The Directorate of Revenue Intelligence (DRI) of India escalated its inquiry into the Adani Group, led by billionaire Gautam Adani. This surge in investigative efforts centers on allegations of overvalued coal imports. The DRI is now petitioning the Supreme Court for authorization to gather evidence from Singapore, suggesting that Adani Group has hindered this process for an extended period.
Investigation’s Genesis:
Since 2016, the DRI has endeavored to secure transaction documents linked to Adani’s Singapore operations. Suspicions point to Adani Group inflating prices for coal shipments from Indonesian suppliers through its Singapore entity, Adani Global Pte, before transferring them to its Indian counterparts.
Legal Barricades:
Adani Enterprises and its affiliates have repelled these allegations with a series of legal maneuvers in both India and Singapore, effectively stalling the release of key documents. Despite this, Adani consistently rejects any allegations of misconduct, affirming that Indian authorities vetted its coal shipments.
Recent Escalation:
The DRI’s recent legal motion on October 9, as disclosed by Reuters, appeals to the Indian Supreme Court to annul a lower court’s verdict favoring Adani, which blocked evidence gathering from Singapore. The DRI claims compliance with all procedural norms, having secured necessary international approvals.
Adani Group’s Position:
According to Reuters, Adani Group declares unwavering cooperation with the inquiry, highlighting its provision of all requested information and documents over four years prior, with no subsequent investigator objections.
Broader Context:
This probe gains additional weight against the backdrop of Adani Group facing heightened regulatory scrutiny after Hindenburg Research accused it of tax haven abuse and stock manipulation, resulting in a steep decline in its stock value. This scrutiny comes at a politically charged time ahead of India’s 2024 elections.
Investigation’s Scope:
The DRI’s probe into Adani’s imports is part of a larger investigation into over-invoicing in Indonesian coal imports by over 40 companies, initiated in 2014. Specific to Adani, the inquiry scrutinizes 1,300 shipments, citing grossly inflated import values.
Singapore’s Role:
The success of India’s appeal to Singapore’s authorities is critical in establishing a financial trail. The next steps hinge on Singapore’s Court of Appeal’s decision, following India’s Supreme Court’s ruling.
The evolving legal battle, spanning Mumbai, New Delhi, and Singapore, underscores the challenges in global financial investigations. This case promises to illuminate not only Adani Group’s business methods but also the effectiveness of international legal collaboration in addressing corporate financial discrepancies.
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