Adani group faces allegations of selling low-grade coal as high quality

New Delhi: The Adani Group is at the centre of yet another controversy, with the Organized Crime and Corruption Reporting Project (OCCRP) alleging that the conglomerate sold low-quality coal as high-value cleaner fuel to the Tamil Nadu government-owned power utility.

A Financial Times report on Wednesday said as per documents accessed by the OCCRP showed that in January 2014, Adani purchased an Indonesian shipment of coal said to contain 3,500 calories per kg. The same shipment was sold to the Tamil Nadu Generation and Distribution Company (Tangedco) as 6,000-calorie coal, one of the most valuable grades.

The news report claimed that in January 2014, Adani Group bought 'low-grade' coal from an Indonesian company at an alleged cost of $28 a tonne. The same shipment was then sold to the Tangedco as high-quality coal for an average price of $91.91 per metric tonne.

Due to this, not only did the Adani Group make a huge profit, but it also harmed the environment due to the burning of low-grade coal by the power-generating company, the report said. 

While the Adani Group denied all allegations, the news report was cited by opposition leaders including former Congress president Rahul Gandhi to demand a probe by a Joint Parliamentary Committee into the alleged wrongdoing.

Former Congress president Rahul Gandhi claimed that a "huge coal scam" has come to light under the BJP government and through this "scam", "Prime Minister Narendra Modi's favourite friend Adani" has looted thousands of crores of rupees by selling low-grade coal at three times the price, which the common people have paid from their pockets for expensive electricity. 

A spokesperson of the Adani Group said the quality of the coal was independently tested at the point of loading and discharge, as well as by customs authorities and Tangedco officials.  “Moreover, the payment is dependent on the quality of coal supplied, which is determined through the testing process,” said the spokesperson. 

The FT report said that the Directorate of Revenue Intelligence (DRI) ordered a probe nearly a decade ago to find out whether Adani Group and other companies had inflated the price of coal supplied to utilities. However, Adani won a case in the Bombay High Court that kept the DRI from seeking details about shipments. The DRI has filed an appeal in the Supreme Court.

The Adani Group termed the references in the report to DRI enquiry as a rehash of old allegations.

The inquiry into allegations of over-valuation of Indonesian coal imports, the group said, was initiated against 40 companies. “The Adani companies furnished details sought by the DRI more than four years ago. Thereafter, the DRI has not asked for further documents. Nor has the DRI communicated any deficiency or objection.” 

Congress general secretary Jairam Ramesh alleged that Adani made excess profits of Rs 3,000 crore from this while the common person was made to suffer overpriced electricity and elevated air pollution.