Over-valuing of equipment by a subsidary of Adani group may have resulted in Rs 1,500 crore being siphoned off to a tax haven in Mauritius, claims a report of Directorate of Revenue Intelligence (DRI), made public by The Guardian.
An investigation report, published by the international news organisation on Wednesday, also revealed the money trail which followed the over-valuation of the power equipment.
The Economic and Political Weekly, had in 2014, pointed out that the Adani Group of Companies was among the 40 importers of coal under investigation by the DRI.
A case was opened by the Mumbai branch of the DRI in 2014 against the Adani Group for over-valuing equipment order. The size of the scam, in 2014, was approximated to be about Rs 2000 crore.
The Money Trail
The Adani Group of companies placed an order for power equipment from a company in Dubai, which is supposedly a front-end company of the Adani Group, said The Guardian, quoting the DRI report.
The Dubai company, in turn, allegedly placed an order with a South Korea company but the order was delivered directly to the Mumbai office of the Adani Group.
A money trail reportedly shows that the Adanis paid eight times more for the material and that the final payment was traced to an off-shore company in Mauritius.
This off-shore company, to which the payment was made, is allegedly owned by Vinod Adani, the elder brother of Gautam Adani.
The Indian investigators “calculated the total assessable value of the allegedly marked-up invoices to be nearly 15 billion (1,500 crore) rupees,” reported Guardian.
Adani Group Denies Allegations
The Adani Group spokesperson "strongly denied" the allegations of over-valuation.
Adani Group is aware of the investigations being conducted by the DRI, and has fully cooperated, and shall continue to cooperate with the investigating agencies.Adani Group Spokesperson speaking to The Guardian
While the Adani statement confirmed that Vinod Adani was the brother of Gautam Adani, they added that as a non-resident of India, Vinod had business interests outside the country.
The case is currently under Enforcement Directorate investigation.
(With inputs from The Guardian, EPW, and Economic Times)
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