A public-interest litigation petition has been filed in the Delhi High Court against the multinational business conglomerate Adani group, Reliance Anil Dhirubhai Ambani Group and other energy and mining companies, including Essar, demanding a probe into allegations of over-invoicing of coal mined from Indonesia and power equipment imported into the country between 2011 and 2015. The companies have also been accused of siphoning off the excess funds into offshore accounts.
According to a report by The Guardian, the writ alleges that Adani Group, Reliance ADAG, Essar, and several others inflated the price of power equipment and coal “in order to cheat the people and to siphon off funds from public companies”.
The alleged scam which is estimated at around Rs 290 billion involves 40 companies who have been accused of increasing the price of coal mined from Indonesia using front organisations.
The report throws light on the alleged price inflation that might have benefitted the companies as they could transfer their money into overseas accounts without paying tax. This might have also led to the higher power prices in India, as the cost of equipment and coal would certainly affect the power tariffs, resulting in the end consumer having to pay a hiked up price for electricity supply.
The PIL filed by noted advocate and social activist Prashant Bhushan accuses the firms of “cheating the shareholders and the tax authorities, in addition to cheating the consumers”.
The lawsuit also criticised the decision of the Directorate of Revenue Intelligence to drop proceedings against the Adani group over a Rs 39 billion fraud case in an adjudication order dated August 22.
The Adani Group is currently awaiting judgment on a Rs 15 billion scam in which the firm has been accused of overpricing electricity equipment for two power projects in Maharashtra.
In 2014, DRI had issued a show-cause notice to a few firms of the Adani Group alleging overvaluation of imported power equipment and “siphoning off of money abroad”, The Indian Express newspaper had reported.
An excerpt from the notice reads: “The goods (power generation and transmission equipment) are being shipped directly to India by the original equipment manufacturers (based in China and South Korea), (and) the documents are routed through an intermediary entity (M/S Electrogen Infra FZE, UAE) created in Dubai. The actual invoice value of the Original Equipment Manufacturer (OEM) is remitted to the supplier while the inflated extra amount is sent to accounts held in subsidiary/holding company established by Adani Group in Mauritius.”
The petition, which also accuses the DRI, will be reviewed by the court. With the case slowly starting to grab eyeballs, as much of the media had not reported about it, the Congress party has also called for a detailed probe into the allegations.
September 18, 2017 at 4:08 pm
The group of companies have been expanding their business and making huge profits. The court should order an enquiry on deceiving the shareholders and public