Adani Files – A short history of corruption, destruction and criminal activity

Adani is an Indian mining and energy company seeking to build the world’s biggest new coal mine in central Queensland’s Galilee Basin — the Carmichael mine.

Adani’s Carmichael coal mine has become notorious for its sheer scale, and for the damage it will cause to the Great Barrier Reef, to vast quantities of groundwater, to the world’s climate, and to threatened species.

But the project’s proponent is also fast becoming one of the most controversial companies in the world.

Adani has a documented history of corruption, bribery, and human rights abuses across the world. It’s currently facing further criminal investigations for alleged involvement in multi-billion dollar fraud in India.

Despite Adani’s appalling track record, the mine’s unpopularity, and its enormous environmental and social impacts, Australian Queensland and Federal governments continue to support the Adani project.

Malcolm Turnbull’s Federal Government is now preparing to give Adani a $1 billion taxpayer-subsidised loan to build a rail line from the mine site to the associated coal port, Abbot Point. Polling shows 74.4% of Australians oppose public money being used in this way.

This report brings together new and previously documented evidence that shows Adani are, at their core, a dangerous, criminal organisation, not a viable proponent to be trusted with one of the most environmentally destructive projects in Australian history.

In 2011, an unseaworthy Adani coal ship sank off the coast of Mumbai, causing a massive oil spill and spilling 60,054 metric tonnes of coal into the ocean. Adani did nothing to clean up the mess for five years, as the spill destroyed mangroves, polluted beaches, and caused serious damage to the local marine environment and Mumbai’s tourism industry.

In 2016 Adani and others were found liable for the spill and for failing to clean it up, and were fined the equivalent of AU $975 000.

In the coastal town of Mundra in India, Adani operates one of the world’s largest coal-fired power plants. Investigations of the Mundra project by Indian officials, independent committees and documentary film crews reveal a record of environmental destruction, harm to local communities, and a failure to comply with environmental regulation and development permits.

Adani illegally cleared 75 hectares of protected mangroves, flattened sand dunes, dredged the ocean, and blocked waterways. These activities created a diminished and diseased fish population, turned the groundwater saline, and flooded a village.

The outcome for the local villagers was catastrophic. Having traditionally relied on fishing and farming to survive, they are now left with barren land and oceans — their fish stocks decimated.

Villagers reported Adani using bribery and intimidation to silence anyone who tried to challenge them. [1]

In 2010, Adani’s Australian CEO —  Jeyakumar Janakaraj — was Director of Operations at Konkola Copper Mines (‘KCM’) in Zambia. He was “responsible for overall operations” when the company caused a major pollution disaster that poisoned the Kafue River — the lifeblood for much of Zambia’s people.

KCM discharged ‘pregnant liquor solution’ — highly acidic, metal-laden water generated from leaching in copper mining — into the river, which caused the river to change colour. Villagers who used to rely on the river for cooking, cleaning and bathing now say that, because of the pollution, people have become sick and died, the soil is barren, and the water smells foul and is orange-coloured. 1,800 Zambian villagers have filed a lawsuit against KCM to recover damages.

In November 2010, the Government of Zambia brought a successful criminal prosecution against KCM for this pollution and the harm it caused. Adani failed to disclose this incident when applying for approvals for the Carmichael mine, as required under Australian law.

Adani had no approval to begin work at their Hazira Port when they started illegally wiping out mangroves and claiming land. They blocked access to traditional fishing areas for 80 fishing families from the village of Hajira. Further, they destroyed mangroves and allegedly destroyed the habitat of a critically endangered bird species.

In January 2016 Adani was ordered to pay $4.8 million AUD for compensation and restoration and had their environmental approval revoked.

Media reports from India reveal Adani is using police intimidation, bribery and threats to dispossess people of their land in Jharkhand — where the company want to build two power plants.

Villagers and government officials say the Jharkhand Government has deliberately undervalued local villagers’ land to allow Adani to acquire the land at a fraction of the land’s real value. One legislator raised the issue in state assembly, contending landowners are expected to receive about one tenth of the value of their land.

Community meetings on the sale of the land have been surrounded by a heavy-handed, intimidating police presence.[3] [4]

Adani engaged in broad-ranging bribery to conceal the illegal export of 7.7 million tonnes of iron ore. In 2011, the Ombudsman of the Indian state of Karnataka investigated the corruption, and discovered a staggering scale of bribery.

Adani had bribed:
the police,
local politicians,
customs officials,
the State Pollution Control Board,
the Port Department,
the Weight and Measurement Department,
in return for facilitating and hiding their illegal exports.

