Weeks after Singapore High Court ordered Adani Group to produce its crucial documents pertaining to Indonesian coal imports, as requested by India’s Directorate of Revenue Intelligence (DRI) through letters rogatory (LRs), on August 28, the Adani Group filed a petition in Bombay High Court seeking to quash all LRs issued by Customs Department to foreign countries against its firms.
Recently, a lower court of Singapore asked the Adani Group to produce at least 24 documents pertaining to its business in importing coal from Indonesia. The direction was in response to the request made by the DRI through LR – a formal request seeking judicial assistance. When Adani Global Private Limited approached the Singapore High Court asking to stay the lower court order, its request was declined, and the company was asked to follow the lower court order.
Earlier this year, DRI had sent LRs to foreign countries – Singapore, Dubai and Switzerland – as part of its ongoing investigation into financial fraud by companies and entities in power sector. Reportedly, DRI is probing at least 40 companies, including companies of the Adani Group, two companies of the Anil Dhirubhai Ambani Group (ADAG) and two Essar Group firms, for alleged overvaluation of coal imports from Indonesia between 2011 and 2015. As per the DRI documents, while Indonesian coal was being shipped directly from Indonesian ports to India, the invoices were routed through one or more intermediaries in tax havens to artificially inflate value, which amounted to Rs 29,000 crore during the period.
According to The Indian Express, the DRI, in course of the probe, had raided 80 shipping companies, labs and intermediaries – including many in Maharashtra, Delhi, Gujarat, Karnataka, Odisha, West Bengal, Andhra Pradesh and Kerala – to obtain documents for differentiating between real and inflated values of the imported goods. In 2016, three state-owned banks had declined to share information of financial transactions lying with their overseas branches of the companies in question, which would have been substantial evidence for the DRI in support of its allegations.
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In 2014, the DRI accused the Adani Group of siphoning Rs.3,974 crore through over-invoicing of power-plant equipment imported from foreign countries. However, in August 2017, CESTAT (Customs, Excise and Service Tax Appellate Tribunal), Customs Department’s adjudicating authority, had let off the Adani Group in the case, which the DRI described as “erroneous, illegal and improper not only in law but also on facts.”
Currently, the Delhi High Court is hearing two cases, one by NGO Common Cause and another petition by social activist Harsh Mander, seeking a special investigative team (SIT) probe in all the cases of over-invoicing of imported coal and power equipment in order to cheat the people and siphon off funds from public companies.
As the Adani Group’s reluctance in cooperating with the DRI probe has become apparent, its latest petition in the Bombay High Court would nonetheless be another addition to the fraud cases which are being dragged for years.