Blaming Finance Secretary Hasmukh Adhia for the sabotage of the probe in the Coal Import scam, Senior Bharatiya Janata Party (BJP) leader Subramanian Swamy urged Prime Minister (PM) Narendra Modi to have the Department of Revenue Intelligence (DRI) to appeal in the Supreme Court against the favourable verdict to Adani Group in the Mumbai High Court. Adani Group got a favourable verdict from Bombay High Court recently against DRI’s attempts to get details of Adani firms from State Bank of India’s Singapore Branch involved in the over-invoicing in coal imports. It is interesting note that Adani group lost the case in Singapore Court to block DRI and won in the Bombay High Court.

Subramanian Swamy in his two-page letter to Prime Minister came down heavily on the Finance Secretary Hasmukh Adhia for the “mess” and the sabotage of DRI’s probes and cases against Adani. “In another incident of poor litigation management, the DRI failed to engage a reputed senior advocate before the Bombay High Court in a Writ Petition involving the Letters Rogatory (LR) in Coal Imports by the Adani Group, leading to an interim stay on the entire investigations on Sept 19, 2018. This is a matter of grave concern as the DRI has won the case in Singapore High Court but strangely and inexplicably mismanaged it in Bombay High Court. LR was issued because the State Bank of India (SBI) refused to provide DRI with financial documents. Further DRI has also lost a case of Coal Import at the appellate tribunal in Mumbai, again because of not engaging a senior counsel.

“This is the outcome of the poor management or an error of judgment and the responsibility rests with none other than the Finance Secretary Hasmukh Adhia who could have simply ordered SBI Chairman & Managing Director to handover its Singapore Branch details to DRI,” said Swamy in his letter dated September 22.

Swamy said that Adhia acted in a dubious way and was engaged in a conspiracy with Adani Group to sabotage the Rs.30,000 crores scam in Coal Import happened from 2008 to 2010. PGurus had earlier reported in detail about this scam, where a probe was ordered by Narendra Modi in 2015 and reluctance of State Bank of India to share details of over-invoicing took place its foreign branches by coal importers. Though Bank of Baroda and UCO Bank showed a negative approach in sharing its foreign bank account details to DRI, later provided details. But only the State Bank of India, where the 70 percent of the over-invoicing scam happened did not provide details[1].

Apart from Adani, other major corporates like Essar Group, Anil Ambani’s Reliance Group, and Jindal Group were also involved in the over-invoicing of coal imports, which ultimately resulted in a hike in power tariffs for the common man in 2010. In the nutshell, Coal Import Scam was – These firms imported coal from Indonesia, but the bills went to shell firms of these companies in Singapore, Dubai and Hong Kong and inflated the imported price. Similar fraud happened in the import of power equipment also. All these companies’ shell firms operated through the foreign branches of SBI, BoB, UCO Bank and ICICI Bank[2].

“The dubious approach adopted by the Finance Secretary Hasmukh Adhia needs special mention. Firstly, Adhia has posted senior officers of questionable integrity to handle DRI investigations/ adjudications in Mumbai. Secondly, DRI has consistently failed in handling the litigations with due diligence in this matter which has curiously gone unchecked by the Finance Secretary. Thirdly, the non-cooperation of SBI in the investigations is abominable and that Secretary Adhia has not engaged with them to obtain the documents, summarises his attitude towards the fight against black money.

“Such a deplorable situation has arisen due to Finance Secretary Hasmukh Adhia’s mismanagement or willful participation in a conspiracy to help Adani Group,” accused Swamy urging PM’s intervention and early filing of an appeal in Supreme Court against Mumbai High Court’s verdict favourable to the Adani Group in stopping DRI probes.

References:

[1] Is Arundhati Bhattacharya protecting Coal importers who indulged in over-invoicing? Jun 23, 2016, PGurus.com

[2] DRI show cause notices to Adani, Reliance Infra and Essar on coal import scams as PSU Banks hide details – Sep 15, 2016, PGurus.com