A Dubai-based company was used as a front by the Adani Group to overvalue power generation imports, which attract zero or less than 5 per cent duty, and then route back the extra amount to the tune of Rs 1,500 crore to a Mauritius-based entity, Electrogen Infra Holdings Pvt Ltd, allegedly controlled and managed by Vinod Shantilal Adani, elder brother of the group’s chairman Gautam Adani, according to an investigation by the Mumbai unit of the Department of Revenue Intelligence (DRI).

“Intelligence developed by Mumbai Unit of DRI indicated that various entities of Adani Group were indulging in gross over-valuation of imported goods (zero or low duty rated) to siphon off money abroad from public listed companies,” the DRI report said.

Adani Group denied the allegations. “It is a standard procedure for the Group to follow International Competitive Bidding route for major capital expenditures to ensure transparency and competitiveness in the process… Adani Group is aware of the investigation being conducted by the DRI, and has fully co-operated, and shall continue to co-operate with the investigating agencies. Adani Group continues to align its vision with the national priorities of infrastructure development, food security, energy security and clean energy,” the Group said.

As per the May 2014 DRI report, three entities — Maharashtra Eastern Grid Power Transmission Company Ltd (MEGPTCL), Dubai-based Electrogen Infra FZE and the India-based contractor M/s PMC Projects (India) Pvt Ltd were involved in back-to-back overvaluation of invoicing of imports. While MEGPTCL is a wholly-owned arm of Adani Enterprises Ltd, the DRI report has described Electrogen Infra as a “closely related” firm and alleged that PMC Projects is a firm “managed and controlled” by the Adani Group.

The Opposition Congress Friday demanded a CBI investigation monitored by the Supreme Court into what it called “corrupt practices” of the company.

Addressing a press conference at the AICC headquarters, senior Congress leader Ajay Maken said the UPA government had in 2013 initiated an inquiry into the practice of over-invoicing on import of electrical equipment and machinery by a subsidiary of the Adani Enterprises Ltd. He said on the basis of the investigation, a 97-page show cause notice was issued to the firm. Maken said the report has now come into the public domain and claimed it revealed that “the Adani Group utilised a network of off-shore companies to purchase electrical equipment and then sell it to the Indian counterpart at a much inflated value and as high as about 860 per cent of the original value of the product.”

Maken alleged that the BJP government “has at best been negligent or at worst, sought to wilfully delay the outcome of these investigations as it involves parties perceived in the public eye to be uncomfortably close to its leadership”.

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