The Directorate of Revenue Intelligence (DRI) has asked the Central Bureau of Investigation (CBI) to probe two Reliance ADAG firms — Reliance Infrastructure Ltd and Rosa Power Supply Co Ltd — in connection with the alleged overvaluation of imported Indonesian coal between 2010 and 2015, sources told The Indian Express.
Sources said the DRI, in a letter dated December 21, 2018, requested the CBI to take “appropriate action under law” against Reliance Infrastructure and Rosa Power for allegedly siphoning about Rs 386 crore through overvaluation of at least 73 consignments of imported Indonesian coal.
While the CBI is yet to register a preliminary enquiry in the case, sources said it could look into violations of the Indian Penal Code (IPC) as the DRI has alleged that artificial inflation of imported coal increases the landed cost of coal, which is a primary fuel in coal-fired thermal power plants, and therefore leads to an increase in power tariffs for the public.
The Reliance ADAG spokesperson did not respond to email, phone calls and text messages sent by The Indian Express. The CBI and DRI also did not respond to phone calls and emails.
The CBI has already initiated investigation into two other companies — Coastal Energy Pvt Ltd and Knowledge Infrastructure Systems Pvt Ltd — for alleged overvaluation of Indonesian coal imports after it was referred for probe by the DRI.
The DRI is probing at least 40 companies, including two companies of the Adani Group, two Essar Group firms and a few public sector power firms, for alleged overvaluation of coal imports from Indonesia pegged at Rs 29,000 crore.
The DRI communication to CBI in the case of ADAG firms has outlined the modus operandi of over-invoicing of coal imports from Indonesia. The DRI has alleged that money was being “siphoned” outside the country and the electricity-generating firms were availing of “higher tariff compensation based on artificially inflated cost of the imported coal”.
According to a showcause notice issued by DRI to Reliance Infrastructure and Rosa Power in August 2016, the two firms not only violated the Customs norms but also violated other laws like the Electricity Act, 2003, Income Tax Act, 1961, Foreign Exchange Management Act, 1999, Prevention of Money Laundering Act, 2002, Companies Act, 2013, and Securities and Exchange Board of India Act, 1992.
The DRI has alleged that most of the imported coal was supplied to Reliance Infrastructure’s Dahanu power generation plant in Maharashtra and Rosa Power plant in Uttar Pradesh.
The Dahanu plant supplies electricity to suburban Mumbai. Last year, Adani Transmission Ltd acquired Reliance Infrastructure’s integrated business of generation, transmission and retail electricity distribution in Mumbai and Maharashtra for Rs 18,800 crore.
The DRI probe has found that Indonesian coal was directly imported from ports in that country to India while import invoices were routed through one or more intermediaries based in Singapore, Hong Kong, Dubai and British Virgin Islands to artificially inflate its value. The agency, according to sources, found that inflated invoices received in India were issued by intermediaries, allegedly subsidiary companies of Indian importers or their fronts.