The Guardian has published pages from a customs intelligence notice alleging the company has shifted huge sums of money into offshore bank accounts

This article is more than 3 years old

This article is more than 3 years old

India’s main opposition party has called for a fresh, supreme court-monitored probe into allegations mining giant the Adani Group fraudulently siphoned nearly $235m into overseas tax havens.



This week the Guardian published Indian customs intelligence documents alleging Adani Group inflated invoices on an electricity project in India to shift huge sums of money into offshore bank accounts.

Adani mining giant faces financial fraud claims as it bids for Australian coal loan Read more

The Indian conglomerate is hoping to secure a $700m (A$900m) Australian government loan to develop one the world’s largest coal mines in Queensland.

The documents, compiled in 2014 by India’s directorate of revenue intelligence (DRI), accuse Adani Group of ordering hundreds of millions of dollars’ worth of equipment for an electricity project in Maharashtra state using a front company in Dubai.

Read the pdf here.

The Dubai company allegedly sold the exact same equipment back to Adani Group-controlled businesses in India at massively inflated prices, in some instances said to be eight times the sale price.

According to the allegations in the file, the effect of these transactions was that Adani Group spent an average 400% more for the materials. That money was allegedly paid to a company Indian authorities allege was owned through a series of shell companies leading to a Mauritius trust controlled by Vinod Adani.

If true, one effect of the alleged scheme would have been to move vast sums of money from Adani Group’s domestic accounts into offshore bank accounts where it could no longer be taxed or accounted for.

Because tariffs for using electricity transmission networks are determined partly by what they cost to build, if the DRI’s accusations are correct, the overvaluation of capital goods would have been likely to have led to higher power prices for Indian consumers.

Adani Group and Vinod Adani fully deny the accusations, which they say are awaiting adjudication before an Indian financial crime authority.



India’s opposition Congress party on Friday called for an immediate probe into the allegations by the central bureau of investigation, a federal crime-fighting agency, monitored by a judge from the country’s supreme court.

It said if the DRI’s allegations were correct, the over-invoicing would have lead to “grossly inflated prices for the public”.

A petition based on reporting by the Guardian and others would be filed with the national power regulator, asking it to investigate every other private electricity company for alleged over-pricing of equipment, the statement added.

Congress said it had initiated the investigation into alleged over-invoicing during its last term in government in 2013. It said the Adani Group case had been “languishing in protracted legal proceedings since the Bharatiya Janata party came to power in the centre and the state”.

It accused Narendra Modi’s government of deciding to “go slow” on the investigation. “At worst, [it has] 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,” the statement said.

In a separate case last year, six Adani subsidiaries were listed among 40 other companies being investigated for allegedly running a similar price-inflation scheme. The companies are accused of inflating the price of coal imports from Indonesia to hide profits in overseas tax havens.

The DRI and other agencies declined to comment on either investigation.

The proposed Queensland mine, which would be Australia’s largest, has been the source of years of controversy, lawsuits and protests over its possible environmental impact.



Expanding the coal port to accommodate the mine will require dredging an estimated 1.1m cubic metres of spoil near the Great Barrier Reef marine park. Coal from the mine will also produce annual emissions equivalent to those of Malaysia or Austria according to one study.

Adani Group has said in a statement to the Guardian on behalf of itself, its subsidiaries and Vinod Adani that it “strongly denies the allegations of overvaluation”.



“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. All our transactions are always conducted within the framework of extant regulatory guidelines and provisions,” it has said.



“The fact that our projects have incurred the lowest cost across central, state and private utility players has gone to establish the robustness of the processes followed by our group.

“It may be noted that Mr Vinod Adani who is the elder brother of Mr Gautam Adani has been a non-resident Indian for about 30 years and has his own established business interests outside India.

“Adani Group is aware of the investigations being conducted by the DRI, and has fully cooperated, and shall continue to cooperate with the investigating agencies.”