Fresh evidence surfaces in the decade-long probe into “over-invoicing” of coal imports totalling over Rs. 35,000 crore by corporates including Adani. This scam’s main victim was the public at large rather than the government’s coffers. The Directorate of Revenue Intelligence (DRI) had found evidence that over 40 companies were over-charging for coal that was imported and sold to thermal power plants across the country.
Adani Group companies have been accused of over-invoicing coal and power equipment by an Indian government agency and by the Hindenburg report. Over-invoicing is a practice in which the prices of imported goods are jacked up by an intermediary owned by the buyer. The inflated price is passed on to consumers or is subsidised by government, with the buyer able to pocket the difference. A blizzard of litigation has occurred over these allegations in India’s courts. In early 2024, rulings by the Supreme Court and the Delhi High Court appear to have shunted any effective investigation of these allegations off into the never-never.
An Indian government authority that investigates violations of customs law has alleged that three Adani Group companies have used intermediaries to artificially inflate the prices of imported coal-power goods. This practice, known as over-invoicing, enables companies to enrich a related third party and even to launder money, while passing on costs to consumers. The allegations against the Adani Group companies have bounced around inside the legal system for years, with little progress.
On August 31, a Supreme Court Bench headed by Justice Arun Mishra approved the decision by electricity regulators to grant Adani Power “compensatory tariffs” amounting to Rs 8,000 crore for electricity generated at its power plant in Rajasthan. The verdict is the seventh judgment since 2019 in which benches headed by him have ruled in favour of Adani group companies.
In an affidavit before the Delhi HC, clarifying the status of its probe, DRI has specified that it will appeal Bombay HC’s decision curtailing its powers to seek information from foreign countries in pursuit of its investigation into the Adani group.
A Bombay High Court order in a case relating to alleged over-invoicing of coal imported from Indonesia by a company in the Adani group threatens to undermine the capabilities of India’s investigative agencies and should be challenged.
Allowing 100% FDI in coal mining is raising apprehensions that foreign companies will now ‘plunder’ mineral resources for commercial purposes for sale in the open market.
Regulatory authorities have interpreted rules in ways that have resulted in mounting losses for public sector electricity distribution companies while users are paying higher tariffs. The Supreme Court granted Adani Power Rajasthan Limited rights to claim over ₹2,500 crore from three Rajasthan discoms by passing through tariff increases to electricity consumers, despite a 2017 judgment forbidding such compensation.
