DRI said that if the HC judgment is not stayed, grave prejudice would be caused to the pending investigation as AEL and APL would influence and tamper with crucial evidence available in other countries and will also set a bad precedent for all cases where issuance of LR is sought.
In a major setback to the Adani group, the Supreme Court on Wednesday revived Directorate of Revenue Intelligence (DRI) investigations into the alleged overvaluing of Indonesian coal imports and cornering of tax benefits and higher compensatory tariffs by two group companies between 2010 and 2016. The apex court stayed the Bombay High Court decision that quashed all letters rogatory (LRs) sent to 14 countries, including Singapore and UAE, against the two companies accused of over-invoicing of imported coal.
The HC’s October 17, 2019 order had brought to a halt an overseas investigation initiated since 2016 by DRI. An SC Bench led by Chief Justice SA Bobde has sought response from Adani Enterprises Ltd (AEL), the flagship company of the Adani group, and Adani Power Ltd (APL). Solicitor General (SG) Tushar Mehta, appearing for DRI, argued that the investigation into the matter should continue.
The DRI is probing at least 40 companies for alleged over-valuation of coal imports from Indonesia, to the tune of Rs 29,000 crore. DRI said that if the HC judgment is not stayed, grave prejudice would be caused to the pending investigation as AEL and APL would influence and tamper with crucial evidence available in other countries and will also set a bad precedent for all cases where issuance of LR is sought. Besides, the HC order will have a cascading effect on investigations carried out by other agencies like Enforcement Directorate, SFIO, CBDT, etc, it added.
“The HC judgment would also render the proceedings carried out by the courts in Singapore nugatory, which will cause a huge diplomatic embarrassment for the country, wherein the LR issued by a competent court in India is being sought to be set aside by the higher court in the country, despite the fact that the same has been accepted and enforced in Singapore,” the appeal stated. However, senior counsel Vikram Nankani, appearing for one of the Adani companies, opposed vacation of stay.
The DRI told the SC that the preliminary scrutiny of the import data/documents during October 2010 to March 2016 revealed that the Adani group of companies had imported about 1,300 consignments of Indonesian coal. A majority of imports of the Indonesian coal were routed through group subsidiary companies — Adani Global Pte Lte, Singapore, and Adani Global FZE, Dubai. It was found, said DRI, that Adani, acting in connivance with its persons/companies in Singapore/UAE/Hong Kong/British Virgin Islands, overvalued the import of coal as compared to the actual ex-Indonesia export value of coal and prevalent international prices with the objective of siphoning off the money abroad and to avail higher power tariff compensation.’