Business & Economy

Fixated With Adani: Indian Billionaire Rejects Western Claim of Selling Inferior Coal

© AP Photo / Ajit SolankiIndia's Adani Group Chairman Gautam Adani addresses the Vibrant Gujarat Global Summit, a business event to attract investments to the Gujarat state, in Gandhinagar, India, Wednesday, Jan.10, 2024.
India's Adani Group Chairman Gautam Adani addresses the Vibrant Gujarat Global Summit, a business event to attract investments to the Gujarat state, in Gandhinagar, India, Wednesday, Jan.10, 2024.  - Sputnik India, 1920, 23.05.2024
The Adani Group has questioned the Western media over its fixation with the Indian conglomerate in the wake of a series of news reports accusing the company of financial wrongdoings.
Ports-to-mining company Adani Enterprises has rejected Western media allegations that it sold low-quality imported coal at inflated costs to a state power utility in India.
The allegations were made by the Organised Crime and Corruption Reporting Project (OCCRP) and carried by British publication the Financial Times (FT) on Wednesday.
The FT report claimed that nearly 24 shipments of Indonesian coal imported to India between January and October 2014 were sold to Tamil Nadu's state-backed power utility TANGEDCO during that period.
It aslo claimed that the probe was based on documents from different jurisdictions, leaked documents from an Indonesia coal supplier, and investigation records by India's Director of Revenue Intelligence (DRI).

"Adani operates a robust corporate governance framework and is strongly committed to following all laws and regulations in all jurisdictions. Your allegations [OCCRP] are false and baseless, and we strongly reject any suggestion that the Adani portfolio of companies did not act as per regulations", a spokesperson said in a statement to Sputnik India on Thursday.

Indian Firm's Rebuttal to Western Media Claims

The representative clarified that the payments only varied from shipment-to-shipment based on differing qualities of coal supplied to TANGEDCO under an "independent, transparent and stringent process".
In a point-by-point rebuttal to the allegations by the OCCRP and FT, an Adani delegate told that the company had signed a "fixed price contract" with TANGEDCO, which obliged it to supply coal at a "pre-determined price".
The spokesperson said that each of its coal shipment supplied at the time underwent quality checks by the sender, receiver, the company's representatives, custom officials as well as independent referees.
Further, Adani rejected the charge that the coal it had supplied to TANGEDCO was of "inferior quality".

"The tests include, inter alia, Gross Calorific Value (GCV), moisture content and ash content. In fact, the tender document and the contract very elaborately define the testing procedures and parameters, which are transparent and independent, to avoid the very discrepancies as alleged by you. Moreover, the payment is dependent on the quality of coal supplied, which is determined through the testing process", the Adani comissioner claimed in their statement.

With the supplied coal having passed such an elaborate quality check process by several agencies at multiple points, clearly the allegation of supply of low-quality coal is not only baseless and unfair but completely absurd, the analyst further stressed.
Further, the Adani official clarified that the MV Kalliopi, a specific vessel referred to in the OCCRP investigation, was carrying coal with regards to a different contract under different terms.
"Not only are the two prices not comparable, but the procurement price itself is not relevant because the order of supply was a fixed price contract, with both the upside and downside to be borne by the supplier", the spokesman stated.

Clean Chit to Adani by Indian Authorities

The Adani representative noted that India's financial fraud probe agency, the Directorate of Revenue Intelligence, had previously launched an investigation into 40 Indian companies, which include Adani Power, Reliance Infrastructure, JSW Steel, Essar Group, as well as several state power gencos, over charges of inflating prices of Indonesian coal imports.
"Your single-minded fixation with the Adani Group is intriguing and can best be explained by you", the statement read.
Further, the spokesperson added that the DRI had itself not conveyed any "objection" to the company's response in court, which was necessitated after a probe was launched by the Indian agency.

"In January 2023, the DRI withdrew its appeal and the Supreme Court said, 'We appreciate the stand taken by the government in not entering into futile litigation'. Clearly, the issue of overvaluation in coal import was conclusively settled by India’s highest court of law", the Adani member underscored.

The Indian conglomerate rejected charges that the coal supplied by it was responsible for exacerbating the air pollution situation, as it noted that Adani had supplied only two percent of the overall coal used by TANGEDCO during the period.
"I am sure a respected and responsible newspaper like the FT will not push such a hollow insinuation", the Adani spokesperson highlighted.
He then noted that charges of inflating its share prices levelled by New York-based shortseller Hindenburg Research last year was declared "unsubstantiated" by India's Supreme Court in January this year.
The allegations by Hindenburg led to the biggest stock market crash in Indian corporate history.
Adani Group Chairman Gautam Adani described Hindenburg's allegations as an "attack on India".
Gautam Adani speaks during the inauguration of Vibrant Gujarat Global Investor summit in Gandhinagar, India - Sputnik India, 1920, 31.08.2023
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