Adani Suspected of Fraud by Selling Low-grade Coal as High-value Fuel: Financial Times
Moneylife Digital Team 24 May 2024
Adani group passed off low-quality coal as far more expensive cleaner fuel in transactions with an Indian state power utility, according to evidence seen by the Financial Times (FT) that throws fresh light on allegations of a long-running coal scam.
 
The documents, secured by the Organized Crime and Corruption Reporting Project (OCCRP) and reviewed by the FT, add a potential environmental dimension to accusations of corruption associated with the Indian conglomerate. They suggest that Adani may have fraudulently obtained bumper profits at the expense of air quality since using low-grade coal for power means burning more of the fuel, the report from FT says.
 
"Invoices show that in January 2014, Adani purchased an Indonesian shipment of coal said to contain 3,500 calories per kilogramme. The same shipment was sold to the Tamil Nadu Generation and Distribution Company (Tangedco) as 6,000-calorie coal, one of the most valuable grades. Adani appears to have more than doubled its money in the process, after transport costs," the report says.
 
FT says it has also matched documentation for a further 22 shipments in 2014 involving the same parties, which indicates a pattern of grade inflation in the supply of 1.5mn (million) tonnes of coal. "In all 22 shipments, Tangedco was the end buyer at an average price of $86 per tonne. The price is in line with Argus's estimates of local market prices for high-grade, 6,000-calorie coal, which were between US$81 and US$89, including freight costs."
 
According to the report, Adani sourced the coal in Indonesia from a mining group known for its low-calorie output at prices consistent with low-grade fuel. "It delivered the coal to India's southernmost state for power generation, fulfilling a contract that specified expensive high-quality fuel."
 
Adani, however, rejected accusations of inflating prices in transactions with state utility, the report says.
 
The latest revelations come as Adani seeks to rebrand itself into a big renewable energy player, including by building one of the world's largest wind and solar parks in Khavda, near the Pakistan border. The group that denies wrongdoing remains one of India's biggest importers of coal, FT says.
 
An October 2023 report from FT says Adani appears to have imported billions of dollars of coal at prices well above market value. The data supports longstanding allegations that Adani, the country's largest private coal importer, has been inflating fuel costs, leading millions of Indian consumers and businesses to overpay for electricity. 
 
"The records show that over the past two years, Adani used offshore intermediaries in Taiwan, Dubai and Singapore to import US$5bn (billion)-worth of coal at prices at times more than double the market price. One of these companies is owned by a Taiwanese businessman who was recently named by the FT as a substantial hidden shareholder in Adani companies," the report says. (Read: Over-pricing of Coal Imports Led to Higher Profits for Adani, Customers Overcharged for Fuel: FT Report)
Comments
david.rasquinha
4 weeks ago
And we continue to fill the Adani Group's pockets, while they continue looting coal buyers, power purchasers, and of course the country, while the ferocious enforcement agencies and the brave judiciary sit on their hands.
iaminprabhu
4 weeks ago
SHOCKING SMOKING GUNS !

If this us true, it needs DEEP INVESTIGATIONS under SC Monitoring as it's DAYLIGHT DACOITY against Citizens of India.
Meenal Mamdani
4 weeks ago
So, Modi's pet corporate is caught red-handed. The audacity of this man is sustained by the confidence that nothing will happen to him as long as he has protection from the highest political power.
nchheda74
Replied to Meenal Mamdani comment 4 weeks ago
Pls read the year January 2014 when the coal is alleged to have been sold to Tamil Nadu Power Co....PM Manmohan Singh. hehe
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