Indian investigators are actively pursuing the reopening of a probe into the Adani Group regarding the alleged overvaluation of coal imports. Legal documents reveal that authorities have approached the Supreme Court, seeking permission to gather evidence from Singapore, a step impeded by the company for several years.
Since 2016, the Directorate of Revenue Intelligence has sought transaction documents related to Adani’s dealings from Singapore authorities. The suspicion is that Adani’s coal shipments from Indonesian suppliers were initially invoiced at inflated prices to its Singapore unit, Adani Global Pte, and then to its Indian subsidiaries.
Despite repeated legal challenges by Adani Enterprises and its subsidiaries, led by billionaire Gautam Adani, both in India and Singapore, to block the release of documents, the investigative efforts persist. Adani denies any wrongdoing, emphasizing that Indian authorities thoroughly assessed its coal shipments before releasing them from ports.
In a legal filing on October 9, revealed for the first time, the revenue intelligence agency petitioned India’s Supreme Court to annul a prior lower court order that allowed Adani to prevent authorities from collecting evidence from Singapore.
Adani has consistently argued that the agency failed to adhere to “due process.” Contrary to this, the revenue agency contends that it had obtained approval to seek information from Singapore under a mutual legal assistance treaty, affirming that the investigation is fully compliant.
In response to queries, the Adani Group stated to Reuters that it had cooperated fully with authorities, providing details and documents over four years ago. The company asserted that no deficiencies or objections were communicated by investigators thereafter.
This renewed effort to revive the coal probe aligns with broader regulatory scrutiny of Adani, triggered by Hindenburg Research’s accusations in January, accusing the tycoon and his conglomerate of improper use of tax havens and stock manipulation. Despite Adani’s denials, the allegations led to a substantial $150 billion plunge in the group’s stocks.
Political opponents have seized on the situation, intensifying pressure on Prime Minister Narendra Modi’s administration, alleging favoritism toward Adani in government decisions. Both Modi and Adani, hailing from Gujarat, have refuted claims of impropriety.
The revenue agency’s investigation into Adani’s imports is part of a wider inquiry into 40 companies initiated in 2014. The agency alleges that companies importing Indonesian coal, including Adani, overstated or artificially inflated the import value compared to the export value from Indonesia. This, according to court filings, aimed at siphoning funds to tax havens and charging higher power prices in India.
The amounts involved could potentially reach billions of rupees, although no specific Indonesian supplier has been identified.
The evidence sought from Singapore authorities, including transaction documents from 20 of Adani’s banks, is crucial to establishing a financial trail in the case. If India’s Supreme Court grants permission, the agency will then need to seek an order from Singapore’s Court of Appeal for the release of the material.
The ongoing legal tussle reflects the complexity of the case, spanning multiple jurisdictions from Mumbai to New Delhi to Singapore. Adani’s legal challenges and procedural disputes have resulted in a prolonged and intricate battle between the company and Indian authorities.
The next hearing is scheduled for February 6, underscoring the protracted nature of this high-stakes investigation.
By Reuters
