OCCRP report alleges huge scam in the supply of coal by Adani

OCCRP exposes Adani group for selling low-quality coal at triple the cost to Tamil Nadu power utility.

Revelations by the Organized Crime and Corruption Reporting Project (OCCRP) regarding the low quality of coal being supplied by the Adani group have created a flutter in political and bureaucratic circles. While the issue of low-quality coal and the resultant environmental degradation has been flagged repeatedly in recent times in Tamil Nadu, this exposé claims that at least 24 shipments that landed on the Tamil Nadu coast between January and October 2014 were originally priced as low-quality coal but ultimately sold by the Adani group to the State’s power utility at triple the cost.

On January 9, 2014, the bulk carrier MV Kalliopi L docked at the Ennore port after a two-week voyage from Indonesia. It was carrying 69,925 tonnes of coal destined for the State’s power company, OCCRP said. However, the paperwork for the cargo took a more circuitous route, passing through the British Virgin Islands and Singapore, it said. During this journey, the price of the coal more than tripled, to $91.91 per tonne. The quality also inexplicably changed from low-grade steam coal to the clean, high-quality version sought by power companies, OCCRP said.

Before reaching Tangedco, the paperwork for the shipment passed through a middleman: Supreme Union Investors Ltd, a company registered in the tax haven of the British Virgin Islands, it said. Supreme Union Investors issued an invoice for the same shipment to Adani Global PTE Singapore — the group’s regional headquarters — that listed the unit price as $33.75 per tonne, and the quality as “below 3,500” kilocalories per kilogram (kcal/kg), which is considered low-grade, OCCRP said. But when Adani Global issued its invoice to Tangedco for the shipment a month later, everything had changed. The unit price shot up dramatically to $91.91 per tonne and the coal was listed as having a calorific value of 6,000 kcal/kg, a high-quality form, relatively free of impurities, it added.

The evidence comes from multiple sources, including invoices and banking documents from several jurisdictions, details of investigations by India’s Directorate of Revenue Intelligence (DRI), leaked documents from a key Indonesian coal supplier for Adani, and a trove of documents obtained from Tangedco, it said.

It said that the DRI, under the Union Ministry of Finance, opened an investigation nearly a decade ago into whether Adani group and other companies had used offshore intermediaries to inflate the price of coal supplied to utilities. However, Adani won a case in the Bombay High Court that blocked the DRI from seeking details about shipments, including the types of invoices the OCCRP has obtained, from abroad. The DRI has filed an appeal in the Supreme Court.

The Arappor Iyakkam said that its request for an investigation into the coal import scam by Tangedco, wherein Adani group had sold low-quality coal imported from Indonesia at an exorbitant price, had been reaffirmed by the OCCRP report.

Jayaraman Venkatesan of Arappor Iyakkam said that Tangedco had imported huge quantities of coal from 2012 to 2016 for power plants — a total of 2.44 crore tonnes from Adani Global Private Limited, Knowledge International Strategy Systems, Chettinad Logistics, MMTC and MSTC, of which 49% of the coal imported were given to Adani global.