New Delhi: Recent allegations of impropriety have surfaced concerning the Adani Group, with a report from the UK-based Financial Times accusing the conglomerate of inflating the prices at which it purportedly imported coal and then selling coal-generated electricity to Indian consumers at inflated rates.
The Financial Times investigation, spanning January 2019 to August 2021, reportedly revealed that the Adani Group had allegedly inflated the import price of coal by approximately $73 million across 30 shipments scrutinized by the newspaper.
The discrepancies were stark, with shipments that departed from Indonesian shores at an export cost of $139 million reportedly being registered in India at an import cost of $215 million, marking a notable 52 percent increase in price.
FT’s investigation suggests that while the benefits from this overvalued coal did not directly accrue to the Adani Group, they did allegedly favor companies that concealed their shareholding ties to the group.
The Adani Group, however, issued a preemptive statement earlier, dismissing the forthcoming FT report as an attempt to resurrect “outdated and unsubstantiated allegations” aimed at tarnishing the reputation of the group. They pointed out that the timing of the report coincided with a Supreme Court hearing related to prior allegations of corporate misconduct raised by the American short-seller Hindenburg Research.
The Directorate of Revenue Intelligence (DRI) had previously raised concerns in 2016, suggesting that 40 entities, including five Adani Group companies, were under investigation for suspected over-invoicing of coal imports from Indonesia. Subsequently, Letters Rogatory were dispatched to several countries, including Singapore, for more information. The Bombay High Court initially quashed these letters but was later overturned by the Supreme Court in January 2020.
The Adani Group contends that these allegations have already been conclusively addressed by India’s highest court of law.
The FT report has once again cast a shadow on the Adani Group, suggesting that the politically connected conglomerate may have imported coal at rates substantially exceeding market value. This, as per FT, led to inflated fuel costs, causing Indian consumers and businesses to pay more for electricity.
FT’s investigation focused on 30 coal shipments between January 2019 and August 2021, cross-referencing multiple data sources to validate the discrepancies.
– The report indicates that the inflated import cost did not directly benefit the Adani Group but rather went to three intermediary companies: Hi Lingos in Taipei, Taurus Commodities General Trading in Dubai, and Pan Asia Tradelink in Singapore.
– The involvement of Chang Chung-Ling, a Taiwanese businessman and owner of Hi Lingos, is scrutinized, with allegations suggesting that he was a concealed major shareholder in three Adani companies.
The Adani Group has vehemently denied these allegations, characterizing them as “false and groundless” and attributing them to an “attempt to destabilize the Adani Group” under the guise of public interest. They have also raised concerns about the “brazen agenda” behind the FT report.
