Fraud: Adani Group Selling Low-Grade Coal as High-Value Fuel

According to evidence reported in the Financial Times (FT), the Adani Group passed off low-quality coal as far more expensive cleaner fuel in transactions with an Indian state power utility. This report shines new 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. In January 2014, the Adani Group bought low-grade coal from an Indonesian company at an alleged cost of $28 per metric tonne (MT). The same shipment was then sold to the Chennai-based Tamil Nadu Generation and Distribution Corporation (Tangedco) as high-quality coal for an average price of $91.91 per MT. Due to this, not only did the Adani Group make a huge profit, but it also harmed the environment due to the burning of low-grade coal by the power-generating company (SDW Vol. 1 Issue 5, Story 6).The Adani Group denied all allegations and said the coal was thoroughly tested. An international consortium of 21 groups has written to the Chief Justice of India and requested the Supreme Court to speedily resolve the pending case filed by the Directorate of Revenue Intelligence, investigating Adani Group firms for alleged overvaluation of Indonesian coal imports. Meanwhile in Panjab, with rising mercury, power demand has gone up to 16,500MW from 15,325MW last year.