers named in the 2016 notice.
But the Financial Times said that the “unresolved nature” of the inquiry by the Directorate of Revenue Intelligence and the apparent continuation of the alleged practices raise fresh questions.
While the gains from the alleged over-invoicing did not lead to excess profit for the Adani Group, three “middlemen” – Hi Lingos that ran operations out of a residential address in Taiwan, a Dubai-based company called Taurus and a small Singaporean firm named Pan Asia Tradelink – “appear to have made more substantial amounts”, according to the newspaper.
“Indian import data since July 2021 indicates Adani paid a total of $4.8bn to the three companies for coal sourced at substantial premiums to market prices,” the report said.
The newspaper noted that an investigation done by the Organised Crime and Corruption Reporting Project in August showed that Chang Chung-Ling, the owner of Hi Lingos, was “secretly one of the largest shareholders in the three Adani companies” from 2013 to at least early 2017.
“Chang’s identity was obscured by layers of paperwork in tax havens, while the investments were overseen from Dubai by an employee of Vinod Adani, Gautam’s brother,” the report said.
However, the Adani Group has rejected all these allegations, claiming that they are “false and baseless”.