Also, Adani routinely accepted iron ore from traders who were not permitted to supply the ore. The Ombudsman concluded that this scam, in which Adani was a major player, resulted in the illegal export of around 7.7 million tonnes of ore between 2006 to 2010.

Like big power companies in Australia, Adani are perfectly happy to screw their customers to inflate their profits. They lied about the cost of imported coal and equipment in order to evade tax and trick regulators into letting them charge Indian consumers much higher prices for their coal-fired power. Their gas supply arm was also found guilty of abusing its market power to overcharge its customers. Adani even colluded with a state power company to drive up prices in the midst of a power shortage crisis.

Six Adani Group companies are under investigation for lying about the quality and, hence value, of coal imported from Indonesia, allowing them to get away with charging higher prices, demanding public handouts, and driving up costs for Indian electricity customers. There is solid evidence that they’ve already ripped off their customers to the tune of over $200 million AUD.

Adani is also under investigation for a billion-dollar fraud, exaggerating the value of equipment imports into India by over 60%. Adani allegedly used an offshore holding company in Mauritius to siphon off much of the extra money from inflated invoices.

The Mauritius holding company is managed by Vinod Shantilal Adani, the older brother of Gautam Adani, and Chairman of the Adani group. Vinod is the sole director of a number of Singapore companies that own Adani subsidiaries in Australia. These companies are ultimately owned by a company registered in the Cayman Islands.

Adani chairman Gautam Adani and Indian Prime Minister Narendra Modi are old friends. Modi even travelled in an Adani-branded private jet during his election campaign. And it turns out Adani isn’t afraid of calling in favours.

While Modi was Chief Minister of Gujarat, Adani acquired vast swathes of land from farmers and locals in Mundra at a fraction of market value. It left locals across 14 villages dispossessed, and Adani clear to start construction.

Media reports revealed that the government sold 14,305 acres of land at Mundra to Adani at between 1 and 32 rupees per square metre (between 3 and 60 cents AUD), far less than offered to companies doing comparable projects.

Further, the Comptroller and Auditor General of India found that two pieces of forest land (1,840 hectare and 168.42 hectare) had been incorrectly classified, resulting in yet another undue benefit to Adani.

In 2013, the people of Gujarat were suffering from power shortages. At the same time, Adani was colluding with the local power authority to gouge prices and rip people off by providing short-term power at extremely high prices.

Adani’s competitors lined up to supply the people of Gujarat cheaper, long-term electricity but their tenders were blocked by the power authority. This resulted in massive price-hikes and ensured the only energy available was the highly expensive, short-term supply provided by Adani. Adani’s competitors subsequently brought litigation against the power authority for the price-gouging.

In 2014, Adani was found guilty of using its dominant market position to impose unfair conditions on gas customers. They were ordered to change their gas supply contracts and pay $4.8 million AUD.

A special investigative unit of the Indian tax department (the Directorate of Revenue Intelligence) spent over a decade investigating Adani for laundering money and dodging $195 million AUD in taxes.

One of the more audacious alleged attempts to dodge taxes and hide the proceeds involved the trade of rough-cut diamonds and gold jewellery. Adani appears to have set up a complex web of front companies specifically to fleece Indian taxpayers by misusing various government export incentive schemes. Adani then attempted to hide its illicit profits by storing imported diamonds in a bond, then re-exporting them at artificially inflated prices.

The overwhelming weight of evidence collected by the Directorate of Revenue Intelligence was upheld in a civil court case, although it was later dismissed when the department actually tried to make Adani pay the money back.

The Carmichael rail line that Adani are seeking a $1 billion taxpayer loan for, is ultimately owned by an Adani entity operating out of the  Cayman Islands, a notorious tax haven. This presents a clear risk that public money will be siphoned offshore with no returns for the Australian taxpayer.

The ownership of the Abbot Point coal port is so shrouded in deception and confusion that it remains unclear who actually owns it.

There are massive discrepancies between what Adani says in India and what it says in Australia about the ownership structure of Abbot Point. But one thing is clear — Adani is lying to someone.

Accounts lodged in India have removed Abbot Point from a publicly listed Adani company and attributed ownership of the coal port to a private Singapore company, ultimately owned by an Adani family entity in the Cayman Islands. However, Australian financial accounts suggest the listed Indian company retains ownership of Abbot Point.

The absence of correct information about the ownership of Abbot Point may amount to misleading or deceptive conduct.

Adani’s most recent financial report lodged with ASIC did not disclose its immediate parent company and provided no detail about the actual or potential transfer of the ownership or control of Abbot Point from an Indian based Adani entity to one based in Singapore (also a known tax haven).