OCCRP Report Unveils Major Scam in Adani’s Coal Supply to Tamil Nadu
23.05.2024: A recent exposé by the Organized Crime and Corruption Reporting Project (OCCRP) has uncovered a significant scam involving the supply of coal by the Adani Group to Tamil Nadu’s power utility. According to the report, between January and October 2014, at least 24 shipments of low-quality coal were sold at triple their original cost.
Allegations and Findings
The OCCRP’s investigation reveals that the shipments, which landed on the Tamil Nadu coast, were initially priced as low-grade coal. However, by the time they were sold to the state’s power utility, their prices had tripled. The report highlights a specific incident on January 9, 2014, when the MV Kalliopi L arrived at Ennore port from Indonesia with 69,925 tonnes of coal. Despite starting as low-quality steam coal, the paperwork showed a dramatic price increase and a sudden improvement in quality to high-grade coal by the time it reached Tamil Nadu Generation and Distribution Corporation (Tangedco).
The Paper Trail
The documentation for the coal shipment took a convoluted path through the British Virgin Islands and Singapore. Initially, Supreme Union Investors Ltd., a company registered in the British Virgin Islands, invoiced the coal at $33.75 per tonne with a calorific value of below 3,500 kcal/kg. When Adani Global PTE Singapore, the regional headquarters of the Adani Group, issued the invoice to Tangedco, the price had soared to $91.91 per tonne, and the coal was listed as having a calorific value of 6,000 kcal/kg.
Supporting Evidence
The OCCRP report is backed by various sources, including invoices, banking documents, and leaked documents from an Indonesian coal supplier. Additionally, India’s Directorate of Revenue Intelligence (DRI) had been investigating whether Adani and other companies inflated coal prices using offshore intermediaries. Although Adani won a case in the Bombay High Court blocking the DRI from accessing certain shipment details, the DRI has appealed to the Supreme Court.
Reactions and Implications
Local watchdog Arappor Iyakkam, which had previously requested an investigation into Tangedco’s coal imports, sees the OCCRP report as a reaffirmation of its allegations. Jayaraman Venkatesan of Arappor Iyakkam highlighted that between 2012 and 2016, Tangedco imported 2.44 crore tonnes of coal, with 49% coming from Adani Global. Venkatesan emphasized the discrepancy in the calorific value of the coal, which resulted in substantial losses for the Electricity Department.
Despite the revelations, no First Information Report (FIR) has been filed against Adani. However, a complaint registered with the Directorate of Vigilance and Anti-Corruption (DVAC) led to an FIR and raids on retired officials of the Electricity Department.
Environmental Concerns
Environmental activists, like G. Sundararajan of Poovulagin Nanbargal, have raised concerns about the environmental impact of burning low-quality coal. He pointed out the significant pollution in areas like Ennore and urged the State government to penalize Adani for both financial and environmental damages.
Adani’s Response
In response to the OCCRP findings, an Adani spokesperson denied the allegations, calling them “false and baseless.”
The OCCRP report has cast a spotlight on a major scam in the coal supply chain involving the Adani Group and Tamil Nadu’s power utility. As the investigation continues, the implications for financial accountability and environmental integrity remain significant.
Source – The Hindu