'False and baseless': Adani Group pans report on 'low-grade' coal supply, shares see little impact

Most Adani Group shares recovered at market close on Wednesday after a news report alleging the conglomerate had a decade back supplied low-grade coal as higher quality coal to a state government-owned power generation company.

Group flagship, Adani Enterprises, which hit a low of Rs 3,075 during trade today, closed 0.61 per cent higher at Rs 3,134.75.

Adani Ports ended at Rs 1,377.90, down 0.54 per cent, off its day's low of Rs 1,364.35. Adani Total Gas ended 0.47 per cent higher at Rs 934.55, while Adani Energy Solutions advanced 2.33 per cent; Adani Power rose 1.68 per cent while Adani Green Energy added 0.14 per cent.

Financial Times, citing a report of the Organized Crime and Corruption Reporting Project (OCCRP), claimed that in January 2014 Adani Group bought 'low-grade' coal from an Indonesian company at an alleged cost of $28 a tonne.

This shipment, the report alleged, was then sold to the Tamil Nadu Generation and Distribution company (TANGEDCO) as high-quality coal for an average price of $91.91 per metric tonne.

An Adani spokesperson denied the allegations, calling them “false and baseless.”

“The suggestion that Adani Global Pte Ltd supplied to TANGEDCO inferior coal, as compared to the quality standards laid down in the tender and PO [purchase order], is incorrect,” the spokesperson said.

“While it is difficult for us to comment on individual cases due to the sheer volume of data and the elapsed time, not to add the contractual and legal obligations, it is important to note that the coal supplied, irrespective of the declaration by the supplier, is tested for quality at the receiving plant,” the company added.

The Delhi High Court in January this year kept in abeyance its order asking the CBI and the Directorate of Revenue Intelligence (DRI) to “meticulously and expeditiously” look into allegations of over-invoicing of imports by the Adani Group.

A bench of Justices Suresh Kumar Kait and Neena Bansal Krishna, while noting in its January 5 order that a petition filed by the Commissioner of Customs (Import) in a matter involving Adani Power Maharashtra Limited is pending before the Supreme Court, said its December 19, 2023 directions to the CBI and DRI in respect of Adani Group firms be kept in abeyance until the outcome of the matter before the top court.

On December 19, 2023, the high court had directed the two probe agencies to look into the allegations of over-invoicing of imports by various power generating companies in India, including the Adani Group and the Essar Group, to ascertain the factual position and take appropriate action against the erring firm. Adani Power had filed an application before the high court placing on record a copy of the order passed by the Supreme Court by which an appeal filed by the Commissioner of Customs (Import) against Adani Power Maharashtra Limited was dismissed on March 27, 2023.

The high court's December order was passed while disposing of two petitions filed in 2017 by NGO Centre for Public Interest Litigation (CPIL) and former bureaucrat and social activist Harsh Mander.

The petitioners had referred to show cause notices issued by the DRI dated May 15, 2014 and March 31, 2016 that spoke of various entities of the two corporate giants indulging in gross over-valuation of imported goods (zero or low duty rated) to "siphon off money abroad from public listed companies".

(With PTI inputs)