Adani companies facing multiple financial crime, corruption probes

26 December 2016

Companies under scrutiny for the alleged corrupt conduct include Adani Enterprises Limited — the ultimate parent company of the massive mine planned for the Galilee Basin.

Two separate investigations into allegations of trade-based money laundering by Adani companies are underway — one into the fraudulent invoicing of coal imports and the other into a scam involving false invoicing for capital equipment imports.

“They are very serious allegations and they are being conducted by the premier Indian government agency investigating financial crime,” Australia’s foremost expert on money laundering, Professor David Chaikin of the University of Sydney, told the ABC.

Five Adani Group companies are among a number of power companies named in the circular as under investigation.

These include Adani Enterprises Ltd, the ultimate parent company of the Adani entity, which holds the environmental approvals for the planned Carmichael Coal Mine and a railway to the mine.

Adani Enterprises Ltd has also been accused of involvement in large-scale illegal iron ore exports and bribery of public officials.

According to a 2011 report by the ombudsman of the Indian State of Karnataka, obtained by the ABC, police seized documents from Adani Enterprises in raids “which indicate that money has been regularly paid to port authorities, customs authorities, police department, mines and geology and even to MLAs/MPs”.

The revelations come as the Federal Government considers granting Adani a $1 billion subsidy to build a railway from the Abbot Point Coal Terminal to the mine site 400 kilometres inland.

A Supreme Court appointed special “black money” investigation team is examining an alleged fraud by Adani power companies in India.

The companies have also been accused of siphoning off money in a fraud that used inflated invoices for capital equipment imports to shift funds offshore via intermediaries created in a tax haven zone of the United Arab Emirates and in Mauritius.

Companies that own the port and planned railway for Adani’s Carmichael coal mine are linked to the alleged fraud via a director.

Directorate of Revenue Intelligence documents — cited in news company Indian Express — state that the Mauritius intermediary company, Electrogen Infra Holdings Pvt Ltd, is “controlled and managed by Vinod Shantilal Shah, alias Vinod Shantilal Adani”.

“Vinod Adani is believed to be the sole director of one of the companies who have allegations against them of fraudulent invoicing,” Ms Wilkinson said.

“He’s also the sole director of companies in Singapore, who are the ultimate owners of the Australian Adani entities, who own the port and the rail for the mine.”

Source – ABC