Adani Group overcharged for coal, new evidence bolsters allegations: Report

The DRI had opened a probe almost a decade back to deliberate whether Adani Group and other companies used offshore intermediaries to jack up coal prices supplied to utilities. The probe against the conglomerate's chairperson, who many of the political opposition has claimed is close to Prime Minister Narendra Modi, was stopped from moving forward after the former won a case in the Bombay High Court.

At least 25 shipments originally priced as low-quality coal reached the coast of Tamil Nadu between January and October 2014, following which the Adani Group sold it to the state power company for triple the amount, the Organized Crime and Corruption Reporting Project reported.

This is based on documents OCCRP obtained.

The global network of investigative journalists flagged, in particular, carrier M V Kalliopi L, which reached Chennai from Indonesia on January 9, 2014, carrying 69,925 metric tons of coal meant for Tamil Nadu's power company. The paperwork for this, however, went through a circuitous route through the British Virgin Islands and Singapore.

As per the OCCRP report, the price of coal more than tripled to $91.91 per metric ton during this journey, and the quality too changed from low-grade steam to the high-quality version that power companies seek.

OCCRP has stated its evidence into the Adani Group comes from various sources, including invoices and banking documents from different jurisdictions, details of the probe by India's Directorate of Revenue Intelligence (DRI), documents from Tamil Nadu Generation and Distribution Corporation (TANGEDCO), and leaked documents from a key coal supplier for Adani in Indonesia.

The collective has further stated that this data. though not definitive, adds strong new proof to allegations that the Adani Group, India's largest importer and private coal producer, over-invoices.

This alleged overpricing holds implications not only for ordinary Indian citizens, who would face the burden of inflated fuel costs, but also burning lower-quality coal causes more pollution, and is responsible for over 16 lakh deaths in India in 2019, as per a recent Lancet study.

OCCRP further reported that Arappor Iyakkam, a TN-based NGO fighting for accountability in this alleged coal scam, estimate that TANGEDCO overpaid Rs 6,000 crore for coal from all vendors between 2012 and 2016, a period during which half the value of the tenders went to Adani, as per the power company.

An Adani spokesperson, however, termed OCCRP's findings 'false and baseless.'

"The suggestion that Adani Global Pte Ltd supplied to TANGEDCO inferior coal, as compared to the quality standards laid down in the tender and PO [purchase order], is incorrect," the spokesperson told OCCRP in an email, adding, "While it is difficult for us to comment on individual cases due to the sheer volume of data and the elapsed time, not to add the contractual and legal obligations, it is important to note that the coal supplied, irrespective of the declaration by the supplier, is tested for quality at the receiving plant."

The Adani Group spokesperson also junked Iyakkam's analysis as well as any responsibility for air pollution in the country or losses on the part of the state power companies.

"By no stretch of imagination can Adani Global Pte Ltd, with a total supply of less than 2 per cent of the coal burnt by TANGEDCO in the relevant period, be held responsible for either air pollution or the losses of [power distribution companies]."

However, the spokesperson clarified that shipments were tested for quality at multiple points during the process.

"With the supplied coal having passed such an elaborate quality check process by multiple agencies at multiple points, clearly the allegation of supply of low-quality coal is not only baseless and unfair but completely absurd," the individual said.

The Adani Group spokesperson however added that if the coal delivered was found to be of inferior quality than what the contract stipulated, the payment would be reduced accordingly. The contract allowed for a range between 5,800 and 6,700 kcal/kg.

What about the DRI case against the Adani Group?

The DRI, under the Ministry of Finance, had opened a probe almost a decade back to determine whether the Adani Group and other companies used offshore intermediaries to jack up the coal prices supplied to utilities.

The probe against the man, who many of the political opposition has claimed is close to Prime Minister Narendra Modi, was stopped from moving forward after Adani won a case in the Bombay High Court blocking DRI from seeking details of shipments, which included types of invoices that OCCRP has now obtained from abroad.

An appeal to the Supreme Court from the DRI didn't yield much results either.