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| Indian official reportedly dismisses fraud allegations against Adani Group | Indian official reportedly dismisses fraud allegations against Adani Group |
| (13 days later) | |
| An Indian customs official has reportedly dismissed allegations that the Adani Group illegally siphoned nearly 15bn rupees (£176m) into overseas tax havens. | An Indian customs official has reportedly dismissed allegations that the Adani Group illegally siphoned nearly 15bn rupees (£176m) into overseas tax havens. |
| It is the third set of siphoning allegations against the Adani Group and key figures in the Adani family to be dismissed by the official, KVS Singh, in recent months. | It is the third set of siphoning allegations against the Adani Group and key figures in the Adani family to be dismissed by the official, KVS Singh, in recent months. |
| The Indian mining conglomerate, which is preparing to build one of the world’s largest coal mines in Australia, had been accused of using a front company in Dubai to inflate the price of equipment it purchased for electricity projects between 2009 and 2013. | The Indian mining conglomerate, which is preparing to build one of the world’s largest coal mines in Australia, had been accused of using a front company in Dubai to inflate the price of equipment it purchased for electricity projects between 2009 and 2013. |
| India’s Directorate of Revenue Intelligence (DRI) had alleged the Dubai company was sourcing equipment from South Korea and China, which it would sell on to Adani Group subsidiaries for up to 13 times the price in some instances. | India’s Directorate of Revenue Intelligence (DRI) had alleged the Dubai company was sourcing equipment from South Korea and China, which it would sell on to Adani Group subsidiaries for up to 13 times the price in some instances. |
| According to DRI documents published by the Guardian in August, the Dubai company was owned and controlled by Vinod Adani, the elder brother of Gautam Adani, who chairs the Adani Group. The Adani Group had consistently denied any wrongdoing. | According to DRI documents published by the Guardian in August, the Dubai company was owned and controlled by Vinod Adani, the elder brother of Gautam Adani, who chairs the Adani Group. The Adani Group had consistently denied any wrongdoing. |
| On Saturday the Indian Express reported that Singh, the adjudicating authority for the DRI, had decided to dismiss the allegations. | On Saturday the Indian Express reported that Singh, the adjudicating authority for the DRI, had decided to dismiss the allegations. |
| He reportedly concluded that even though the Dubai company and the Adani Group were linked by the involvement of Vinod Adani, this had not affected the deal struck between the two. | He reportedly concluded that even though the Dubai company and the Adani Group were linked by the involvement of Vinod Adani, this had not affected the deal struck between the two. |
| “I have come to the conclusion that the said relation has not affected the price and that the same was at arm’s length and have accepted the transaction value,” Singh said. “Thus I find that the allegation that the impugned goods were over-valued does not hold water.” | “I have come to the conclusion that the said relation has not affected the price and that the same was at arm’s length and have accepted the transaction value,” Singh said. “Thus I find that the allegation that the impugned goods were over-valued does not hold water.” |
| Evidence collected by the DRI showed at least 57 cases of equipment being shipped directly to Adani Group subsidiaries in India while the invoices were routed through the Dubai company, which raised their price by an average of 400%. | Evidence collected by the DRI showed at least 57 cases of equipment being shipped directly to Adani Group subsidiaries in India while the invoices were routed through the Dubai company, which raised their price by an average of 400%. |
| In his order, Singh reportedly concluded that under the relevant legislation, the “comparison of value of goods covered by each and every individual consignment was impermissible and unjustified in law”. | In his order, Singh reportedly concluded that under the relevant legislation, the “comparison of value of goods covered by each and every individual consignment was impermissible and unjustified in law”. |
| He reportedly found that the contract struck between two Adani Group subsidiaries, Maharashtra Eastern Grid Power Transmission Company Limited and PMC Projects, to source the equipment, had been issued “on the basis of international competitive bidding wherein the said bid was found to be the lowest”. | He reportedly found that the contract struck between two Adani Group subsidiaries, Maharashtra Eastern Grid Power Transmission Company Limited and PMC Projects, to source the equipment, had been issued “on the basis of international competitive bidding wherein the said bid was found to be the lowest”. |
| The Guardian has sought access to the order but the Adani Group declined to release it. The DRI did not respond to requests to access the judgment. | The Guardian has sought access to the order but the Adani Group declined to release it. The DRI did not respond to requests to access the judgment. |
| The same customs official, Singh, dismissed two other sets of fraud allegations against Adani Group in August that allegedly employed the same modus operandi. | The same customs official, Singh, dismissed two other sets of fraud allegations against Adani Group in August that allegedly employed the same modus operandi. |
| As in the latest judgment, the August order concluded that though the Adani Group and the Dubai company were linked by the involvement of Vinod Adani, “the requirement of [the] relationship influencing the price was not satisfied”. | As in the latest judgment, the August order concluded that though the Adani Group and the Dubai company were linked by the involvement of Vinod Adani, “the requirement of [the] relationship influencing the price was not satisfied”. |
| Singh also argued that the increased price the Dubai company charged the Adani Group subsidiaries could be justified on the grounds the company had provided extended warranties on the equipment it purchased, and had signed stringent supply contracts. | Singh also argued that the increased price the Dubai company charged the Adani Group subsidiaries could be justified on the grounds the company had provided extended warranties on the equipment it purchased, and had signed stringent supply contracts. |
| “[The Dubai company] had undertaken the risk and financial burden to provide extended warranty over what the [suppliers] had added substantially to the said goods,” he said. “This additional risk spread over an extended period of time was bound to add a cost premium to the value of the imported goods.” | “[The Dubai company] had undertaken the risk and financial burden to provide extended warranty over what the [suppliers] had added substantially to the said goods,” he said. “This additional risk spread over an extended period of time was bound to add a cost premium to the value of the imported goods.” |
| The DRI is reportedly preparing to appeal against Singh’s August decision. | The DRI is reportedly preparing to appeal against Singh’s August decision. |
| Adani Group subsidiaries are among 40 companies facing separate allegations of using front organisations to increase the price of coal they mined from Indonesia. | Adani Group subsidiaries are among 40 companies facing separate allegations of using front organisations to increase the price of coal they mined from Indonesia. |
| The total value of the alleged scam has been estimated at 290bn rupees. The Adani Group and the other companies fully deny the allegations. | The total value of the alleged scam has been estimated at 290bn rupees. The Adani Group and the other companies fully deny the allegations. |
| A public-interest lawsuit has been lodged in the Delhi high court asking for a special investigation into the fraud claims against the Adani Group and those involving other energy companies. | A public-interest lawsuit has been lodged in the Delhi high court asking for a special investigation into the fraud claims against the Adani Group and those involving other energy companies. |
| The lawsuit, filed in September, alleges the Adani Group, the Indian company Essar, and several others inflated the price of power equipment and coal “in order to cheat the people and to siphon off funds from public companies”. | The lawsuit, filed in September, alleges the Adani Group, the Indian company Essar, and several others inflated the price of power equipment and coal “in order to cheat the people and to siphon off funds from public companies”. |
| Prashant Bhushan, the senior lawyer leading the case, said it would not be affected by Singh’s latest order. The case will be heard again in the Delhi high court in November. | Prashant Bhushan, the senior lawyer leading the case, said it would not be affected by Singh’s latest order. The case will be heard again in the Delhi high court in November. |
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