Congress Asks Questions on Shell Entities Allegedly Used in Adani Group Operations
Moneylife Digital Team 17 February 2023
In the eleventh instalment of questions under the series, 'Hum Adani Ke Hai Kaun' (HAHK), the Congress party has asked three questions to prime minister (PM) Narendra Modi related to shell companies located in offshore tax havens that allegedly appear to have played a central role Gautam Adani's business operations. 
 
Jairam Ramesh, member of Parliament and general secretary for communication of Congress, says, "We have all heard your calls 'to eliminate safe havens for economic offenders' and to 'break down the web of complex international regulations and excessive banking secrecy that hide the corrupt and their deeds'. Yet shell companies located in offshore tax havens appear to have played a central role in your friend Gautam Adani's business operations with no serious consequences. His brother Vinod Adani is alleged to have set up at least 38 shell entities in Mauritius, many of which have done huge business with the Adani Group despite no evident sources of income or even any activities."
 
Here are the three questions asked by Congress to the PM...
 
(1) The directorate of revenue intelligence (DRI), India's premier anti-smuggling agency, found in 2014 that three Adani group companies - Maharashtra eastern Grid Power Transmission, Adani Power Maharashtra, and Adani Power Rajasthan - had paid the Dubai-based Electrogen Infra FZE Rs9,048 crore for power equipment imported from China and South Korea worth Rs3,580 crore, with the balance syphoned out of the country. It turned out that Electrogen was controlled by Gautam Adani's brother Vinod via a Mauritius-based entity, Electrogen Infra Holding. Somehow, after you became PM, the adjudicating officer of the DRI dismissed the charges although he acknowledged that "I find that EIF and APRL to be related entities through Shri Vinod Shantilal Adani". The central bureau of investigation (CBI) that had taken over from DRI in 2014 appealed, but the case has gone nowhere. Are you protecting your close friends who are alleged to have syphoned off Rs5,468 crore in this case alone? Are you not concerned that consumers and taxpayers ultimately foot the bill when capital costs are over-inflated by shady promoters?
 
(2) The DRI also investigated the 2004-06 diamond scam in which Gautam Adani's younger brother Rajesh Adani and his brother-in-law Samir Vora were accused of circular trading of diamonds and over-invoicing so as to fraudulently claim export subsidies. These transactions were also allegedly carried out via offshore tax havens like Dubai and Singapore. In 2013, the commissioner of customs imposed fines on Rajesh Adani, Samir Vora, Adani Enterprises and five diamond trading companies linked to the Adani group. However, in 2015, after you became PM, the customs, excise and service tax appellate tribunal set aside the commissioner's order and dismissed the findings of the years-long investigation. This is part of a disturbing pattern in which detailed investigations into wrongdoing by the Adani group disappear after you take office as PM. 
 
(3) Shell companies, alleged to be controlled by Vinod Adani have also poured huge funds into Adani group companies. Records show that the UAE-based Emerging Market Investment DMCC loaned Rs7,919 crore to the Adani Power subsidiary Mahan Energen in 2021-22. The same year Adani Infrastructure received Rs5,145 crore from Mauritius-based Gardenia Trade and Investment. Both entities have been linked to Vinod Adani. Both were able to lend huge amounts of money to the Adani group despite having no discernible business operations. Is this not worthy of investigation by the army of investigative agencies at your disposal?
 
Read about the previous questions here… 
 
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