In what could spell trouble for the 40-odd companies in the alleged Coal scam, Delhi HC asks CBI to explain why they closed the probe

The Delhi High Court on Wednesday issued a notice to the Central Bureau of Investigation (CBI) to explain why it closed the Preliminary Enquiry in the Rs.30,000 crore Coal Import scam during its tainted Chief Ranjit Sinha’s tenure while the Department of Revenue Intelligence’s (DRI) probe was going on. The Bench comprising Justices Ravindra Bhat and AK Chawla also directed the Union Government to respond to the matter within two weeks. The DRI filed a detailed affidavit in the Court blaming PSU Banks for not co-operating with the probe on the over-invoicing by the corporate majors like Adani in importing coal. This Coal import scam involves Rs.30,000 crores in the import of Power Plant Equipment along with Coal.

The Delhi High Court’s order seeking an explanation from CBI is going to put the agency in a tight spot. The petitioner Prashant Bhushan pointed out that CBI has only filed a First Information Report (FIR) against the Public Sector Undertaking (PSU) NTPC in the coal import scam that happened during 2008 to 2010 and avoided a probe against the major corporates involved in over-invoicing. As many as 40 companies were in on the coal import scam during 2008 to 2010, which ultimately led to the common man paying high electricity bills.

Of the Rs.30,000 crore fraud billing, the majority of the imports (of above 60 percent) was executed by the Adani Group firms. Anil Ambani’s Reliance companies and Essar’s power companies were also involved in the inflating the import bills. PGurus had reported this scam in detail[1].

Bhushan also pointed out that the CBI had registered a Preliminary Enquiry in the scam after DRI issued a notice to Adani Group, which was involved in the major portion of import. But during Ranjit Sinha’s tenure the probe into the Power Plant imports in relation to the Coal Import scam was closed down, said Bhushan pointing out that the Apex Court is still probing the conduct of Sinha for entertaining many accused Corporates at his home during the night. The High Court has scheduled the next hearing on May 1.

Ranjit Sinha was caught by the apex court for meeting many accused companies top officers at his official residence at night. Most of the accused companies were involved in either the 2G scam or the Coal scam. Anil Ambani’s Reliance Group’s lobbyists Tony Jesudasan and Sethu Raman were among the prominent visitors at ex-CBI Director Ranjit Sinha’s home[2].

Apart from Adani Group, Reliance Power and Essar Power are the major Corporates facing the DRI probe. During 2008 to 2010, the companies imported coal from Indonesia. But DRI found that the companies had over-invoiced their bills by routing their bills to shell firms in Hong Kong, British Virgin Islands and Dubai, leading to highly inflated bills. The shell firms’ bills were passed through PSU Banks including State Bank of India (SBI)’s foreign branches. The DRI’s probe found that SBI, Bank of Baroda, UCO Bank and private bank ICICI Bank’s foreign branches were used by the shell firms of these Corporates to inflate bills[3].

Except SBI, all banks have proved details to DRI about the money laundering by the scamster companies through their foreign branches. 70 percent of the transactions were passed through SBI’s foreign branches in the Coal Import Scam. Bhushan also pointed out that DRI’s adjudication wing has absolved the Adani Group companies from the coal import scam!

References:

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

[2] CBI chief Ranjit Sinha’s visitors: Both famous and infamous came calling – Sep 5, 2014, Times of India

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